Globalization in a Digitized World

Physical, institutional, and people-to-people connectivity are instrumental for trade, and many initiatives have been put in place to advance it. However, connectivity is a means to an end — integration.

While APEC has long been at the forefront of facilitating a more integrated region, it must now look to the future. Globalization is set to deepen in an increasingly digitized world, where webs of interconnected companies specialize in different tasks, adding value to a final good of multiple origin. A new era of regional and global integration will emerge, dubbed Integration 4.0.

Next-generation Issues

Unlike the first generation of twentieth century tariff-centric reciprocal agreements, based on preferential treatment, this next generation calls for a new era of trade policy and regional integration, which aims to reduce frictions and facilitate movement at the border, across the border, and behind the border.

In this context, APEC will focus on the next generation issues related to trade facilitation, customs-coordination, border management automation, regulatory convergence, participation in global value chains, people and knowledge mobility, and investments in infrastructure.”

Breaking Barriers to Integration

APEC is well positioned to address barriers to achieving this integration, such as by showcasing best practices on trade procedures and regulations and to encourage coordinated approaches to ease trade between economies.

APEC in 2019 will therefore target the following outcomes:

• Enhancing APEC economies’ integration into global value chains
• Smart borders — with a focus on building trust in electronic single windows systems, which are an efficient and effective way of speeding up trade documentation at reduced cost
• Smart logistics — focusing on improving understanding of Authorized Economic Operator (AEO) programs. AEO programs speed up trade because businesses taking part are certified as showing their role in the international supply chain is secure and customs controls followed
• Smart trade — focusing on integrating Good Regulatory Practices as a model chapter of the FTAAP. APEC is working towards eventual realization of a Free Trade Area of the Asia Pacific (FTAAP)
• Enhancing skills mobility in the APEC region

What is the Free Trade Area of the Asia-Pacific?

Regional integration is essential to the eventual realization of the Free Trade Area of the Asia-Pacific (FTAAP), a major instrument to further APEC's regional economic integration agenda.

Leaders declared that it should be pursued as a comprehensive free trade agreement by developing and building on ongoing regional undertakings.

Origins and Future in Chile

“In the year APEC Chile 2004, the development of a free trade area for the entire Asia-Pacific region (FTAAP) was proposed, which would generate a great economic benefit by stimulating greater trade and investment among the members of the Forum. This idea was formally addressed by APEC Leaders—heads of government from each member economy of the Forum—as a long-term vision, having also identified other regional trade agreements, including the TPP (Trans-Pacific Partnership) and the RCEP (Regional Comprehensive Economic Association) as possible ways to achieve the FTAAP.