Senior officials continue to provide updates at each of their meetings on the most recent developments on FTAs/RTAs in the region.
Free Trade Area of the Asia-Pacific
Discussions on the possible pathways to the Free Trade Area of the Asia-Pacific (FTAAP) continue. In November 2014, APEC Leaders endorsed the Beijing Roadmap for APEC’s Contribution to the Realization of the Free Trade Area of Asia-Pacific (FTAAP) to translate the vision of the FTAAP into reality. The roadmap provides for a Collective Strategic Study on Issues related to the Realisation of the FTAAP to be concluded by end of 2016, as well as enhanced information sharing and capacity building. The study will provide an analysis of potential economic and social benefits and costs, analyse the various pathways towards a Free Trade Area of the Asia-Pacific, and identify challenges economies may face in realizing the FTAAP.
APEC Information Sharing Mechanism on Regional Trade Agreements (FTAs)/Free Trade Agreements (FTAs)
APEC economies also agreed to an APEC Information Sharing Mechanism on Regional Trade Agreements (RTAs)/Free Trade Agreements (FTAs) that will enhance understanding among economies of possible pathways and build stakeholder support, contributing to the eventual realization of the FTAAP. The agreed elements of the mechanism include:
- Enhancing access of information on RTAs/FTAs
- Sharing and assessing information on WTO-plus elements of RTAs/FTAs
- Holding annual dialogues and reports on RTAs/FTAs
- Reinforcing and intensifying use of WTO RTA transparency mechanism.
In support of the work under the mechanism, the APEC Policy Support Unit (PSU) has also been tasked to undertake research and produce annual reports on trends and developments in FTA/RTA provisions and outcomes concluded by APEC economies.
In response to enhancing access and sharing/assessing of information, CTI will work with economies to update the existing APEC comparative tool database on FTA/RTAs at http://fta.apec.org.
Links to FTAs/RTAs Information by Economy
To provide easy access to updates to concluded FTAs/RTAs and progress in relation to on-going negotiations, member economies provided e-links to the existing FTAs:
Starting in 2015, Senior Officials will hold a dialogue under the information sharing mechanism, in the margins of the Second Senior Officials Meeting in May, to discuss trends and patterns in regional FTAs/RTAs, key World Trade Organization (WTO)-plus elements and treatment of newer issues.
Capacity Building Needs Initiative
To support further capacity building towards the eventual realisation of a Free Trade Area of the Asia-Pacific (FTAAP), CTI developed an Action Plan Framework for the 2nd REI CBNI (2015-2017), which was subsequently endorsed by APEC Ministers and Leaders in Beijing. The 2nd Regional Economic Integration Capacity Building Needs Initiative follows the successful implementation of the Action Plan Framework for REI Capacity Building Needs Initiative 2012-2014.
Several capacity building training workshops were conducted in 2014 including:
- Government procurement (9-10 January, Ho Chi Minh City)
- Preparing for FTA negotiations: research, analysis, consultation, development of negotiating positions and team building (6-7 May, Qingdao)
- Safeguards including transitional safeguards (10-11 June, Surabaya)
- Scheduling of services and investment commitments in FTAs (28-29 October, Singapore)
- Intellectual property (17-18 December, Ho Chi Minh City).
For 2015, APEC Senior Officials will design additional targeted and tailor-made capacity building activities under the 2nd Capacity Building Needs Initiative to narrow the gap of the capacities of APEC economies to facilitate the eventual realisation of the FTAAP.
Next Generation Trade Issues
APEC senior officials will continue to build on next generation trade and investment issues by sharing progress achieved towards implementing the CTI goals. They will undertake further study on the impact of local content requirements on regional integration and economic growth, and discuss possible ways through which economies can promote job creation and competitiveness goals to enhance rather than distort trade. In 2014, APEC economies agreed on an initiative on manufacturing related services in supply chains/value chains as a next generation trade and investment issue, and will develop a plan of action in 2015 to address the issue.
Promoting high quality RTAs/FTAs
In 2008 the Committee on Trade and Investment (CTI) completed its work on model measures by concluding five chapters, including a chapter on Customs Administration and Trade Facilitation that was developed by the APEC Business Advisory Council (ABAC). This brings the total number of chapters to 15 (see Appendix 2 of the 2008 CTI Annual Report). These model measures will serve as a reference for member economies seeking to negotiate RTAs/FTAs and will assist in promoting consistency in RTAs/FTAs across the region. The initiative builds upon the APEC Best Practices for RTAs/FTAs which also serve as a useful guide for APEC members when undertaking RTA/FTA negotiations.
In 2009 the CTI explored possibilities for the model measures for trade facilitation to be expanded in order to provide more specificity and content. A comparative listing of the 2005 APEC model measures for trade facilitation, the 2008 ABAC model measures for trade facilitation and customs facilitation, and the trade facilitation chapter from the Canada-Costa Rica FTA was compiled for this exercise. The CTI noted the possible contribution of comparative listing to future work on APEC's Second Trade Facilitation Action Plan (TFAP II) and on the Supply-Chain Connectivity (SC) Framework.
