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Executive summary

Asia-Pacific Economic co-operation (APEC) was established in 1989 to further enhance

economic growth and prosperity for the region APEC is the premier forum for facilitating

economic growth! co-operation! trade and in"estment in the Asia-Pacific region

APEC has #1 member countries! "i$! Australia! %runei! Canada! Chile! China! &ong'ong!

ndonesia! apan! *epublic of 'orea! +alaysia! +e,oco! ew .ealand! Paupa ew /uinea!

Peru! Philippines! *ussian 0ederation! ingapore! Chinese 2aipei! 2hailand! 3nited tates and

4ietnam 2hese #1 member countries account for 516 of the world7s population! about

percent of world /P! and about 59 percent of world trade it is also the most economically

dynamic region in the world ha"ing generated about :; percent of global economic growth in its

first 1; years

APEC is the only inter go"ernmental grouping in the world operating on the basis of non-binding

commitments! open dialogue and e

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CHAPTER 1

INTRODUCTION

INTRODUCTION

What is APEC?

0ormed in 1989! the Asia-Pacific Economic Cooperation (APEC) is a non-binding

forum established to promote economic growth and encourage free trade among

the Pacific-*im economies 2he #1 members of APEC account for appro,imately

percent of the world /ross omestic Product (/P)! 5 percent of world trade

and #: billion people n addition! the region is strategically important to the 3!

as B; percent of 3 e,ports are bound for APEC members 2he dynamism of the

APEC region is reflected in its rapid growth rates the annual a"erage growth rate

of APEC economies is : percent! compared to percent globally +oreo"er! the

purchasing power parity of APEC economies has tripled since organi$ation7s

inception

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MEMBER ECONOMIE

Australia %runei Canada Chinese 2aipei ndonesia apan *epublic of 'orea

+alaysia ew .ealand Philippines ingapore 2hailand 3nited tates &ong 'ong!

China China +e,ico Papua ew /uinea Chile Peru *ussia 4iet am &ow APEC

operates 3nli=e other international organi$ations! APEC does not produce trade

agreementsD instead! APEC facilitates discussion on economic integration +any of

the discussionsand indeed! the agenda set by APECinfluence the policy of

member economies! whose leaders consider APEC recommendations in de"eloping

domestic policy n fact! members are wor=ing on multilateral trade agreements!

li=e the 2rans Pacific Partnership (2PP) outside of APEC n this way! APEC

summits! li=e this year7s meeting in &onolulu! act as a place of mediation! where

leaders are free to e,press their ideas without the pressure to create an agreement

ABOUT THE REPORT

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Tit!e "# the stu$y% &2he present study is titled as 'A PRO(ECT REPORT

ON AIA&PACI)IC ECONOMIC CO&OPERATION *APEC+

PROB,EM AND PROPECT-.

O/0ective "# the stu$y%&2he following are the ob@ecti"e of the study

2o 3nderstand 2he goals of apec

2o measures the problems of apec

2o tudy challenges of apec

Peri"$ "# the stu$y%&2he period of the present study is from ?C2 #;1

,imitati"s "# the tu$y%&2he present study has got all the limitations of

e,planatory study method

Data a$ Meth"$"!"2y%&0or the purpose of the present study had referred

internet! boo=s! newspaper to collect information

CHAPTER 3

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PRO)I,E

PRO)I,E O) APEC

Asia&Paci#ic Ec""mic C""4erati"(APEC) is a forum for #1 Pacific

*immember economies that promotes trade throughout the Asia-Pacificregion t

was established in 1989 in response to the growing interdependence of Asia-Pacific

economies and the ad"ent of regional trade blocsin other parts of the worldD to

fears that highly industrialisedapan (a member of /8) would come to dominate

economic acti"ity in the Asia-Pacific regionD and to establish new mar=ets for

agricultural products and raw materials beyond Europe

An annual APEC Economic FeadersG +eeting is attended by the heads of

go"ernmentof all APEC members e,cept 2aiwan(which is represented by

a ministerial-le"el officialunder the name Chinese 2aipeias economic leader 2he

location of the meeting rotates annually among the member economies! and a

famous tradition! followed for most (but not all) summits! in"ol"es the attending

