The Asia-Pacific Economic Cooperation (APEC) forum needs to hold aloft the flag of trade and investment liberalisation despite the fact that there remained scepticism about globalisation and protectionism has arisen in several member economies.
Vietnam’s former Deputy Prime Minister Vu Khoan, who was once Chairman of the APEC 2006 National Committee, made the recommendation while talking with reporters on the sidelines of the “Multi-Stakeholder Dialogue on APEC toward 2020 and Beyond” in Hanoi on May 16.
In 1994, APEC economic leaders convened in Bogor, Indonesia, where they fixed the deadline to realise the free and open trade and investment goals, known as the Bogor Goals, for developed member economies by 2010 and developing economies by 2020.
The Bogor Goals became an orientation for APEC cooperation until 2020 and were expected to turn APEC into a leading region in terms of trade and investment liberalisation. The goals have inspired APEC members to pursue their economic development targets through open trade and investment facilitation in the region.
In pursuance of the Bogor Goals over the past 23 years, APEC has obtained impressive achievements in trade and investment liberalisation. The Second-term Review of APEC’s Progress towards the Bogor Goals released in 2016 showed that the current level of trade and investment liberalisation, and open market has surpassed the level in 1994 when the Bogor Goals were laid out.
The Asia-Pacific region’s annual trade growth was 7.8 percent between 1994 and 2015, reaching 16.5 trillion USD in 2014, while the bloc’s inner trade value grew by four folds. Tariff on average had been slashed by half, from 11 percent in 1996 down to just 5 percent in 2015.
APEC’s trade liberalisation was also indicated by a rapid increase in the number of free trade agreements (FTA) and regional trade agreements (RTA). In other words, APEC became a catalyst for the establishment of many trade agreements. From 1996 to 2015, the number of FTAs/RTAs coming into force increased from 22 to 152, of which 62 deals were signed among APEC members.
However, APEC members are facing a wide range of challenges in realising the Bogor Goals on schedule as there are only three years left and the global economy has experienced various changes since 1994. The global economy has recovered slowly after the financial crisis in 2008 triggered sluggish trade growth in the region.
Khoan told reporters that the progress in tariff elimination is now hindered by protectionism and non-tariff barriers in several APEC member economies, especially in agriculture, obstructing the process of trade liberalisation and economic connectivity in the region. But, the common trend will overwhelm, he said, adding that if the whole APEC advocates trade liberalisation, protectionism will be pushed back.
Khoan forecast that in the future, APEC will have to rely upon three pillars, namely trade liberalisation, digital technology promotion and response to climate change. The pillars will support each other and help APEC uphold its role, he elaborated.
As the host of APEC Year 2017, Vietnam has included the acceleration of the Bogor Goals into the list of important priorities in the APEC agenda. The country has worked closely with other member economies to deploy initiatives in order to remove obstacles mentioned in the Second-term Review of APEC’s Progress towards the Bogor Goals.
These will be a solid foundation for APEC to build and shape its operation orientations after 2020, focusing on the broader goals of trade and investment liberalisation in a bid to effectively cope with emerging challenges such as innovative, inclusive and sustainable growth, and e-commerce, among others.
To help APEC consistently pursue the Bogor Goals, it requires the steady goodwill of APEC leaders as well as the trust and consensus from businesses, workers and people about the benefits offered by trade liberalisation, and most important, the driver of growth and stability proved over the past two decades.