APEC Process and Future Prospects

1. APEC Process and Future Prospects Chen-Sheng Ho, Ph.D. Associate Research Fellow Chinese Taipei APEC Study Center Taiwan Institute of Economic Research

2. Purpose of Presentation • Analyze the overall APEC Process. • Assess the Bogor Goals in particular. • Provide suggestions for enhancement.

3. The Dynamic APEC Process APEC Process: Four Interacting Elements • APEC Goals: Bogor Goals (developed economies will achieve free and open trade and investment by 2010 and developing economies by 2020). • Decision-Making Principles: Consensus building, voluntary participation, and non-binding decisions. • Organizational Structure: Policy-level APEC fora and working-level APEC fora. • Approaches: Types of APEC actions, such as individual action plans (IAPs), collective action plans (CAPs), best practices, pathfinder approach, and model measures.

4. APEC Goals APECProcess APEC Growth APEC Decision-Making Principles Organizational Structure Approaches APEC Process

5. Analyzing the APEC Process Before the Bogor Goals (1989-1993) • APEC Goals: closer regional economic cooperation and supporting the multilateral trading system. • Decision-Making Principles: Similar to current principles. • Organizational Structure: Gradual development; 2 fora in 1989 and 11 by 1993. • Approaches: Concrete approaches not evident.

6. Analyzing the APEC Process After the Bogor Goals (1994-Today) Major Observations • The creation of the Bogor Goals strengthens APEC’s development in a positive way. • The Bogor Goals do not have a quantitative target, such as 0 tariffs, so that free trade could be loosely interpreted. • The decision-making principles remain useful because of flexibility. • The Organizational Structure has been enhanced with 20 fora in 1994 and about 45 presently. • The approaches have diversified but most actions, implemented in the form of meetings and studies, may have limited impact.

7. Analyzing the APEC Process After the Bogor Goals (1994-Today) Major Challenges • APEC process may be moving too slowly, because of flexibility. • APEC could be focusing on too many issues. • APEC process may be too expensive with costs greater than benefits.

8. Assessing Bogor Goals and ECOTECH-TILF Relationship • The creation of Bogor Goals resulted in OAA’s TILF and ECOTECH in 1995. • The Bogor Goals have caused TILF to garner greater attention than ECOTECH. • APEC developed members promote TILF while developing members support ECOTECH. • Within TILF, APEC has implemented more trade facilitation actions than trade liberalization actions. • The ITA is the most notable success of APEC trade liberalization. • In reality, the achievement of Bogor Goals is being driven by trade facilitation. • ECOTECH is supposed to support TILF but has largely operated independently.

9. Progress in Achieving the Bogor Goals APEC’s View: Positive Advancement 2005: “A Mid-Term Stocktake of Progress towards the Bogor Goals” • The Report states that APEC economies have achieved significant liberalization and facilitation of trade and investment since 1994. • The Report also suggests that APEC supports WTO; develop effective IAPs and CAPs; emphasize trade and investment facilitation; enhance ECOTECH cooperation; and create workplan on FTAs.

10. Progress in Achieving the Bogor Goals APEC’s View: Positive Advancement 2010: “Fact Sheet on Individual Efforts Made towards the Achievement of the Bogor Goals” • The Fact Sheet consists of fifteen sections: 1) Tariffs; 2) Non-Tariff Measures; 3) Services; 4) Investment; 5) Standards and Conformance; 6) Customs Procedures; 7) Intellectual Property; 8) Competition Policy; 9) Government Procurement; 10) Deregulation/Regulatory Reform; 11) WTO Obligation/ Rules of Origin; 12) Dispute Mediation; 13) Mobility of Business People; 14) Trade Facilitation; and 15) Promotion of High-Quality RTAs/FTAs. • APEC developed economies will provide information on the status of the various sections in 1996 and 2009. • The probable conclusion of the assessment would be that developed economies have attained the Bogor Goals. • The Fact Sheet is easy to complete, so that developed economies would be able to list all kinds of achievements.

11. Progress in Achieving the Bogor Goals Author’s View: Opaque Advancement • APEC’s progress is not clear, as performance indicators are not provided. What is the meaning of free and open trade and investment? • Quantitatively, a stringent definition of free trade could mean zero trade barriers. A free trade area is an excellent example. Trade barriers still exist in most APEC economies. • If the Bogor Goals is about freer trade, then developed members have realized the Bogor Goals and developing members are making progress. APEC has developed trade liberalization and facilitation actions, with ITA as an example. • APEC continues to be criticized for not doing enough for business and for not convincingly achieve the Bogor Goals. • APEC should solidify the meaning of the Bogor Goals and to develop other major goals, so as to increase stakeholders’ support.

12. Enhancing Relevance of Bogor Goals Clarifying Bogor Goals • First, APEC could endorse the acceptance of a revised Bogor Goals called Bogor Goals 2.0 and the purpose is to link with the past and to embrace the future. • Second, Bogor Goals 2.0 could be the advancement of freer trade. As long as APEC trade barriers are being lowered progressively, APEC would be achieving freer trade. Bogor Goals 2.0=Freer Trade • Third, APEC could define Bogor Goals 2.0 to be the realization of free trade but with a precise meaning of free trade. Thus free trade could mean zero trade barriers or other value. APEC could also develop qualitative criteria for measuring achievement. Bogor Goals 2.0=Zero Trade Barriers

13. Enhancing Relevance of Bogor Goals Enlarging the Bogor Goals • Fourth, APEC could endorse another major goal in addition to Bogor Goals 2.0. The new goal could focus on ECOTECH. TILF and ECOTECH would enjoy parity. Bogor Goals 2.0+ECOTECH Goal • Fifth, APEC could consider the development of an innovative goal that incorporates APEC’s work on TILF and ECOTECH. The new goal would advance regional economic integration. Regional Economic Integration Goal

14. Enhancing Relevance of Bogor Goals Transforming the Bogor Goals • Sixth, if APEC is truly serious about achieving free trade in the APEC region, then the realization of the free trade area of the Asia-Pacific (FTAAP) idea is the best option. FTAAP or APEC TPP

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