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Recent progress and Future of the Asia-Pacific Trade Agreement (APTA)

Recent progress and Future of the Asia-Pacific Trade Agreement (APTA). Regional Training Program on Enhancing Utilization of ASEAN FTA, Trade Negotiation and Trade Policy Development, 31 July 2012, Mekong Institute, Khon Kaen, Thailand. Dr. Joong-Wan Cho

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Recent progress and Future of the Asia-Pacific Trade Agreement (APTA)

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  1. Recent progress and Future of the Asia-Pacific Trade Agreement (APTA) Regional Training Program on Enhancing Utilization of ASEAN FTA, Trade Negotiation and Trade Policy Development, 31 July 2012, Mekong Institute,Khon Kaen, Thailand Dr. Joong-Wan Cho Chief, Trade Policy Section Trade and Investment Division UNESCAP

  2. APTA: Past and Present

  3. Past and Present of APTA History of APTA • The oldest preferential trade agreement among developing countries in the Asia-Pacific region - Predecessor: Bangkok Agreement(BA), signed in 1975 • China joined in 2001, providing fresh momentum • Renamed to the Asia-Pacific Trade Agreement (APTA) in 2005 • Established the Ministerial Council in 2005 • Beijing(Nov 2005) → Goa(Oct 2007) → Seoul(Dec 2009) • Launched the 4th Round of tariff concessions in 2007

  4. Past and Present of APTA Performance of APTA (1) Intra-regional trade share increased by almost 47% over 2003-2009 Source: Compiled from Trade Map, International Trade Centre

  5. Past and Present of APTA Performance of APTA (2) (based on the ‘Pilot Study for China and the Republic of Korea’, 2009) • Utilization rates of APTA (i.e. extent to which concessions are actually used) • increased significantly from the 1st(07-08) to 2nd year(08-09) of implementation of the third round: - Republic of Korea : from 20% to 34% - China : from 25% to 37%

  6. Past and Present of APTA New Momentum since 2007 (the second Ministerial Council) • The 4th Round of Tariff negotiations Aim to: • Widen the preferences to cover at least 40% of the number of tariff lines & average tariff concession of each Participating State; • Cover at least 20-25% of the value of bilateral trade. • Extend into new areas of cooperation • Trade facilitation • Trade in services • Investment • Non-tariff Measures • Revision of rules of Origin • General • Sectoral agreement (Product-Specific Rules of origin) • Expand membership on a priority basis → Mongolia: Formal application in 2009, expected to accede by end-2012. Cambodia, Nepal, Papua New Guinea: Intention of application

  7. Future of APTA

  8. Future of APTA : Potentials Potential of APTA “Huge, but low level of deepening” Pros Cons • The only truly region-wide preferential trade arrangement • Open system with huge market potential • Bridge to other RTAs • Simple and operational • WTO consistent • Low connectivity due to geographical reason • Undeveloped potential • Not “Core” for regional economic integration • Potential barriers for deepening APTA further APTA itself is an evolving Agreement

  9. Future of APTA : Potentials What-to-be of APTA: Evolving paths of APTA FTA for all ESCAP [‘real’ APFTA] No. of Members Trade Agreement For All ESCAP Asia-Pacific FTA APTA Preference Level

  10. ACP Caribbean nation Other Latin America Turkey Former USSR New EU NAFTA + Chile Denmark UK NAFTA EMU MERCOSUR EFTA Australia New Zealand Other Asian Countries ASEAN+6 ASEAN+3 ASEAN /AFTA ROK India APTA China Japan The future of APTA : Potentials No ‘Core’ trade agreement for economic integration in Asia-Pacific Trans-Atlantic cooperation ASEM APEC Tri-polarization of World economy * ASEM: Asia Europe Meeting, APEC: Asia Pacific Economic Cooperation

  11. The future of APTA : Potentials APTA can be the “core” Regional Trade Agreement? • Candidates • % of World GDP: NAFTA 27.2%, EU 25.8% (based on World Economic outlook (IMF, April 2012) & Statistical Year book 2011 of UN ESCAP)

  12. The Future of APTA : Potentials How can APTA be the “core” regional trade agreement? • Consensus on the future direction of APTA & Strategy/Roadmap among Member States - The APTA Secretariat continues to facilitate/coordinate efforts to accelerate regional integration through the APTA mechanism. • Deepening and Widening of APTA - Keep on deepening the tariff preference, expansion of coverage of the Agreement and Membership expansion. • Support from the private sector + Mobilize political support - Regional/national meetings for the business sector of APTA are needed and planned under the above project.

  13. The future of APTA : Potentials Why is the Business sector important for APTA? • Users of APTA - Utilizing the preferences offered under APTA (importers and exporters) • Important stakeholders - Supporters for the further progress of APTA - Low support/awareness and Low Utilization from the business sector => lead to slow evolution of APTA

  14. The future of APTA : Potentials Why the Business Sector is important ? Role of Business Potential Result • Most dynamic economies are APTA members • Strong Platform for South-South cooperation (* Built-in Mechanism of LDCs) • Good candidate for Economic Integration of Asia and Pacific Virtuous Cycle • Raising awareness of Business sector • Increasing Utilization rate of Business sector • Getting more support from Business Sector Progress of APTA Raise Awareness /Support Increase Utilization /interest

  15. The future of APTA : Potentials Awareness-building project (by APTA Secretariat) • For Business sector - A series of National seminars for the APTA business sector in APTA Participating States - Annual meetings of the APTA Business Network (ABN) • For Academia - Regional seminars on APTA among experts from APTA Participating States - Expert Group Meetings • For the Public - Upgrade of the APTA web site (user-friendly site) - National seminars

  16. Thank you! APTA official website: http://www.unescap.org/tid/apta.asp Email of the Secretariat: escap-apta@un.org

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