APEC To Explore Asia-PAC Free Trade Area

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

02 June 2010

As trade ministers from the Asia-Pacific Economic Cooperation (APEC) prepare for their annual meeting on June 5 and 6, its Business Advisory Council (ABAC) has delivered a set of recommendations, with the intent that they be presented to the leaders of its member states.

APEC is an inter-governmental grouping of 21 member states for co-operation, trade and investment in the Asia-Pacific region. Unlike multilateral trade bodies, APEC has no treaty obligations required of its participants. Decisions made within APEC are reached by consensus and commitments are undertaken on a voluntary basis.

ABAC recommends that APEC’s leaders should re-commit to achieving free and open trade within the APEC region. Taking account of the fundamental changes in APEC's economic and social structures, ABAC recommends that a new vision is needed, building on the 1994 Bogor Goals to reflect the changing nature of modern Asia-Pacific regional supply chains and value chains. This vision, ABAC suggests, should seek to liberalize flows of goods, services, investment, technology, e-commerce and people.

ABAC also recommends that APEC agrees that a Free Trade Area of the Asia-Pacific (FTAAP) is “an aspirational but achievable vehicle for delivering free and open trade and investment within the region.” ABAC is seeking greater detail from the trade ministers on the modalities and processes towards an FTAAP to enable active involvement by the business community.

ABAC’s third recommendation is that APEC’s leaders should recognize the importance of existing and progressing regional trade arrangements such as the Trans-Pacific Partnership, the Comprehensive Economic Partnership in East Asia and the various forms of the Association of Southeast Asian Nations - ASEAN+1, ASEAN+3 and ASEAN+6 - as potential pathways to delivering an FTAAP.

As these existing arrangements evolve, ABAC says that they could draw on previously-developed APEC model FTA chapters covering goods, services and investment and other new business requirements to guide their progress.

ABAC further requests that the leaders of economies engaged in evolving regional arrangements direct their officials to share knowledge and substance about their respective negotiations in a timely and transparent fashion, while respecting the negotiating sensitivity of some issues.

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