APEC faces TPP challenge
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In a joint statement released after the Ministerial Meeting at the Asia-Pacific Economic Cooperation (APEC) 2010, APEC ministers reaffirmed the establishment of a Free Trade Area of the Asia-Pacific (FTAAP) and opposition to trade protectionism, and appealed for further efforts to realize the objectives of the Doha Development Agenda.
The statement also recommended that leaders reaffirm their commitment to maintaining the status quo and do not erect new trade or investment barriers and do not impose any new export restrictions before the end of 2013.
They also agreed not to implement measures that violate World Trade Organization rules, including measures aimed at stimulating exports.
Meanwhile, the statement stressed that all parties will further reinforce the agenda of Asia-Pacific regional economic integration (REI) and jointly implement the new economic growth strategy.
APEC, as the world's leading growth center, is in a unique position to share its growth strategy with other economies to sustain global recovery and shoulder the heavy responsibility of leading the world economy to future prosperity.
However, in the midst of the global financial crisis, while APEC has the ambition to rally the world economy, it cannot change the basic trends of the world economy on its own, it still needs to cooperate with other international forums, including the Group of 20 (G20) and work with the Association of Southeast Asian Nations (ASEAN).
The Trans-Pacific Strategic Economic Partnership Agreement (TPP) - a multilateral free trade agreement including Chile, New Zealand, Singapore, and Brunei - was also a hot topic during the APEC Ministerial Meeting. It is probable that eight APEC member economies, including the United States and Japan, will join the TPP. This would certainly be a boost for US strategy.
Since the 1990s, Washington has sought to promote the building of a US-led Asia-Pacific community through the establishment and operation of APEC. However, though APEC has played an important role in promoting economic integration and regional trade, and has accelerated investment liberalization and facilitation, in the view of the US, the APEC advancement process is too slow, inefficient and lacks binding power over members.
More importantly, it is indifferent to a US-led Asia-Pacific community. On the contrary, since the 1990s, the independent cooperation of East Asian countries has witnessed significant progress.
So, apart from pinning its hopes on APEC, the US has begun to attach more importance to the TPP, which it hopes can shore up the nation's economy and help it emerge from recession. President Barack Obama says that the TPP will be a "high-standard 21st century regional trade agreement". The US has also sought to persuade its ally Japan to join the TPP.
As a major trading nation, Japan pays extremely close attention to trade liberalization. But Japan has some apprehension about joining the TPP, because while emphasizing trade liberalization, Japan also takes its agricultural vitality seriously.
The involvement of the US, Japan and other countries in the TPP will have many consequences. First, thanks to its overwhelming superiority in the TPP, Washington's leading role in trans-Pacific cooperation will be further strengthened. Second, coordinating the relationship between the TPP and other established regional cooperation mechanisms will become an important topic in future regional cooperation. Japan's admission to the TPP might lead to the "10+3" mechanism (ASEAN, China, Japan and the Republic of Korea) existing in name only. With more and more Asia-Pacific countries joining the TPP, the inefficient APEC and the FTAAP could well be undermined, marginalized, and even be replaced.
According to the signals emerging from the APEC meetings, some APEC members are certain to join the TPP, while they also hope that the TPP can be compatible and complementary with other mechanisms, such as APEC.
But the regional economy and politics will ultimately decide the long-term viability of any multilevel and multilateral cooperation framework in the Asia-Pacific region.
If APEC, with years of advancement, can stay in tune with the times and carry out effective reform, it will still have exuberant vitality.
The author is a research fellow with the Institute of Asia-Pacific Studies under the Chinese Academy of Social Sciences.
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