APEC urged to accelerate process toward a regional FTA

0
1001

Thai factoryAsia-Pacific business leaders are calling on regional governments to take “concrete steps” to make the region a free trade area, noting that 10 years have elapsed since the possibility of open regional trade was first proposed.

The Asia-Pacific Economic Cooperation’s Business Advisory Council batted for the fast-tracking of the Free Trade Area of the Asia-Pacific (FTAAP) as the ABAC members met in the run-up to the APEC Ministerial Meeting in Qingdao, China, next week.

“Over the last 10 years APEC has taken incremental steps to realize an FTAAP notably with the endorsement of possible pathways to an FTAAP which includes the Trans-Pacific Partnership (TPP), the Regional Comprehensive Partnership (RCEP) and the Pacific Alliance. ABAC efforts have thus been largely directed at ensuring that there is eventual convergence of these pathways into an FTAAP,” ABAC said in an official statement.

Tony Nowell, chair of ABAC Regional Integration Working Group, said regional economic integration can be realized if the Bogor Goals are achieved by 2020. “To achieve the Bogor Goals we need FTAAP and to achieve FTAAP we need one or more of the negotiating pathways to be successfully completed.”

ABAC sees the TPP as close to completion but needing further political direction, while the RCEP needs to adopt a quicker pace to increase alignment with other pathways to FTAAP.

“Given these developments and the approaching 2020 deadline for achieving the Bogor Goals, ABAC now sees the need for APEC to provide more ‘top-down’ direction in the FTAAP process,” said Ning Gaoning, ABAC chair 2014.

He said this consists of fleshing out the overall vision, conducting economic analysis of possible gains, and holding a dialogue with stakeholders on increasing transparency and identifying business needs.

Ning sought for more concrete steps by APEC such as developing a feasibility study, road map, and timeline toward the realization of an FTAAP.

The executive said greater efficiency and productivity for today’s global value and supply chain can only be fulfilled if the friction that impedes the movement of goods and services across border is reduced or eliminated. “The FTAAP is the most effective and comprehensive mechanism for addressing the causes of this friction.”

The business leaders will also ask the APEC trade ministers to support a proposal to establish a high-level group of investment experts that will provide advice on ways to increase regional investments.

Earlier, the APEC came out with a regional economic trends analysis and stated that even though APEC economies are forecast to grow in 2014, there is a cause for some concern.

“Medium-term GDP forecasts for APEC economies have actually been revised down from 5 percent to between 4 and 4.5 percent over the next five years,” explained John Denton, who chairs ABAC’s Finance and Economics Working Group. “The consequence of that downward revision in growth would actually translate into a USD4 trillion deficit in economic outlook for APEC economies over the medium-term.

“It’s an alarming figure in its own right and one that reinforces the need for policy reforms to promote greater regional integration and connectivity to improve economic growth and development,” Denton added.

Photo: ILO in Asia and the Pacific