Identifying Convergences and Divergences
In 2009, the Convergences/Divergences Study of APEC FTAs was updated by expanding the scope from 30 to 42 intra-APEC FTAs/RTAs and deepening the coverage to include a new chapter on electronic commerce.
In 2010, an overview and a matrix of a new chapter analysis on cooperation were completed by Thailand. The analysis of the cooperation chapter showed that a broad convergence among the cooperation chapters of the analyzed FTAs is highly feasible. Most of the objectives, forms/activities, mechanism/work programme of cooperation are common in content.
The 14 chapters covered previously were: market access, rules of origin, customs procedures, environment, investment, trade remedies, competition policy, cross-border services, sanitary and phytosanitary measures, technical barriers to trade, government procurement, intellectual property, labor and dispute settlement. The updated information has been uploaded to the APEC FTA database of the Convergence and Divergence Study at http://fta.apec.org
Regional Economic Integration (REI) and a Free Trade Area of the Asia Pacific (FTAAP)
Accelerating regional economic integration (REI) has been one of the key priorities for APEC since 2007 and this work is advanced mainly by Senior Officials, the CTI and its sub-groups. Two Trade Policy Dialogues (TPD) on a Free Trade Area of the Asia-Pacific (FTAAP) were held in 2009 to help members better understand the economic benefits and technical and policy implications of the establishment of an FTAAP. The trade policy dialogues covered: possible pathways to an FTAAP (for example, by docking and merging FTAs/RTAs based on APEC studies of the levels of convergence and divergence in FTAs between members); the "next generation" trade and investment issues that should go into a 21st century trade agreement; and the suggestion from the APEC Business Advisory Council that Senior Officials should start work on a timeline.
In response to Leaders and Ministers instructions in 2009 to intensify work on initiatives to promote greater convergences among economies in key areas of APEC’s REI agenda, a trade policy dialogue was held in May 2010 on investment and standards/technical barriers to trade (TBT). This trade policy dialogue contributed to the development of the Road Map on Investment through discussion of (i) the core elements in the work undertaken by the United Nations Conference on Trade and Development (UNCTAD); and (ii) findings of the Convergences/Divergences Study as possible contributions to the development of the APEC Investment Principles. The discussion on standards/technical barriers to trade was aimed at raising awareness of the gamut of methods in which overcoming Non-Tariff Measures (NTMs) could be facilitated. The need for better alignment of standards and increased understanding through regulator collaboration was emphasized.
In 2009, Korea led a study on the economic impact of a possible Free Trade Area of the Asia-Pacific (FTAAP) and identified specific benefits and challenges for APEC economies. To take forward the results of this study, the CTI endorsed a proposal on “Capacity Building Needs for Strengthening REI” which sought to conduct a survey primarily targeted at helping developing member economies identify their capacity building needs, including upgrading of negotiation skills, for establishing larger-scale FTAs/RTAs. Taking the outcomes of the survey analysis into consideration, the report recommended the development of detailed action plans and implementation of a tailor-made program for capacity-building in possibly cooperation with relevant international organizations, such as OECD, IDB, UNCTAD, ESCAP, WTO, and ADB to facilitate work process and maximize the effects. Consideration of these recommendations, including the development of an action plan, will be taken up by the CTI in 2011.
In 2010, APEC Leaders reaffirmed their commitment at their Yokohama meeting to pursue stronger and deeper Regional Economic Integration by addressing barriers to trade and investment and by taking concrete steps toward realization of a Free Trade Area of the Asia-Pacific (FTAAP). Leaders also agreed that “APEC will make an important and meaningful contribution as an incubator of an FTAAP by providing leadership and intellectual input into the process of its development, and by playing a critical role in defining, shaping, and addressing the ‘next generation’ trade and investment issues that FTAAP should contain” and that “APEC should contribute to the pursuit of an FTAAP by continuing and further developing its work on sectoral initiatives in such areas as investment; services; e-commerce; rules of origin; standards and conformance; trade facilitation; and environmental goods and services”.
In 2011, three “next generation trade and investment issues” were identified: (i) facilitating global supply chains; (ii) enhancing small and medium-sized enterprises (SMEs) participation in global production chains; and (iii) promoting effective, non-discriminatory, and market-driven innovation policy. APEC Leaders agreed to advance a set of policies to promote effective, non-discriminatory, and market-driven innovation policy to set a model for innovation in the region as the best path toward fostering innovations that will increase productivity and ensure economic growth. They also decided on areas of cooperation that could be included in trade agreements to enhance the participation of small and medium-sized enterprises (SMEs) in global production chains.
In 2012, APEC Leaders remained committed to addressing next generation trade and investment issues to further integrate APEC economies and expand trade throughout the region. They welcome addressing transparency as a new next generation trade and investment issue, and the endorsement of the APEC Model Chapter on Transparency for RTAs/FTAs to be used as a guide by APEC economies.