APEC recognises the important role Regional Trading Agreements (RTAs) and Free Trade Agreements (FTAs) can play in trade liberalisation in the APEC region.
In 2005 APEC Leaders included the promotion of high-quality RTAs and FTAs as an element of the
Busan Roadmap towards the Bogor Goals and committed APEC to developing model measures for commonly accepted FTA chapters.
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 TPDs 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 ABAC 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 TPD was held in May 2010 on investment and standards/technical barriers to trade (TBT). This TPD 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/TBT 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 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.
Discussions on the possible pathways to an FTAAP continue. In Yokohama last November, APEC Leaders reaffirmed their commitment to pursue stronger and deeper REI 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”.
At their meeting on 19-20 May 2011 in Big Sky, Montana, APEC Ministers Responsible for Trade reiterated their commitment to APEC’s core mission to strengthen and deepen regional economic integration and expand trade. They discussed practical, concrete, and meaningful actions that can be taken to fulfill the achievement of a FTAAP and identified the following ‘next generation’ trade and investment issues to be addressed in 2011 through substantive and specific outcomes: (i) facilitating global supply chains; (ii) enhancing small and medium-sized enterprises participation in global production chains; and (iii) promoting effective, non-discriminatory, and market-driven innovation policy.
Other related developments include:
Senior Officials have provided updates at each of their meetings on the most recent developments on FTAs/RTAs in the region.
The CTI has commenced working on a multi-year work plan to take forward the recommendations of the survey it conducted last year to identify capacity building needs for strengthening regional economic integration. A two-hour Policy Dialogue session was organized during CTI3 in September 2011 for members, ABAC and representatives from the Asian Development Bank and the World Bank to exchange information and experiences on improving members’ ability to engage in high-quality trade agreements. One of the outcomes from the session was a proposal to develop a multi-year action plan by SOM2/MRT in 2012 to take forward the REI Capacity Building Needs initiative.
On the Convergences and Divergences Study, the CTI continues to look into possible next steps to progressing the study, including updating of the existing chapters as well as improving the database, which served as a useful resource toolkit that enabled the comparison of the provisions of the 42 FTAs analyzed in the study.
Catherine WONG (Ms)
Program Director
APEC Secretariat
Email:
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