Asia-Pacific free trade area: The road to better economic integration in the region
Zhang Jun says while work on the proposed Asia-Pacific free trade area is advancing, all economies involved would also do well to focus on finding synergy among the existing agreements
The Apec Economic Leaders’ Meeting will be held in Manila on Wednesday and Thursday. The proposed Free Trade Area of the Asia-Pacific, which will serve as an important pathway for regional economic integration, is bound to be a hot topic at the meeting.
Twenty-one years ago in Bogor, Indonesia, Apec leaders put forward the Bogor Goals that aimed to liberalise trade and investment in the Asia-Pacific’s industrialised economies by 2010, and by 2020 for developing economies. Since then, Apec has witnessed a new era in advancing economic cooperation.
Apec economies have endeavoured, through joint efforts, to pursue free and open trade and investment, and promote mutual prosperity and stability in the region, turning it into an engine of global economic growth.
Over the past 21 years, Apec economies have remained committed to achieving the Bogor Goals, as well as to regional cooperation. However, alongside progress, new problems and challenges have also emerged. Given the “spaghetti bowl effect” of the various overlapping regional trade arrangements, there is a risk of fragmentation.
Faced with such challenges, Apec economies have begun to explore a high-level free trade arrangement encompassing all members, and that was how the proposal for an Asia-Pacific free trade area came into being.
With the joint efforts of all economies involved, work on the free trade area has been progressing steadily: in 2006, Apec leaders agreed to make it a long-term vision; in 2010, all economies reached a consensus on speeding up the regional economic integration process, and exploring the possible pathways to a free trade area; in 2014, leaders decided to launch and promote the process by endorsing the Beijing road map towards realising the free trade area.
A Free Trade Area for the Asia-Pacific will not only provide an important driving force for the promotion of free trade and investment, it will also take us closer to the Bogor Goals. And it shows the way for Asia-Pacific economic and trade cooperation beyond 2020. This illustrates the importance of such a free trade area to Apec, now and in the future.
We are glad to see that Apec economies have made substantial progress in the past year in working towards the free trade area, especially in the collective strategic study, as outlined in the Beijing road map.
In May, the meeting of Apec ministers responsible for trade endorsed the terms of reference of the study, and established a core drafting group. During the Apec senior officials’ meeting in September, the assignments of the core drafting group and the writing plans for each chapter of the study were agreed on.
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Now, we are trying our best to finish the first draft by the first senior officials’ meeting next year, and a more refined one by the trade ministers’ meeting.
We aim to complete the collective strategic study by the end of 2016, in the hope of providing some pragmatic suggestions to Apec leaders.
Alongside the welcome progress of an Asia-Pacific free trade area, breakthroughs have also been observed in other regional free trade negotiations, such as the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership. The former has entered the comprehensive price negotiation stage, while the TPP reached an agreement among all parties last month.
These negotiations will inevitably affect the process and direction of Asia-Pacific economic integration.
However, as the region covers a broad spectrum of economies and areas of cooperation, there is no doubt that regional economic integration should not and could not only follow one path. As an old saying goes, all roads lead to Rome. The Free Trade Area of the Asia-Pacific and other regional free trade arrangements neither contradict nor try to supplant one another, but are closely related, even complementary.
China is open to all cooperation proposals that promote regional economic integration and common prosperity. We encourage all economies to adopt the following principles in advancing Asia-Pacific economic integration.
First, we should support the multilateral trading system, and push forward the Doha Round of world trade talks.
Second, we should be mindful of the different level of development among economies in the region, and show respect to the special demands of developing economies.
Third, we should promote coordination and synergy among different free trade arrangements to achieve win-win cooperation, so as to avoid fragmentation, conglomeration and politicisation of regional economic cooperation.
While all economies have taken firm steps to build up the Free Trade Area of the Asia-Pacific, we should clearly recognise that such a huge free trade arrangement cannot be completed in one go. We must push it forward stage by stage, with patience and care.
With the opportunity afforded by the Apec Economic Leaders’ Meeting in Manila, China would like to work together with other economies, in the spirit of mutual trust, inclusiveness and win-win cooperation, to accelerate the realisation of the Asia-Pacific free trade area, deepen regional economic integration and build an open Asia-Pacific economy, to foster development, prosperity and advancement for the region.
Zhang Jun is director general of the Department of International Economic Affairs at the Ministry of Foreign Affairs