How to prevent APEC from becoming divided
- By Cao Mingdi
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E-mail China.org.cn, October 30, 2014
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Inside APEC, the Trans-Pacific Partnership (TPP) is poised to replace it. APEC's position and role needs to be further defined. |
After 13 years, China is hosting the APEC Summit again this year. However, inside APEC, the Trans-Pacific Partnership (TPP) is posing to replace it. And externally, the shadow of the international economic crisis is rising again. In this state of flux, the situation is changing quickly. It is necessary to analyze APEC's internal and external environment to further define APEC's position and role.
Internally, the TPP is seriously differentiating APEC. Initially, TPP was just one of the many partnerships in the Asia-Pacific region. In 2008, the United States joined the TPP talks. And in November 2009, a plan to expand the TPP was set forth, aiming to form a regional trade arrangement including more members to reach a higher standard. This greatly enhanced the significance of the TPP. To date, the TPP has 12 member countries, including Japan. In addition, South Korea, the Philippines, Thailand and China's Taiwan have also expressed their interest in joining the negotiation. All the TPP members or negotiating targets are APEC members. Thus, the APEC members are divided into either TPP or non-TPP members. And, pushed by the United States, the TPP is becoming a new element that is influencing the Asia-Pacific regional order. Its intention to make APEC a mere figurehead is very obvious, and it is possible that the TPP will finally replace APEC.
Externally, the shadow of international economic crisis is reappearing. The International Monetary Fund (IMF) forecast in its recently published Global Economic Prospects (GEP) Reports that the high non-governmental and government debts in developed economic markets are encumbering the economic recovery while the emerging economies are adapting to low-speed growth, resulting in a global economic growth rate of 3.3 percent for 2014 and 3.8 percent for 2015. The global economy is heading towards stagnancy again, which is also increasing the financial market's worries about a global standstill. When a crisis is coming, trade protectionism can easily rise, which would thereby endanger APEC's dual strategy of "trade and investment liberalization and facilitation" and "economic and technological cooperation."
APEC has 21 members with a total population of 2.8 billion, 40 percent of the world's total. The gross domestic product in the region makes up 55 percent of the global GDP, and the trade volume 48 percent. As the highest-level inter-governmental economic cooperative system, APEC holds a significant position in global economic activities.
As an official economic forum, APEC plays a guiding and coordinating role. It pays attention to both official trade barriers and non-governmental trade costs. It stresses the exchange of information, and the importance of voluntary and international trust. Its advantage lies in informal and voluntary communication and cooperation. Its successful operation has made it an example of open regionalism.
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