leaders dressing in a national costumeof the host country

https://en.wikipedia.org/wiki/Pacific_Rimhttps://en.wikipedia.org/wiki/Pacific_Rimhttps://en.wikipedia.org/wiki/Asia-Pacifichttps://en.wikipedia.org/wiki/Trade_blochttps://en.wikipedia.org/wiki/Developed_countryhttps://en.wikipedia.org/wiki/G8https://en.wikipedia.org/wiki/Heads_of_governmenthttps://en.wikipedia.org/wiki/Heads_of_governmenthttps://en.wikipedia.org/wiki/Taiwanhttps://en.wikipedia.org/wiki/List_of_Chinese_Taipei_Representatives_to_APEChttps://en.wikipedia.org/wiki/Chinese_Taipeihttps://en.wikipedia.org/wiki/National_costumehttps://en.wikipedia.org/wiki/Asia-Pacifichttps://en.wikipedia.org/wiki/Trade_blochttps://en.wikipedia.org/wiki/Developed_countryhttps://en.wikipedia.org/wiki/G8https://en.wikipedia.org/wiki/Heads_of_governmenthttps://en.wikipedia.org/wiki/Heads_of_governmenthttps://en.wikipedia.org/wiki/Taiwanhttps://en.wikipedia.org/wiki/List_of_Chinese_Taipei_Representatives_to_APEChttps://en.wikipedia.org/wiki/Chinese_Taipeihttps://en.wikipedia.org/wiki/National_costumehttps://en.wikipedia.org/wiki/Pacific_Rimhttps://en.wikipedia.org/wiki/Pacific_Rim

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5"a!s "# APEC

APEC7s mission is Hto create greater prosperity for the people of the regionI 2his

is done through cooperation that is balanced and "oluntary! which in turn spurs

economic growth 2he %ogor /oals! adopted in 1995! call for open and free trade

in the region by #;#; and are framed by three principles

J nternational 2rade and n"estment Fiberali$ation K wor=ing toward multilateral

trade agreements within APEC and e,panding with non-APEC members APEC is

committed to wor=ing within the current global framewor=! by aligning itself with

>orld 2rade ?rgani$ation principles

J %usiness 0acilitation K reducing administrati"e barriers to trade by streamlining

customs and standards 2hrough the 2rade 0acilitation Action Plan! APEC has

wor=ed to reduce the cost of business transactions

J Economic and 2echnical Cooperation K impro"ing human capital and building

infrastructure through education! study centers and the support of small and

medium enterprises 2he sharing and ad"ancement of technology is also a ma@or

part of APEC7s wor=

CRITICIM

APEC has been criticised for promoting free trade agreements that would trammel

national and local laws! which regulate and ensure labor rights! en"ironmental

protection and safe and affordable access to medicineAccording to the

organi$ation! it is Lthe premier forum for facilitating economic growth!

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cooperation! trade and in"estment in the Asia-Pacific regionL established to

Lfurther enhance economic growth and prosperity for the region and to strengthen

the Asia-Pacific communityLM&owe"er! whether it has accomplished anything

constructi"e remains debatable! especially from the "iewpoints of European

countries that cannot ta=e part in APEC and Pacific sland nations that cannot

participate but will suffer its conse

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n anuary 1989! Australian Prime +inister%ob &aw=ecalled for more effecti"e

economic cooperation across the Pacific *im region 2his led to the first meeting

of APEC in the Australiancapital of Canberrain o"ember! chaired by Australian

0oreign Affairs +inister/areth E"ans Attended by ministers from twel"e

countries! the meeting concluded with commitments for future annual meetings

in ingaporeand 'orea

Countries of the Association of outheast Asian ations(AEA) opposed the

initial proposal! instead proposing the East Asia Economic Caucuswhich would

e,clude non-Asian countries such as the 3nited tates! Canada! Australia!

andew .ealand 2his plan was opposed and strongly criticised by apanand the

3nited tates

2he first APEC Economic FeadersG +eeting occurred in 199 when 3

President%ill Clinton! after discussions with Australian Prime +inister Paul

'eating! in"ited the heads of go"ernmentfrom member economies to a summit

on %la=e sland &e belie"ed it would help bring the stalled 3ruguay *oundof

trade tal=s bac= on trac= At the meeting! some leaders called for continued

reduction of barriers to trade and in"estment! en"isioning a community in the Asia-

