Bridges Weekly Trade News Digest • Volume 8 • Number 40 • 24th November 2004
APEC Leaders Re-Commit Themselves To Doha Round
Pacific Rim leaders recently stated their intent to put regional trade talks on the backburner and instead focus their efforts on bringing the Doha Round negotiations to completion. Heads of state from the 21 members of Asia-Pacific Economic Cooperation (APEC) met in Santiago, Chile on 20-21 November for the 12th APEC Economic Leaders’ Meeting, where they declared that the current WTO negotiations were the best means to achieving the goals of trade liberalisation and facilitation that the organisation set for itself at Bogor, Indonesia, ten years ago.
APEC members include the US, China, Canada, Russia, Thailand, and Singapore; together, they account for 55-60 percent of the world’s economic output as well as nearly half of all international trade. The "Bogor Goals" include free and open trade and investment in the Asia-Pacific by 2010 for industrialised economies and 2020 for developing economies.
Business leaders call for deeper APEC trade integration
In the run-up to the summit, a group of business executives on the APEC Business Advisory Council (ABAC) published a report calling for a high-level study on a Free Trade Area of the Asia Pacific (FTAAP) as a preliminary step towards creating a free trade and investment zone that would range from China to Chile. Although the report referred to the WTO as the "cornerstone… of efforts to liberalise international trade" and noted that negotiations had resumed there in the wake of the July Package, it argued that WTO negotiations alone were unlikely to result in the complete removal of trade barriers, let alone the liberalisation of investment flows, which has been dropped from the WTO’s negotiating agenda.
More than 30 trade agreements are being negotiated among the 21 members of APEC. China is involved in almost all of the potential pacts; all but four of them exclude the US. The ABAC report warned that this proliferation of bilateral and regional agreements would give rise to a "spaghetti bowl" of overlapping trade rules that would impose significant costs on business and proposed replacing the preferential trade agreements with a FTAAP.
APEC summit endorses WTO approach
Although the APEC officials at the summit "welcomed" the business group’s report, they did not endorse it, preferring to reaffirm "the primacy of the rules-based multilateral trading system". They agreed to "work with a renewed sense of urgency to achieve a balanced overall outcome… [and] substantial results at the Sixth WTO Ministerial Conference" to be held in December 2005 in Hong Kong, and reiterated their commitment to technical assistance, capacity building, and "fulfilling the development objectives of the Doha Development Agenda".
The "Santiago Declaration" also took note of the fact that regional trade agreements and free trade agreements (RTAs/FTAs) help speed up trade liberalisation. Among the recommendations were "go beyond WTO commitments" and "eliminate barriers to trade and investment" as well as barriers to trade in services in RTAs/FTAs.
According to trade sources, some US companies, for their part, were urging the Bush Administration to start discussions on a FTAAP, due to fear that China’s growing commercial ties to countries in the region could leave them "shut out" of markets there.
Nonetheless, APEC seems to have resolutely cast its eyes towards Hong Kong. "The concept of a free trade area of the Asia-Pacific is intriguing, but it joins countries with quite different perspectives," Canadian prime minister Paul Martin told the press during the summit. "The main focus must be on the Doha Round".
To access the Santiago Declaration, click here.
The access the report on a "Preliminary Assessment of the Proposal for a Free Trade Area of the Asia-Pacific (FTAAP): An Issues Paper for the APEC Business Advisory Council (ABAC)," click here.
"Bush is pressed on Pacific trade," BLOOMBERG NEWS, 22 November 2004; "APEC, focused on Doha, puts aside trade zone idea," ASSOCIATED PRESS, 23 November 2004; "One Community, Our Future: Santiago Declaration," APEC RELEASE, 21 November 2004.