Apec's industrialised countries have yet to reach open trade goals set 15 years ago with a deadline of next year, even as the Asia-Pacific group ponders building an ambitious regional free trade area, officials said. The "Bogor Goals", adopted at the 1994 Asia-Pacific Economic Co-operation summit in Bogor, Indonesia, called for industrialised members to achieve free trade and investment targets by 2010 and for developing member economies to do so by 2020.
"Apec is still deciding exactly how to measure this," said one Apec official. "So, depending on the performance indicators, it is possible that some economies may not achieve their targets. However, based on tremendous progress to date, it seems possible, and in many cases very likely, that the targets should be met." Former US Trade Representative Carla Hills had a harsher assessment.
"We're not yet at 2010," she told Reuters on the sidelines of a symposium marking Apec's 20th anniversary on Tuesday. "But my expectation is that we are now perilously close to 2010, and you cannot make the assertion that the industrialised economies of Apec have free trade of goods and services and investment throughout the Asia Pacific."
"In fact, to the contrary. We have seen ... with the global economic crisis, the increase of trade barriers." Singapore's Prime Minister Lee Hsien Loong, in welcoming remarks to Apec ministers late on Tuesday, said they were meeting at a "pivotal moment", when the economic situation has stabilised, but the outlook remains uncertain. "So, this 20th anniversary is a good time to re-energise Apec and re-commit ourselves to its work to ensure that Apec continues to take the lead in trade liberalisation and business facilitation," Lee said.
Apec foreign and trade ministers, meeting on Wednesday and Thursday, will look at blueprints for an Asia-Pacific free trade area, which leaders of the 21-member group could then discuss at their weekend summit in Singapore. "We will continue to put in place building blocks towards a possible Free Trade Area of the Asia-Pacific (FTAAP) in the future," said a draft declaration to be issued by Apec economic ministers this week and obtained by Reuters.
Twenty years after it was founded, Apec has often been scorned as a glorified talk shop - four adjectives in search of a noun, one wag once called it - where leaders gather at the end of their annual summit for a class photo wearing "funny shirts" from the host country. But the grouping is now actively considering various models for an FTAAP, said Elizabeth Chelliah, chairwoman of Apec's committee on trade and investment.
"It is slow for you all, but it takes a lot of detailed analysis so that economies are comfortable (and) once we launch it, it will move a lot faster," she said. The FTPAP, which would turn the largely aspirational Bogor Goals into a binding agreement, was first proposed at the 2006 meeting in Hanoi. It has gained renewed impetus, with the Doha Round of world trade talks stalled for eight years now. But Apec sceptics note the grouping has yet to walk the talk.
"Every meeting, we say that we are going to open trade across the region and around the world. That has been stated 20 times. All right, let's get on with it," Hills said. Apec member economies account for 40 percent of the world's population across four continents, more than half of global gross domestic product, and nearly half of world trade.
They will likely lead the global economic recovery. "The G-20 has elevated itself to be the forum where a lot of the key issues of the new financial architecture and the new infrastructure of the post-crisis, financial system in the post-crisis economy will be addressed," said Societe General's chief economist for Asia, Glenn Maguire. One study has found Apec, whose diverse membership ranges from impoverished Papua New Guinea to the world's biggest economy the United States, may well be getting the benefits of free trade even without a formal agreement.
Member economies have virtually eliminated tariffs and continue to find ways to reduce trade barriers, the report released by a group of economists this week said. Apec's total exports grew five-fold between 1989 when it began to 2007, from $1.2 trillion to $6.2 trillion, an annualised average growth rate of 9.5 percent compared to the world average of 8.9 percent, the study found.