Pacific region that might promote prosperity through cooperation 2he APEC

https://en.wikipedia.org/wiki/Prime_Minister_of_Australiahttps://en.wikipedia.org/wiki/Bob_Hawkehttps://en.wikipedia.org/wiki/Australiahttps://en.wikipedia.org/wiki/Canberrahttps://en.wikipedia.org/wiki/Minister_for_Foreign_Affairs_(Australia)https://en.wikipedia.org/wiki/Minister_for_Foreign_Affairs_(Australia)https://en.wikipedia.org/wiki/Gareth_Evans_(politician)https://en.wikipedia.org/wiki/Singaporehttps://en.wikipedia.org/wiki/Koreahttps://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttps://en.wikipedia.org/wiki/East_Asia_Economic_Caucushttps://en.wikipedia.org/wiki/United_Stateshttps://en.wikipedia.org/wiki/Canadahttps://en.wikipedia.org/wiki/Australiahttps://en.wikipedia.org/wiki/New_Zealandhttps://en.wikipedia.org/wiki/Japanhttps://en.wikipedia.org/wiki/President_of_the_United_Stateshttps://en.wikipedia.org/wiki/President_of_the_United_Stateshttps://en.wikipedia.org/wiki/Bill_Clintonhttps://en.wikipedia.org/wiki/Paul_Keatinghttps://en.wikipedia.org/wiki/Paul_Keatinghttps://en.wikipedia.org/wiki/Heads_of_governmenthttps://en.wikipedia.org/wiki/Blake_Islandhttps://en.wikipedia.org/wiki/Uruguay_Roundhttps://en.wikipedia.org/wiki/Prime_Minister_of_Australiahttps://en.wikipedia.org/wiki/Bob_Hawkehttps://en.wikipedia.org/wiki/Australiahttps://en.wikipedia.org/wiki/Canberrahttps://en.wikipedia.org/wiki/Minister_for_Foreign_Affairs_(Australia)https://en.wikipedia.org/wiki/Minister_for_Foreign_Affairs_(Australia)https://en.wikipedia.org/wiki/Gareth_Evans_(politician)https://en.wikipedia.org/wiki/Singaporehttps://en.wikipedia.org/wiki/Koreahttps://en.wikipedia.org/wiki/Association_of_Southeast_Asian_Nationshttps://en.wikipedia.org/wiki/East_Asia_Economic_Caucushttps://en.wikipedia.org/wiki/United_Stateshttps://en.wikipedia.org/wiki/Canadahttps://en.wikipedia.org/wiki/Australiahttps://en.wikipedia.org/wiki/New_Zealandhttps://en.wikipedia.org/wiki/Japanhttps://en.wikipedia.org/wiki/President_of_the_United_Stateshttps://en.wikipedia.org/wiki/President_of_the_United_Stateshttps://en.wikipedia.org/wiki/Bill_Clintonhttps://en.wikipedia.org/wiki/Paul_Keatinghttps://en.wikipedia.org/wiki/Paul_Keatinghttps://en.wikipedia.org/wiki/Heads_of_governmenthttps://en.wikipedia.org/wiki/Blake_Islandhttps://en.wikipedia.org/wiki/Uruguay_Round

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ecretariat! based in ingapore! was established to coordinate the acti"ities of the

organisation

uring the meeting in 1995 in %ogor! ndonesia! APEC leaders adopted the %ogor

/oals that aim for free and open trade and in"estment in the Asia-Pacific by #;1;

for industrialised economies and by #;#; for de"eloping economies n 199!

APEC established a business ad"isory body named the APEC %usiness Ad"isory

Council (A%AC)! composed of three business e,ecuti"es from each member

economy

n April #;;1! the APEC! in collaboration with fi"e other international

organisations (Eurostat! EA! ?FAE! ?PEC and the 3) launched the oint

?il ata E,ercise! which became rapidely the oint ?rgani$ation ata nitiati"e

(?)

https://en.wikipedia.org/wiki/Bogorhttps://en.wikipedia.org/wiki/Indonesiahttps://en.wikipedia.org/wiki/Joint_Organization_Data_Initiative_(JODI)https://en.wikipedia.org/wiki/Joint_Organization_Data_Initiative_(JODI)https://en.wikipedia.org/wiki/Bogorhttps://en.wikipedia.org/wiki/Indonesiahttps://en.wikipedia.org/wiki/Joint_Organization_Data_Initiative_(JODI)https://en.wikipedia.org/wiki/Joint_Organization_Data_Initiative_(JODI)

