Concept for pact goes back to 2004
There’s no need to worry that the expected launch of work on a free trade zone would complicate the trade terrain in the Asia-Pacific. Instead, it would raise hopes for a solution of the current “spaghetti bowl” dilemma.
Attention has been focused on the prospect of establishing the Free Trade Area of the Asia-Pacific as a series of high-profile AsiaPacific Economic Cooperation meetings opened here this week. One of the meeting’s outcomes, China expects, will be the start of the FTAAPprocess.
Those who see the move as China’s challenge to the Trans-Pacific Partnership and anticipate diplomatic wrestling over it will find their speculations unfounded and unnecessary, observers say.
A free trade area has long been a common vision for APEC economies, not a product of China’s own wishful thinking.
The FTAAP is not a new idea, nor was it first brought to the table by China. China suggested a feasibility study on the FTAAP in February this year, but it was first proposed in 2004 and written into the declaration of the APEC leaders’ meeting in 2006.
An annual meeting of APEC trade ministers in May reiterated the resolution to draft a road map for the FTAAP to be finalized this year.
The idea gained traction as the region’s mushrooming free trade pacts resulted in growing complexity and costs for exporters and importers. Hosting the 2014 APEC meetings, China is determined to push for concrete steps on the FTAAP, showcasing its efforts to shoulder more international responsibility, as the country has been repeatedly urged to do.
The impasse in the Doha round of global multilateral trade talks gave impetus to a proliferation of smaller free trade agreements in the region. They brought some benefits but also unwanted troubles: different tariff schemes, complicated rules of origin and trade discrimination against countries excluded from the FTAs, to list a few.
Against that backdrop, APEC economies’ enthusiasm to integrate the varying and overlapping FTAs is understandable.
The TPP and the Regional Comprehensive Economic Partnership are also part of the efforts to disentangle the “spaghetti bowl”, but each of them involves only some of the region’s economies.