Friday, March 1, 2013

Overview of APEC Regional Economic Integration

Chen Ho


          APEC's work toward the advancement of regional economic integration (REI) can be said to truly begin in 1994 with the development of the Bogor Goals. The reason is that the Bogor Goals provide APEC members with the rationale for exerting greater efforts through meetings, initiatives, individual actions and collective actions. Since the final deadline for the achievement of the Bogor Goals has been set for 2020, APEC has had many years to consider the relationship between the Bogor Goals and the strengthening of APEC REI.

          At the same time, the changing international economic environment has affected APEC process, so that APEC members have also begun to examine other ways of enhancing APEC REI. The other important output of the search for alternative means of APEC REI is the realization of a Free Trade Area of the Asia-Pacific (FTAAP). There is the possibility that additional ways for building APEC REI will be promoted for the purpose of maximizing benefits to APEC members. Therefore, the main purpose of this article is to analyze the existing means for taking forward the APEC REI agenda. It must be stressed that the APEC process proceeds in a cautious manner.

Bogor Goals and APEC REI

          After the creation of APEC, the next significant step for building APEC REI is the announcement of the existence of the Bogor Goals in 1994. The Bogor Goals provide the focus for APEC's work and eventually lead to the realization of the idea that APEC should promote REI. In the "1994 APEC Leaders' Declaration," Leaders have stated that they set a vision for the creation of an Asia-Pacific community that is based on the growing interdependence among APEC members consisting of developed and developing economies. Leaders believe that the narrowing of the gap in the stages of development among APEC members will be beneficial and will promote economic progress in the APEC region. In addition, Leaders recognize that APEC has to advance cooperation on the basis of equal partnership, shared responsibility, mutual respect, common interest, and common benefit. Most importantly, Leaders announce the Bogor Goals which are about the achievement of free and open trade and investment by developed economies in 2010 and developing economies in 2020. Furthermore, Leaders state that they seek to show APEC's leadership in advancing global trade and investment liberalization (APEC 1994).

          The 1994 Declaration has not directly brought up integration and the concept of APEC REI. However, the ideas that are stated in the Declaration promote the development of APEC REI. Leaders have provided a clearer view of their thoughts. For example, the mentioning of the development of an Asia-Pacific community among APEC members is supportive of APEC REI. An Asia-Pacific community can be a strong indicator of APEC REI. This means that APEC members have strengthened their integration, in order to build an Asia-Pacific community.

Advancing APEC REI

          APEC's support for REI becomes quite clear when the "2007 APEC Leaders' Declaration" includes "Regional Economic Integration" as one of the headings. In that section of the Declaration, Leaders state that APEC's commitment to open markets and economic cooperation has produced extensive regional integration. Leaders agree to strengthen efforts toward greater economic integration by: 1) Lowering barriers to trade and investment; 2) Enhancing economic efficiency and the regional business environment; and 3) Supporting integration in sectors, such as transportation, telecommunications, mining and energy (APEC 2007).

          In the "2009 APEC Leaders' Declaration", Leaders reaffirm their commitment to achieve the Bogor Goals. In addition, Leaders state that they will continue to find ways to realize an FTAAP in the future. As for specific actions, Leaders direct officials to promote greater convergences among APEC members in areas, such as services, digital economy, investment, trade facilitation, rules of origin and standards. Leaders also call for the utilization of public-private partnership (PPP) to enhance transport infrastructure, so as to strengthen supply chain connectivity in the Asia-Pacific region (APEC 2009).

          It is also important to examine the "2010 APEC Leaders' Declaration", because it provides a detailed description of Leaders' vision regarding an APEC community. Leaders call for the development of an economicallyintegrated community. This means the creation of a community that supports stronger and deeper REI. It is the Leaders' belief that the promotion of REI will build a solid foundation for prosperity in the Asia-Pacific region. The enhancement of REI will be advanced through APEC's work in trade and investment liberalization and facilitation. Additionally, Leaders mention that barriers facing the movement of goods, services, and capital must be lowered and businessmen should be able to travel more smoothly. Leaders also state that APEC should ensure that businesses are able to trade and operate in the Asia-Pacific region cheaply and easily. There is the need for APEC to simplify and harmonize customs procedures. Regulatory cooperation should also be strengthened. Furthermore, the multilateral trading system should be enhanced (APEC 2010).