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CHAPTER 8

THEORATICA, 9IEW

CURRENT ACHI9EMENT

Current Achie"ements in APEC t may be true that no spectacular announcement

has come out of APEC after the +anila Action Plan for APEC (+APA) in 199B

%ut this might be because the onset of the financial turned economic crisis that

started with 2hailand in uly 199: had a lot to do with it ot counting the

+alaysia year of the APEC ummit in 1998! APEC tried to get bac= to serious

business of free trade and competition during the ew .ealand year of APEC

ummit in 1999 Again the political e"ent in East 2imor had stolen the thunder

from APEC 2he +illennium APEC ummit in %runei was a relati"ely

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least from the point of "iew of the general public who hear the news from most

news media)! one is to say that it supports the oha e"elopment *ound of

multilateral trade negotiations! and the other is that it supports the counter-

terrorism mo"es led by the 3

2o be fair! APEC has done more than these two things %elow are some of the

latest de"elopments from "arious fora in APEC

(1) ince #;;1! APEC +inisters ha"e agreed to adopt the NPathfinder nitiati"es7 in

the hanghai Accord whereby members who are ready to mo"e closer to the %ogor

/oals can do so under the APEC principles of "oluntarism! comprehensi"eness!

consensus-based decision-ma=ing! fle,ibility! transparency! open regionalism and

differentiated timetables for de"eloped and de"eloping economies

(#) 2he hanghai Accord also included pro"isions on trade facilitations where

members ha"e agreed to wor= towards reducing transaction costs in trade by per

cent across the APEC region by #;;B 2hese pro"isions later became the APEC

2rade 0acilitation Plan (20AP) in #;;# imilarly! the APEC 2ransparency

tandards were adopted in #;; that ha"e strengthened the facilitation aspects of

APEC

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() APEC tructural *eform Action Plan was discussed in Chile in #;;5! which!

once completed! should greatly enhance trade and in"estment in the region

Agreement has been reached where 2rade Policy ialogue on a =ey priority related

to trade and in"estment (impediments and solutions) will be held in ?+ in

#;;

(5) n Chile in #;;5! two more interesting outcomes were achie"ed ?ne is the

formal inclusion of the issues of *egional 2rading Arrangements (*2As) and 0ree

2rade Agreements (02As) in the APEC region in the APEC agenda for the first

time! and the other is the highlighting of the transparency and anti-corruption

aspects of the APEC trade

() ?n EC?2EC& issues! APEC members ha"e agreed to upgrade the designation

of the EC?2EC& ubcommittee to EC?2EC& Committee (while retaining the

acronym EC and the original mandate) 2he EC has also opened up the channel

in which se"eral international financial institutions (0s)! especially the >orld

%an= and Asian e"elopment %an=! could wor= with APEC through the EC

(B) ?ther APEC fora ha"e continued their acti"e participation on APEC matters

2he APEC %usiness Ad"isory Council (A%AC) continues to support the Pathfinder

nitiati"es! the reduction in transaction cost! the APEC 2ransparency Principles and

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Corporate /ood /o"ernance e"eral APEC >or=ing /roups ha"e en@oyed se"eral

new acti"ities in the post-crisis situations in the APEC region.

2here are many more detailed acti"ities that can be classified as achie"ements in

APEC! particularly in such collecti"e action plans as standards and conformance!

customs procedures! competition policy and deregulation! go"ernment

procurement! and mobility of business people! but these achie"ements may not be

sufficient to play a ma@or role! or be a ma@or factor to mo"e APEC closer to the

%ogor /oals of free trade and in"estment in the Asia Pacific region by #;1; and

#;#; t is the bigger

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reform! product reform! and financial reform! that should bring about its lost

competiti"eness! and return APEC to a better position to fulfil its promise and to

