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|APEC -- the quiet achiever|
|Saturday, 19 November 2011 01:31|
For many years now, APEC has been criticized as a useless talk-fest and publicity stunt. But according to Australian trade minister, Craig Emerson, APEC has not only been a "quiet achiever", it now has a new lease of life with the Trans Pacific Partnership (TPP) trade talks.
Here are the main things that Emerson had to say in his speech at last week's Australian APEC Study Centre conference:
With little fanfare, "great strides have been made in improving the environment for doing business in the region". Since its inception in 1989, APEC "has helped drive open trade and investment". Between 1988 and 2009, average APEC import tariffs fell from 16 to 6 per cent, with more in the pipeline.
Behind the border chokepoints, like regulations and red-tape, are also being tackled. The "APEC Business Travel Card" makes it easy for business to travel in the region.
These market-opening policies have helped APEC to grow 50 per cent faster than Europe’s economy over the last two decades.
Plans are on the board to improve supply chain logistics and comunications standards. And the "STAR database" is helping service exporters identify market opportunities.
At last weekend's Honolulu summit, APEC leaders agreed to reduce tariffs on environmental goods and services, and to limit tariffs on environmental good to 5% or less by end-2015.
They also agreed to a goal of reducing energy intensity by 45% by 2035 compared with 2005, an important initiative to reduce carbon emissions, and contribute to the fight against climate change.
APEC leaders agreed with the Australian initiative for a fresh approach for the deadlocked Doha trade negotiations, by breaking the agenda into manageable parts. They also reaffirmed their pledge against protectionism through a standstill commitment which they extended until end-2015.
The highlight of the APEC Summit was the agreement by nine APEC countries to a framework for a Trans-Pacific Partnership, including the commitment to eliminate all import tariffs over time. Japan, Mexico and Canada have all now expressed interest in joining the TPP. The hope is that the TPP will expand over time, and lead to APEC's ambition of a Free Trade Area of the Asia-Pacific.
Overall, Emerson claims that the recent APEC Summit "may have plugged APEC into an amplifier as the region's pre-eminent instrument of economic reform", and that "APEC could drive a new era of job-creating, prosperity-enhancing cooperation in a region that already generates 56 per cent of the world's GDP".
Emerson's message about APEC is in stark contrast to the recent history of the World Trade Organisation, whose Doha trade talks have been as "dead as a dodo" for a decade. It seems that APEC's non-legalistic approach of non-binding commitments may be more workable than the legalistic, negotiating approach of the WTO.
It is also true that fast-growing Asian economies, with already high levels of protectionism, may have found it relatively easy to reduce trade barriers.
As promising as the TPP might sound, it really is a different kettle of fish. Being driven by the US, and with great ambitions for tackling behind-the-border barriers, reaching agreement will prove very difficult. And when and if agreement is reached, getting approval by the US Congress will be another hurdle.
At the very least, however, it is very promising to have forward movement on trade liberalization at this time of global economic crisis.
Craig Emerson, Minister for Trade, Australia. "APEC -- Delivering for the Region", Address to the Australian APEC Study Centre Conference, 17 November 2011. http://www.craigemersonmp.com. http://www.trademinister.gov.au/
APEC Conference 2011 -- Is Australia Managing? Australian APEC Study Centre at RMIT University, Melbourne