APEC urged to pave way for Pacific free trade zone
Monday, 27 August 2007
SINGAPORE, Aug 26 (AFP): It may be a distant goal at the moment but Asia-Pacific leaders are likely to give a nudge to plans for a vast free trade zone stretching from China to Chile when they meet in two weeks' time.
Senior officials working on the project have drawn up recommendations for leaders gathering in Sydney that would lay the groundwork for a trans-Pacific free trade area.
A draft document to be submitted at the September 8-9 Asia-Pacific Economic Cooperation (APEC) summit recommends that preparatory research be carried out on how to turn the vision into reality.
The United States, one of the biggest advocates of the proposed free trade area of the Asia- Pacific, says it would improve the region's prosperity as a whole while binding member states closer together.
At the same time, analysts suggest the zone could serve as a Plan B should the stalled Doha round of talks, aimed at breaking down global trade barriers, eventually collapse outright.
What APEC decides to do carries a lot of weight.
Its 21 members include three of the world's five biggest economies in the United States, Japan and China, and together account for around 70 per cent of global economic output and half of its trade.
APEC leaders, at their Vietnam summit last year, directed senior officials to draw up suggestions on promoting regional economic integration.
In the draft document, seen by the news agency, the senior officials will suggest that APEC examines the FTAAP as a long-term prospect "through a range of practical and incremental steps."
It would include looking at the possible implications of such a huge zone and compiling an inventory of issues that would need to be tackled as part of the preparatory process.
"An FTAAP could make considerable contribution to economic integration in the Asia-Pacific region, but its implications are not yet fully understood," the document says.
"Nor are the issues that would need to be addressed clearly identified.
"It is nevertheless clear that more could be learned from intensified work among the APEC economies about the challenges an FTAAP would present, as well as the opportunities it could provide."
The officials say APEC should analyse existing free trade agreements to be able to cherry-pick the best ideas.
US trade officials say that while advancing the Doha talks remains the top priority, APEC should also focus on regional economic integration.
Sean Spicer, spokesman for US Trade Representative Susan Schwab, told newsmen that APEC leaders should "seriously" consider a trans-Pacific zone.
He added: "An FTAAP would be a visionary undertaking that would do much to improve the prosperity of the people of the region. It also signals the United States' commitment to deepening its trans-Pacific economic ties."
Opponents, however, fear a free trade zone will be dominated by the United States, while other analysts doubt the prospects of getting all APEC economies to overhaul their voluntary grouping and agree a binding set of rules.
The summit in Sydney is expected to use APEC's clout to try to revive the World Trade Organisation's Doha round, which is bogged down amid disagreement on farm subsidies.
A consequence of the prolonged impasse has been a mushrooming of bilateral and regional free trade agreements.
It has got to the point analysts have warned that failure to harmonise the "noodle bowl" of FTAs could heighten the risk of protectionism in the absence of a global trade arrangement.
Top APEC business executives also favour a Pacific free trade zone, saying the absence of a breakthrough in Doha should spur regional economies to look for alternatives.
In their annual report to the leaders, the APEC Business Advisory Council said schemes such as an FTAAP "would offer opportunities to advance the trade and investment liberalisation and facilitation agenda."
The corporate chiefs said an FTAAP could stem the proliferation of FTAs and consolidate them into a single pact consistent with WTO rules.
Senior officials working on the project have drawn up recommendations for leaders gathering in Sydney that would lay the groundwork for a trans-Pacific free trade area.
A draft document to be submitted at the September 8-9 Asia-Pacific Economic Cooperation (APEC) summit recommends that preparatory research be carried out on how to turn the vision into reality.
The United States, one of the biggest advocates of the proposed free trade area of the Asia- Pacific, says it would improve the region's prosperity as a whole while binding member states closer together.
At the same time, analysts suggest the zone could serve as a Plan B should the stalled Doha round of talks, aimed at breaking down global trade barriers, eventually collapse outright.
What APEC decides to do carries a lot of weight.
Its 21 members include three of the world's five biggest economies in the United States, Japan and China, and together account for around 70 per cent of global economic output and half of its trade.
APEC leaders, at their Vietnam summit last year, directed senior officials to draw up suggestions on promoting regional economic integration.
In the draft document, seen by the news agency, the senior officials will suggest that APEC examines the FTAAP as a long-term prospect "through a range of practical and incremental steps."
It would include looking at the possible implications of such a huge zone and compiling an inventory of issues that would need to be tackled as part of the preparatory process.
"An FTAAP could make considerable contribution to economic integration in the Asia-Pacific region, but its implications are not yet fully understood," the document says.
"Nor are the issues that would need to be addressed clearly identified.
"It is nevertheless clear that more could be learned from intensified work among the APEC economies about the challenges an FTAAP would present, as well as the opportunities it could provide."
The officials say APEC should analyse existing free trade agreements to be able to cherry-pick the best ideas.
US trade officials say that while advancing the Doha talks remains the top priority, APEC should also focus on regional economic integration.
Sean Spicer, spokesman for US Trade Representative Susan Schwab, told newsmen that APEC leaders should "seriously" consider a trans-Pacific zone.
He added: "An FTAAP would be a visionary undertaking that would do much to improve the prosperity of the people of the region. It also signals the United States' commitment to deepening its trans-Pacific economic ties."
Opponents, however, fear a free trade zone will be dominated by the United States, while other analysts doubt the prospects of getting all APEC economies to overhaul their voluntary grouping and agree a binding set of rules.
The summit in Sydney is expected to use APEC's clout to try to revive the World Trade Organisation's Doha round, which is bogged down amid disagreement on farm subsidies.
A consequence of the prolonged impasse has been a mushrooming of bilateral and regional free trade agreements.
It has got to the point analysts have warned that failure to harmonise the "noodle bowl" of FTAs could heighten the risk of protectionism in the absence of a global trade arrangement.
Top APEC business executives also favour a Pacific free trade zone, saying the absence of a breakthrough in Doha should spur regional economies to look for alternatives.
In their annual report to the leaders, the APEC Business Advisory Council said schemes such as an FTAAP "would offer opportunities to advance the trade and investment liberalisation and facilitation agenda."
The corporate chiefs said an FTAAP could stem the proliferation of FTAs and consolidate them into a single pact consistent with WTO rules.