restore dynamism and confidence to the Asia Pacific region # 2hese recommended

reforms are still "alid today

E:PECTED CHAN5E )OR THE BETTER

%ased on my personal obser"ation! my research! and my personal e,perience

wor=ing inside the APEC process for a few years! belie"e that there are many

more changes beyond what APA has recommended that can bring about better

and more progressi"e APEC n #;;! 'orea has adopted the need for change as

one of its thematic focus n this paper! want to concentrate on the following fi"e

areas

5reater C"cetrati" " )ree Tra$e a$ Ivestmet A2e$a

ha"e noticed that the enthusiasm in the aftermath of the success in the

nformation 2echnology Agreement at the end of 199B was "ery per"asi"e

Although this agreement came under the auspices and @urisdiction of the >orld

2rade ?rganisation! it was well =nown that the APEC Feaders7 decision to support

this had played a "ery important and decisi"e role in its being accepted at the first

>2? +inisterial +eeting in ingapore in ecember 199B o wonder this

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enthusiasm had o"erflowed onto 199:! and partly resulted in the creation of E4F

f the crisis did not brea= out in 199: in East Asia! perhaps the E4F could ha"e a

better chance of success %ut! in the end! it would not be the East Asian crisis had

put APEC in the doldrums 2he debacle and failure to reach any agreement in the

ne,t >2? +inisterial +eeting in eattle in 1999 could ha"e heightened the

posture of APEC as the ma@or pro free trade forum in e,istence then! but APEC

could not ma=e use of this opportunity as a result of the continuing crisis in its East

Asia and indeed later in *ussia and Fatin America 2hen came the e"ent of

eptember 11! #;;1 that forced the change in APEC7s focus for the remainder of

#;;1 2he APEC ummit in hanghai was dominated by the counterterrorism

agenda! which stayed on for the ne,t two years until #;; East Asia was again

buffeted with another crisis in #;;! but this time! it was the health crisis! the

e"ere Acute *espiratory yndrome or A* ow two powerful e"ents! security

and health! ha"e caused the di"ersion of interests within APEC away from its

traditional focus and concentration on global trade and in"estment issues ot that

these issues were not important they were %ut! the trade-off in time and energy

away from international trade and in"estment had wea=ened the mission of APEC

%y transforming APEC into an allencompassing forum that deals with any world

e"ents that some APEC leaders would li=e to bring into the attention of APEC has

ser"ed to dilute the focus and concentration on its intended role in regional and

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global trade and in"estment 5 o! while leaders of the APEC economies are

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More Realistic Acceptance of RTAs/FTAs in the

APEC Context

%ut e"en with global trade and in"estment focus! the nature and characteristics of

today7s trade and in"estment ha"e changed drastically in the last se"eral years

Perhaps as a result of the failure or lac= of progress of the >2?-sponsored new

round of multilateral trade negotiations! many APEC members ha"e realised that

they could no longer wait for the successful conclusion of this >2? new round of

trade negotiations 2hey need to mo"e ine,orably forward as their li"es depend on

world open trade systems o! these outward-loo=ing APEC members started to

enter into bilateral trade deals with li=eminded members within as well as outside

APEC in the rapidly growing free trade agreements (02As) >ith the support the

3 and apan! two largest members of APEC who ha"e swung from

multilateralism only to bilateralism along with multilateralism! the mo"ements

towards increased bilateral 02As in APEC along its traditional support of >2?-

typed multilateral trade agreements and APEC-own open regionalism seem

unstoppable

Fiterature abounds on the pros and cons of multilateral trading arrangements

"ersus bilateral trading arrangements 0indlay (#;;1)! for e,ample! sums up the

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(EC?2EC&) among APEC members Although such interests were shown much

earlier in the APEC process! 9 it was not until APEC members had agreed to set up

the EC?2EC&

ubcommittee (EC) in 199: that EC?2EC& acti"ities got started in earnest After

a couple of years! the EC had found its handles on how to ad"ance its EC?2EC&

agenda! and as mentioned earlier! the China year of APEC ummit in #;;1 could

be considered the most successful year for EC?2EC& in APEC 2here are many

changes and de"elopments that could be called successful outcomes of EC?2EC&

at the end of #;;1 2he followings are some of such outcomes

Huma Ca4acity Bui!$i2 E##"rts

&uman resources de"elopment and human capacity building ha"e become one of

the most important! if not the most important! topics in EC?2EC& acti"ities since

