After a year of concerted efforts by APEC to develop a meaningful plan for advancing the Free Trade Area of the Asia-Pacific (FTAAP), the APEC Economic Leaders have finally generated a clear map for realizing the FTAAP in the 2014 APEC Economic Leaders' Meeting (AELM) in Beijing, People's Republic of China. The purpose of this article is to analyze the main points of the document that is attached to the 2014 APEC Leaders' Declaration called ''The Beijing Roadmap for APEC's Contribution to the Realization of the FTAAP.''
Analyzing the Roadmap
The document begins with the summarization of APEC's views regarding the FTAAP over the years. It states that APEC agreed to examine the FTAAP idea as a long-term prospect in 2006. In 2010, APEC Leaders had generated the notion of ''Pathways to FTAAP.'' The idea is that an FTAAP should be realized as a comprehensive free trade agreement that will be developed and built through regional undertakings, such as ASEAN+3, ASEAN+6 and the Trans-Pacific Partnership (TPP). Thus APEC will make important contribution as an incubator of the FTAAP (APEC 2014).
Even though it is not stated in the document, it is important to note that the APEC Business Advisory Council (ABAC) had initiated the FTAAP idea back in 2004. The views of ABAC are significant because it is the businesses in the APEC region that have played a significant role in advancing economic development and regional economic integration (REI) through the building of global value chains (GVCs). Therefore, businesses are the main supporters of trade and investment liberalization and facilitation. The creation of the FTAAP will certainly provide a business-friendly environment in the Asia- Pacific region, so that GVCs can be strengthened.
According to the ''2014 ABAC Report to APEC Economic Leaders,'' ABAC is appreciative of APEC's effort in being an incubator of the FTAAP and for providing leadership and intellectual input in developing the FTAAP. Furthermore, ABAC believes that Leaders should impart ''top down'' direction. In addition, APEC should identify the needs of business. ABAC also suggests that APEC develops a roadmap and undertakes analytical work on realizing the FTAAP. At the same time, ABAC urges APEC to ensure the broadest participation in pathways to the FTAAP (ABAC 2014).
We can infer from the ABAC suggestions that ABAC is hoping that APEC will take greater steps in achieving the FTAAP. Undoubtedly, businesses in the APEC region would like to see freer trade of goods and services. The APEC members are also willing to discuss ways to advance trade and investment liberalization and facilitation. The challenge is to seek the best ways to enhance REI through trade liberalization and the enhancement GVCs. The FTAAP idea is certainly a great way to strengthen REI, as the FTAAP would be a manifestation of trade liberalization and would deepen GVCs in the APEC region.
With the strong support from ABAC for the FTAAP, APEC Leaders may have been convinced that there is the need to show greater interest in 14 realizing the FTAAP. Thus in the 2014 APEC Leaders' Declaration, Annex A of the Declaration is about the FTAAP. APEC Leaders have stated in the document that the FTAAP should support and complement the multilateral trading system. The FTAAP will be achieved outside of APEC but will be paralleled with the APEC process. This means that APEC will continue to promote its non-binding and voluntary principles as well as to serve as an incubator of the FTAAP. In addition, Leaders have related that the FTAAP should seek to minimize any negative effects from the proliferation of FTAs. The FTAAP will be built on existing and developing regional architectures. Furthermore, Leaders have said that more efforts should be exerted to conclude the pathways to the FTAAP, such as the TPP and the RCEP (APEC 2014).
Let us now examine the Leaders' views regarding the FTAAP. First, the FTAAP would be capable of supporting and complementing the multilateral trading system, because the FTAAP would be composed of twenty-one APEC member economies. The free trade area would be large, so that it would be able to promote the inclusive and trade liberalizing spirit of the multilateral trading system.
Second, the concept that the FTAAP will be negotiated outside of APEC but will remain parallel with the APEC process is understandable. The reason is that Leaders have stated that APEC will continue to adhere to the nonbinding and voluntary principles. Since FTAs are binding in nature, it is only logical that the FTAAP would be negotiated outside of APEC. However, the Leaders have also said that APEC will continue to provide guidance to the FTAAP. Thus the FTAAP will be paralleled with the APEC process.
Third, the Leaders' notion that greater efforts must be made to advance the pathways to the FTAAP, consisting of the TPP and the RCEP, is valid. The reason is that the TPP and the RCEP are the two most viable pathways to the FTAAP. Thus the conclusion of the current TPP and the RCEP negotiations would push forward the advancement of the FTAAP. If the members of the TPP and RCEP are truly interested in ensuring that they are the pathways to the FTAAP, they would seek to make sure that they are attractive to the FTAAP members or APEC. There is the possibility that a race would take place between the TPP and the RCEP to see which one of them is more suitable to be the only one pathway to the FTAAP. Another possibility is that both the TPP and the RCEP would in the end be considered by APEC to be equal pathways to the FTAAP. This means that APEC members would be able to join both the TPP and the RCEP or to join just one of the two. The two FTAs will be considered to be the FTAAP.
In order to advance the achievement of the FTAAP, Leaders have also called for actions to do so in the Annex A of the 2014 APEC Leaders' Declaration. Leaders have said that a collective strategic study will be conducted. A suggestion for the study is that APEC should clarify the meaning of the FTAAP to be negotiated outside of APEC but will be paralleled with the APEC process. Since APEC has developed the FTAAP idea, it will be more beneficial to APEC members if APEC can play a major role in realizing the FTAAP.
In addition, it is suggested that the study analyzes the issue of the TPP and the RCEP to be pathways to the FTAAP. It is valid to say that both the TPP and the RCEP are viable pathways to the FTAAP, since they are expected to be concluded sooner or later. Therefore, the fastest way to realize the FTAAP would be when the TPP and the RCEP members as well as APEC members all agree that APEC members could join both the TPP and the RCEP or only one of the two.
1. APEC. 2014. ''Annex A - The Beijing Roadmap for APEC's Contribution to the
Realization of the FTAAP.'' Singapore: APEC Secretariat.
2. ABAC. 2014. ''2014 ABAC Report to APEC Economic Leaders.'' Manila: ABAC