As the weight of East Asia and the Pacific in world affairs continues to increase, the commitment to the old verities of liberal trade in this region could be crucial in holding back the new tides in the old, North Atlantic industrial countries.

Continued growth in East Asia is likely to be the primary influence on world trade and economic growth in the next quarter century and beyond, just as it has been in the last. The emergence of East Asia has had a dramatic effect on the structure of world output, and even more so on the structure of world trade. Charts 1 and 2 illustrate these huge shifts in the structure of world production, trade and global economic power.

East Asia accounted for just over 17 per cent of world production in 1980; at the end of the century it can be expected to be over 28 per cent. Already the region accounts for a fifth of world trade, a larger share than North America, and by the year 2000, East Asia's share is expected to be closer to one-third of world trade. These ratios will not stop changing at the millennium. One consequence is that, in the future, the rest of the world will find itself reacting to the forces of economic policy-making in East Asia, as it has done to those of the United States for the past half century.

In East Asia in recent years, structural change and growth have been mutually reinforcing; providing new markets, and an increasingly sophisticated and dynamic regional economy.

There has been extensive unilateral market opening and deregulation in most Western Pacific economies. Their remarkable growth performance has confirmed the prediction of economic theory that the greatest benefit from unilateral trade liberalization accrues to those who undertake it. The benefits have been multiplied by the fact that many neighbouring economies have taken similar unilateral market-opening decisions.