APEC Business Leaders Call For Free Trade Deal

by Mary Swire, Tax-News.com, Hong Kong

03 May 2011

The APEC Business Advisory Council (ABAC), formed of business leaders from the 21 economies of the Asia-Pacific Economic Cooperation (APEC) have recommended, during a recent meeting in Seoul, that concrete steps should be taken to realise a Free Trade Area of the Asia-Pacific (FTAAP).

Their recommendations, on the priorities for APEC’s trade and investment agenda, will be formally submitted to APEC trade ministers and small and medium-sized enterprise (SME) ministers ahead of their meetings to be held from May 19-21 in Montana.

ABAC, in urging APEC’s trade ministers towards greater regional economic integration, recommended that a key objective of steps towards FTAAP should be to enhance the operation of integrated supply and value chains which reflect the way business is now increasingly being done in the region. As an incubator for ideas, it said, APEC has a key role to play in identifying blockages and overcoming trade barriers and impediments which would enhance competitiveness.

ABAC also identified and will provide recommendations to APEC ministers on addressing what it sees as the top four barriers to cross-border trade for SMEs - access to finance; lack of capacity to internationalize; the need for transparency and open business environments; and an inability to protect intellectual property rights.

"Taking APEC as a whole, SMEs make up roughly 90% of all businesses and employ nearly 60% of the work force, but they only account for around 30% of exports. It is critical that APEC SME Ministers take strong action to help these companies to increase their reach across borders," said Deb Henretta, ABAC Chair and Group President, Asia, Procter & Gamble.

In addition, ABAC will call on the ministers to address the slow recovery of foreign direct investment (FDI) in the region, noting that particular attention should be focused on actions aimed at accelerating the growth of FDI. Such actions include improving the predictability, transparency and efficiency of the legal and regulatory environment for investment and providing effective mechanisms for expedited approval processes and the resolution of disputes.

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