Sunday, November 15, 2009

APEC Ministers Reach Consensus for Establishment of Asia-Pacific Free Trade Zone

At the end of two days of discussion, Asia-Pacific Economic Cooperation (APEC) economic and foreign ministers have agreed on the establishment of the Asia-Pacific free trade zone as a long-term goal. APEC ministers have directed their respective officials to do further research on the Asia-Pacific free trade zone proposal and to present report at next year's APEC Ministerial Meeting. While this is a long-term goal, but when APEC economies, with total trade accounted for 44 percent world trade achieves this goal, APEC will be recognized as the world's most dynamic economies in the Asia-Pacific region. By then the 21 APEC economies that have a total population of 2.6 billion can further advance in trade and economic growth.

Joint Statement
At the end of the two day APEC Ministerial Meeting, APEC ministers issued a joint statement stating that the in the past one year, APEC officials carried out in-depth analysis on the possible impact for the establishment of the Asia-Pacific free trade zone. They also studied the potential economic benefits and challenges that came with it. They also researched into the similarities and differences of the many free trade agreements that existed in the region.
The next step for APEC ministers to do is for APEC officers to follow the instructions of APEC ministers and take the Asia-Pacific free trade zone proposal one step forward by carrying out discussions to explore a variety possible approach to achieve this goal.

Free Trade Zone
Singapore's Foreign Affairs Minister George Yeo and Trade and Industry Minister Lim Hng Kiang, who is also the chair for the APEC Ministerial Meeting said that although APEC's non-binding principle has prevented APEC to make a final decision on how the Asia-Pacific Free Trade Zone should finally shape up, but the process of globalization and trade liberalization were like rivers flowing into the ocean and slowing leading APEC economies to the destination to achieve its goal in the formation of the Asia-Pacific free trade zone.

WTO Doha Round Negotiations
To achieve the goal of this Asia Pacific free trade zone is the hope of many business enterprises. In addition, APEC's target to setup this Asia-Pacific free trade zone will also help to play an active role in promoting and vitalizing the World Trade Organization (WTO) Doha Round negotiations again.
However, Singapore Trade Minister Lim Hng Kiang reminded APEC economies that the formation of this APEC free trade zone is a very huge engineering project. He said that if APEC tried to push such a free trade zone concept too aggressively, it would undermine the unique characteristic of APEC whereby all APEC economies could carry out its work in a friendly environment based the traditional principle that all APEC economies were not bound to carry out responsibility in an obligated manner. Lim opined that hastiness in trying to achieve this free trade goal might in the end work against its speedy formation. \
He said: "Therefore, this free trade zone project is still in the working stage. More importantly, the region must work towards the ultimate reduction of tariffs and improving business regulations. It is crucial to make progress in these specific plans."

Wide Range of Other Issues
In addition to the adoption of the Asia-Pacific free trade zone, the APEC ministerial joint statement also touched on a wide range of other issues, including a call for all APEC members to open up trade in environmental goods and services; to counter the challenges of global warming, which is considered one of the greatest challenges in the world today, and thus contributing to part of the world effort to attain sustainable growth. In addition, at the APEC ministerial joint statement, APEC ministers also expressed their concern that some individual economies had undermined the process of trade liberalization and allowed their trade policy to contain protectionism color in response to the unusually severe economic crisis.
Trade Minister Lim Hng Kiang pointed out that due to the fact that APEC economies had to respond to the rise of unemployment rate in their respective countries, trade restriction policies still exist in some APEC member nations. Lim said all APEC economies must keep vigilant against adopting trade protection measures in their countries.
"More importantly, we need to come out with a mechanism to remove trade protection barrier to ensure that even if such trade protectionism measures are only taken as temporary measures to cope with the current economic crisis. APEC members must have a clear-cut step so that when economic condition turns normal later, they can consider how to abolish such trade restriction policy."
Theme of 2010 Summit
Japan's Foreign Affairs Minister Katsuya Okada also introduced to APEC ministers the theme of the 2010 APEC hosted by Japan. The theme of next year's APEC is called 'Change and Action'. APEC 2010 will continue to push forward what the APEC ministers have achieved in this year. It will aim to pinpoint the two elements of inclusiveness and sustainability in order to achieve economic growth. Another major focus of the APEC meetings at 2010 APEC will be the so-called Bogor Goals, as 2010 is the deadline for the developed members of the Asia-Pacific region to achieve the targets of free trade and investment.
APEC finance ministers also ended their meeting yesterday. They also issued a joint statement pointing out the need for APEC countries to cope with the market demand that would shift from the United States to other economies with global economic recovery. APEC finance ministers also said APEC economies should carry out structural reforms, and should not be hasty in the abolition of the respective economic stimulus package introduced by APEC governments.
The end of the APEC Ministerial Meeting leads to two day APEC Leaders Meeting so that all the different resolutions discussed during the ministerial meeting can have the highest political commitment and endorsement. Next year's APEC meeting will be held in the Japanese port city of Yokohama.

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