APEC leaders focus on creating economic growth

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: What makes the APEC economies different is that its businessmen and politicians actually count the days left to attain free trade. That perception got reinforced by last week’s Asia-Pacific Economic Cooperation (APEC) Summit of CEOs in Singapore (November 12-14). Meanwhile, the APEC’s theme for the year 2009 is “Sustaining Growth, Connecting the Region”.

That is the crux since APEC businessmen—even politicians—all trace the source of the present slowdown mainly to inadequate commerce. That is very unlike the 1997-98 financial crisis. Ergo, they saw the latest summit as yet another chance to reiterate the ideals of free trade.

Those ideals show their conviction that best way to raise growth rates, and iron out economic cycles, is to make the Asia-Pacific region into a huge free trading zone. That helps enlarges the domain of purchasing power; it also provides the competitive environment for R&D. Clearly, the focus has shifted from the US and Europe, to Japan and East Asia.

That also explains the APEC’s preoccupation with the ‘Bogor Goals’ of free and open trade—including sand in the wheels of commerce, like tariffs, NTBs, and other trade and investment restrictions. Rules of Origin, because of how they tend to get misused, also come in for special consideration.

The idea is to give businesses freedom to profit from the 42 FTAs that already exist amongst APEC member-states. A study has already quantified the net results of 30-odd such FTAs, noting the possible areas of convergence, dissonance, and also the various ‘docking, merging or enlarging’ options FTAs face if they are to coalesce into a region-wide FTA.

Also at the proposal stage is APEC’s wish to marshal a Trans-Pacific Partnership (TPP) pact between Brunei, Chile, New Zealand and Singapore. The idea is then to turn the pact into a region-wide trade agreement. (There is virtual unanimity within APEC that such a grouping would yield superior returns, as would the creation of FTAAP—a free-trade area of the Asia-Pacific.

All that sums up the intent of the ‘new growth paradigm’ which aims at sustained and balanced growth which is all-inclusive (in the sense of extending to small developing economies like Papua New Guinea).