APEC economies continue to strengthen but their growth and more equitable distribution of the benefits hinge on the fate of market openness and integration in the Asia-Pacific, according to the latest APEC Regional Trends Analysis.
Growth in the APEC region, which accounts for half of global trade and 60 per cent of world GDP, jumped from 3.4 per cent to 4.1 per cent year-on-year in 2017, the report reveals. It is forecast to remain at this level in 2018 before consolidating to 4.0 per cent in 2019, though a rise in trade-restrictive measures is an increasing cause for concern.
Boosting APEC economies are domestic consumption and a significant trade turnaround, with the value of merchandise exports in the region having grown 10.2 per cent in 2017 after contracting 3.9 per cent in 2016. APEC economies’ volume of merchandise exports grew at 4.9 per cent in 2017 while their trade in commercial services grew more than 5 per cent for the year.
“Business and employment prospects in the region are more favorable now thanks to higher trade growth, driven by a solid global economy, but could backslide without proper care,” cautioned Dr Denis Hew, Director of the APEC Policy Support Unit, which produced the report.
“APEC economies must go further to build new economic drivers if they are to sustain their momentum,” Dr Hew added (Video: Dr Denis Hew on APEC Trade and Economic Outlook). “The introduction of policies that facilitate rather than restrict next generation trade and investment in the Asia-Pacific is in everybody’s best interest.”
The report details the challenges that protectionism pose to the realization of more inclusive and sustainable APEC economies, and recommends widening economic participation by harnessing emerging opportunities in the digital space as a more effective alternative.
It points to the potential for greater coordination in APEC to seek out, help implement and align innovative policy solutions. This includes deepening technical consultations to raise capacity for new trade agreements and policy approaches that promote job creation and better living standards in all parts of the region.
“Actions that enable more people to access growing economic opportunities will be key to keeping Asia-Pacific growth robust and inclusive in the medium to long-term,” explained Emmanuel San Andres, an analyst with the APEC Policy Support Unit and the report’s lead researcher.
“Buoyant economic conditions are creating a window for APEC economies to address priorities such as connectivity and education and skills training that can open up digitally-driven trade and investment,” San Andres added (Video: San Andres on Trade and Inclusive Growth Policy).
The report helps to set the tone for the APEC Ministers Responsible for Trade Meeting in Port Moresby, Papua New Guinea on 25-26 May to work out policy differences and areas of consensus on securing higher growth that improves more people’s lives across the region.
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