1998 2he interest in human resources de"elopment (&*) was also manifested in

the freor=ing /roup as well as the number of

pro@ects underta=en by economies and APEC fora during these periods 11 As

mentioned earlier! in #;;; and #;;1! %runei and China had @oined force to promote

the APEC acti"ities on human capacity building 2he %ei@ing nitiati"es on &uman

Capacity %uilding has become a policy statement of APEC that aims at increase

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the ability and capability of de"eloping members of APEC to catch up with their

more de"eloped members! and for the latter to share best practices on human

resources de"elopment with their less de"eloped partners

O4erati" "# APEC

2he APEC secretariat is based in ingapore and it operates as the core support

mechanism for the APEC process t pro"ides co-ordination! technical and

ad"isory support as well as information management! communications and public

outreach ser"ices

2he APEC secretariat performs a central pro@ect management role! assisting APEC

+ember Economics and APEC for a with o"erseeing more than #; APEC funded

pro@ects APEC7s annual budget is also administered by the APEC secretariat

2he APEC secretariat is headed by an e,ecuti"e irector and a eputy E,ecuti"e

irector 2hese positions are filled by officers of Ambassadorial ran= from the

current and incoming host economics respecti"ely 2he positions rotate annually

2he APEC secretariat is staffed by a small team of ## Program irectors n

addition around d #: permanent staff fulfill specialist and support functions at the

APEC secretariat ts head

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Achievemet a$ Bee#its

Ec""mic 5r"6th% ince its inception in 1989! the APEC region has been the

most economically dynamic part of the world uring its first decade! APEC

member countries generated about :; percent of global economic growth

APEC member economies wor= together to sustain this economic growth through

a commitment to open trade! in"estment and economic reform %y progressi"ely

reducing tariffs and other barriers to trade APEC member economies ha"e

become more efficient and e,ports ha"e e,panded substantially

A Hi2h!i2ht "# APEC;s Achievemet i the )irst Te 7ears

2he mportant achie"ements of APEC during the first 1; years are

(i) E,ports increased by 11 percent to o"er 3 Q # trillion

(ii) 0oreign direct in"estment grew by #1; percent o"erall! and by 5: percent

in lower income APEC countries

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(iii) *eal gross national product grow by about a third o"erall! and by :5 percent

in lower income APEC economies

(i") /ross domestic product per person in lower income APEC economies grew

by B1 percent

Bee#its t" the 4e"4!e i APEC Re2i" Consumers in Asia-Pacific ha"e both

directly and indirectly benefited from the collecti"e and indi"idual actions of

APEC member countries mportant direct benefits are increased @ob

opportunities! more training programmes! stronger social safety nets and po"erty

alle"iation %roadly APEC member countries on a"erage en@oy lower cost of

li"ing since reduced trade barriers and a more economically competiti"e region led

to lowering of prices of goods and ser"ices that e"eryone needs daily

Im4r"vemets i I#"rmati" a$ Te!ec"mmuicati"s n 199;! an a"erage of

only ;B6 of those li"ing in APEC member countries were cellular subscribers and

only ;;8 percent used internet >ithin a space of 1 years those figures rose to

percent and ; percent! respecti"ely ince 199;! APEC has been committed to

facilitating de"elopment of an information infrastructure across Asia-Pacific

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Bee#its t" ,"6 Ic"me APEC C"utries Economic growth leads to social

ad"ancement uring the first decade of APEC7s e,istence the low income APEC

countries had the following benefits

(i) 2he 3nited ations e"elopment Programme (3P) &uman

e"elopment nde, for lower income APEC countries impro"ed by about

18 percent

(ii) Po"erty in East Asian APEC countries has fallen by about a third (1B

million people)! mostly on account of strong economic growth

(iii) About 19 million new @obs ha"e been created in APEC member

countries! including 1:5 million in lower income countries

(i") nfant mortality has fallen and life e,pectancy has impro"ed in lower

income APEC countries on account of significant impro"ement in access

to sanitation and safe water! and e,panding public e,penditure on health

(") 2here has been hea"y in"estment in human capital with rising education

enrolment ratios and growth e,penditures on education

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PROB,EM )ACE B7 APEC%

t was hard to imagine that only less than ten years after its creation in 1989!