          In addition to the "2010 APEC Leaders' Declaration", Leaders also announce the document called "Pathways to FTAAP". Leaders instruct APEC to implement concrete actions that will lead to the creation of an FTAAP. Leaders believe that an FTAAP will greatly advance APEC's REI agenda. Furthermore, APEC Leaders mention that the following points should be taken into account in developing pathways to FTAAP: 1) The changing global economic and trade architecture with the rise in the number of FTAs; 2) The progress in reaching the Bogor Goals by 2020; 3) The non-binding nature and voluntarism of APEC; 4) The importance of trade and investment issues, non-tariff barriers, and next generation trade and investment issues; and 5) APEC's support for the multilateral trading system (APEC 2010a).

Present Status of APEC REI

          The "2011 APEC Leaders' Declaration" is also an important document for understanding APEC REI because the United States served as the 2011 APEC host. The United States have consistently supported REI through trade liberalization. According to the Declaration, the core mission of APEC is to integrate APEC economies and expand trade. APEC recognizes that trade and investment are needed to create jobs and advance economic prosperity. In addition, the strengthening of REI will promote peace and stability in the Asia-Pacific region. Furthermore, Leaders state in the Declaration that APEC has addressed next generation trade and investment issues. Specifically, APEC will promote effective, non-discriminatory, and market-driven innovation policy. APEC will also seek to enhance the participation of small and medium-sized enterprises (SMEs) in global production chains (APEC 2011).

          The work to advance REI in APEC continues to proceed in a comprehensive manner as well as specifically. Leaders have stated in the "2012 APEC Leaders' Declaration" that they are cognizant of the significance of the Bogor Goals. Additionally, Leaders reaffirm their commitment to the realization of an FTAAP, since it is an important way to enhance APEC's REI agenda. In particular, Leaders will continue to address next generation trade and investment issues, since they are beneficial to strengthen integration of APEC economies and expand trade in the APEC region. Therefore, APEC has selected transparency as the 2012 next generation trade and investment issue. Leaders say that transparency is important to trade liberalization, businesses, and elimination of trade barriers. Leaders believe that the promotion of transparency will benefit the advancement of APEC REI. Moreover, Leaders recognize the significance of information and communication technologies (ICT) to enhance integration in the APEC region. Leaders further state that it is necessary to ensure cross border flows of information are secured (APEC 2012).

          In 2013, Indonesia is serving as the APEC host. Indonesia has announced that the priorities for 2013 are: 1) Attaining the Bogor Goals; 2) Sustainable growth with equity; and 3) Promoting connectivity (APEC ISOM 2012). It can be seen that Indonesia is also emphasizing the importance of advancing APEC REI. Particularly, the need to ensure the achievement of the Bogor Goals is being focused upon. At the same time, the importance of promoting connectivity is stressed. The deepening of connectivity among APEC economies will enhance integration. Therefore, the work to promote APEC REI in 2013 and in the immediate future will continue to focus on comprehensive REI goals, such as the Bogor Goals and FTAAP. In addition, APEC will also seek to enhance integration in specific sectors.


1. APEC. 1989. "Chairman's Summary Statement-1989 APEC Ministerial Meeting."
Singapore: APEC Secretariat.
2. APEC. 1994. "1994 APEC Leaders' Declaration." Singapore: APEC Secretariat.
3. APEC. 2006. "2006 APEC Leaders' Declaration." Singapore: APEC Secretariat.
4. APEC. 2007. "2007 APEC Leaders' Declaration." Singapore: APEC Secretariat.
5. APEC. 2009. "2009 APEC Leaders' Declaration." Singapore: APEC Secretariat.
6. APEC. 2010. "2010 APEC Leaders' Declaration." Singapore: APEC Secretariat.
7. APEC. 2010a. "Pathways to FTAAP." Singapore: APEC Secretariat.
8. APEC. 2011. "2011 APEC Leaders' Declaration." Singapore: APEC Secretariat.
9. APEC. 2012. "2012 APEC Leaders' Declaration." Singapore: APEC Secretariat.
10. APEC ISOM. 2012. "Translating Common Priorities into Workable Cooperation
for 21 Economies of the Asia-Pacific." Singapore: APEC Secretariat.

(Dr. Chen Ho is the Associate Research Fellow of TIER)

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