Free trade for the future
- By Bai Shi
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E-mail Beijing Review, November 2, 2014
Prospects for FTAAP
The building of FTAAP is among the most eye-catching proposals to be discussed during the 2014 AELM.
The prospect of building FTAAP was first proposed as early as 2004. The proposal was written into the APEC Economic Leaders' Declaration eight years ago. APEC member economies have long discussed the issue.
At the Boao Forum for Asia in April, Chinese Premier Li Keqiang suggested that APEC member economies should consider beginning feasibility research on FTAAP to better facilitate trade and investment in the Asia-Pacific region.
"Now it is time to take actions. We will blow the horn at the AELM in Beijing. Starting the negotiation process of FTAAP will be an important goal for APEC this year," Chinese Vice Foreign Minister Li Baodong said at the Boao Forum for Asia on April 10.
Over the past decade, Asia-Pacific regional economic integration has embraced rapid development. A large number of bilateral and multilateral trade agreements have been signed between member economies.
However, despite the agreements, Asia-Pacific economies are still divided into several groups rather than a broad and more general preferential multilateral framework for all.
For example, both of the two major multilateral trade agreements in the region are not fully representative. The United States-led Trans-Pacific Partnership does not include China. The Regional Comprehensive Economic Partnership proposed by the Association of Southeast Asian Nations has China as a member, but the United States has yet to join it.
Many member economies have long been calling for APEC to play an active role in promoting the negotiation process for building FTAAP, Wang said.
Currently, protectionism remains a major barrier against free trade and investment across borders. Particularly in the aftermath of the global financial crisis in 2008, many economies have strengthened trade barriers and seen disputes occur frequently. "This situation hinders free trade and economic growth while deviating from the Bogor Goals," researcher Shen Minghui commented.
Under these circumstances, the efficiency and effectiveness of the numerous free trade agreements in the Asia-Pacific region have yet to be tested. The China-ASEAN Free Trade Agreement, for instance, was initiated in 2010. However, only 35 percent of Chinese enterprises can fully utilize it for trade transactions, Shen Minghui said.
Moreover, China has not reached free trade agreement with some major trading partners of China in the region, such as the United States, Japan and Australia.
"If APEC can build FTAAP, then all member economies will benefit from it," Shen Minghui said. But he admitted, given the large economic development gap between the 21 APEC member economies, it is difficult to cater to all tastes.
"FTAAP is a long-term prospect for APEC member economies. For now, all parties should take concrete steps to reach consensus on exerting efforts toward the goal," Shen Minghui said.
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