APEC still has a key role to play
But Regional Comprehensive Economic Partnership is making more substantive progress on integration
The 26th Asia-Pacific Economic Cooperation Summit was held in Port Moresby, the capital of Papua New Guinea, from Nov 17 to 18.
For a while now, tension has been building in regard to unilateralism versus protectionism, and those forces were in the spotlight at the summit. Under this umbrella, it is important to note that the majority of leaders at the APEC meeting insisted on supporting liberalization of trade and investment as well as open regionalism, and opposing protectionism.
If we look a bit closer, we can see that in the two years the United States has all but ignored multilateral organizations and mechanisms. Trump’s absence from this APEC meeting is another sign of his attitude.
The APEC Beijing summit in 2014 clearly stated the aim of establishing a Free Trade Area of the Asia-Pacific, and in the following two years, the collective strategy research for the FTAAP was completed. The key issue, however, lies in how to realize all the targets in motion. The working principle of APEC is basically based on trying to achieve common agreement among a membership functioning on free will. So in a group of 21 members, when the system is relatively weak, no wonder it is not easy to push forward the FTAAP.
At this year’s APEC meeting, many members voiced their advocacy of free trade and anti-protectionism, and reiterated open regionalism. And many tried to make progress in specific areas including tariff and nontariff measures, investment and so on. From this perspective, the course of APEC is positive and meaningful, but meanwhile there are some restrictions on the model. In terms of regional economic integration, more substantive progress will be seen in mechanisms other than APEC.
In the Asia-Pacific region, that could be the Regional Comprehensive Economic Partnership.
There are 16 countries participating in the RCEP, including 10 Association of South-East Asian Nations members and China, Japan, South Korea, India, Australia and New Zealand. After years of negotiations, there is already important progress, and all sides have expressed the will to conclude negotiations before the end of this year.
At present, the 16 countries have completed consultations in seven chapters. Nearly 80 percent of the negotiations have been completed, and breakthroughs have been made in some rulesbased chapters.
China holds a very positive view about the RCEP negotiations and is working hard to push forward the conclusion of an agreement by the end of this year, which is consistent with China’s deepening of reform and expansion of opening up.
But there are still some barriers to the RCEP negotiations. For example, lowering import tariffs is inevitable for reaching the agreement, but some countries are still against it. But even if the agreement could not be completed within this year, it is still very likely that the agreement will be reached in the near future, which will mark significant progress in the region’s economic integration.
Compared with APEC, the RCEP has seen more substantive progress.
That said, APEC still has an opportunity to push forward regional economic integration, such as building the APEC trade valueadded database. But progress might be small because it is not easy to coordinate with different economies based on their free will. Moreover, APEC could also play an important role by providing a platform for leaders of member economies to push forward bilateral diplomacy.