APEC would face a pertinent hither APEC #;;problems and prospects of APEC

!halfweay through %?/?* goals by +edhi 'rong=aew p 1)2he ad"ent of the

GinformalG Economic Feaders +eeting in 199 by the 3 in eattle had gi"en

APEC its international profile that challenges the annual /-: world economic

leaders meeting

2his was followed by the %ogor /oals in 1995! the ?sa=a Action Agenda in 199!

and the +anila Action Plan in 199B %y then! in 199! the >orld 2rade

?rganisation (>2?) has come into being! with its first impressi"e success on

global nformation 2echnology Agreements (2A) at the end of 199B %ut e"en

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with this first success of the >2?! it is hard to see that this has in any significant

way diminished the importance and promise of APEC And it should not be! as the

o"erall tone of the boo= was that there was still good future ahead of APEC ow

in #;;! this same

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MA(OR PROB,EM )ACED B7 APEC INCE )ORMATION

2he world is a global and social one that can bring cooperation among members of

the society irrespecti"e their indifferences that range from political! economy!

religious! culture and traditions to name a few

2herefore member countries in the Asia and Pacific thought it wise to form an

economic cooperation with the general aim of Hpromoting world tradeID H reduce

trade barrierI! open Hin"estment opportunitiesI! ease the He,change of goodsI!

ser"ices! resources and technical =now-how! and Hstrengthen economic and

technical cooperation Hamong its members

2hus! this brought about the formation of the Asia-Pacific Economic cooperation!

(APEC)! with the sole aim of fostering economic ties and cooperation among its

members

As the name implied it is a regional cooperation that comprise of 9;6 Asian

countries economies and also 1;6 of other members within the Pacific region

APEC member-economies include the ma@or economies of the region and the most

dynamic and fastest-growing economies in the world 2he #1 economies together

constitute more than half of the worldGs annual output and almost half of the

worldGs total merchandise trade! this is seen by many critics and economics as

threat to non-02A membersI+aybe APEC is too large! too di"erse tGs different

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from the European Community which can deepen cooperation because the

countries ha"e a real historical identity!L says 2hai political scientist Prapas

2hepchatri LGm afraid APEC has no identity! no "ision to mo"e forward to

become whatO An Asian-Pacific communityO 2hatGs maybe too abstractL

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APEC CHA,,EN5E

n spite the contributions of APEC to the economic de"elopment and

sustainability of the Pacific *im! it is also confronted by a number of

challenges 2his calls for continued initiati"es in order to impro"e the

economic situation and to be able to help the organi$ation establish a

brighter economic condition in the future ?ne of the challenges identified to

confront the organi$ation is on how it is going to manage globali$ation as

such is seen to ha"e a significant effect on its member countries 2he

organi$ation is also facing the challenge of how it will be able to effecti"ely

manage regional and bilateral free trade agreements which is "ery critical in

the trading acti"ities of member countries

Another challenge which should be o"ercome by APEC is its initiati"e to be

able to create a free and open trading to its region 3ntil now! efforts to be

able to help achie"e such ob@ecti"e are seen to ha"e remained ill defined

2here is a need for APEC to reali$e that it needs modifications with regards

to agenda-setting mechanism and procedures 2he organi$ation would need

to set it eyes towards goals for the longer years and bring the goals into

reality such as the achie"ement of free trade 2his year! APEC faces a greater challenge as the deadline is already set for

the achie"ement of the %ogor goals! which is the establishment of free trade

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2his is apart from other challenges which will confront the organi$ation in

succeeding years such as the threat from protectionism and lac= of trust on

financial institutions 2o be able to reco"er from the financial crisis which

hit the economy in the pre"ious years! there is a great challenge not only to

attract dynamic in"estments to boost the economic situation on the Pacific

but also to bring bac= the trust into institutions of finance %y this way! it is

ac=nowledged that a better business will be on its way 0urthermore! the

member countries are also challenged to be able to impro"e its current

standings on the >orld %an=Gs Ease of oing %usiness nde, 2hrough this!

it is anticipated that more in"estments will come in as a means of impro"ing

financial condition e"eral APEC economies are already included in the top

fi"e an din the top twenty of the list which is a good indication of the fruitful

years to come for the region A challenge is also posed to address the

growing disparities between the urban and rural regions especially with

regards to le"els of education! social inclusion! and health care pro"ision

CHAPTER