The proposal for a regional free trade agreement is the oldest idea for promoting mutually beneficial Asia-Pacific regional cooperation. A Japanese economist Kiyoshi Kojima is usually credited for first mooting such Pacific free trade agreement concept in 1966. While that initial proposal seemed premature and unrealistic at the time, it enhanced awareness about the existing regional interdependencies and potentials for increased benefit through cooperation, eventually leading to the establishment of the Pacific Economic Cooperation Council (PECC) and subsequently to the APEC process.
In more recent times, economist C. Fred Bergsten has been at the forefront as an advocate of a Free Trade Agreement of the Asia-Pacific. His paper, prepared as part of this study, provides a most comprehensive and forceful statement in favor of an FTAAP. One of the most direct and comprehensive rebuttals to such perspective comes from a political scientist, Vinod Aggarwal. Based on an analysis of the American political economy, Dr. Aggarwal argues that selective liberalization through sectoral and bilateral trade agreements has rewarded freer trade interests, but left trade policy dominated by protectionist interests.
RELATED SPEECHES & STATEMENTS
"APEC has always been forward-thinking. APEC Leaders alluded to a vision for a Free Trade Area of the Asia Pacific, or FTAAP, as early as 2004 (in Chile). This was in response to suggestions from APEC’s business arm, the APEC Business Advisory Council, who foresaw benefits of such a large FTA. In 2010 (in Japan), APEC Leaders concretised the vision by outlining “pathways to FTAAP”. Already then, they envisioned the FTAAP to be a comprehensive, high quality agreement, developed and built on ongoing regional undertakings, which address “next generation” trade and investment issues. [...] we must ensure that our current agreements are of the highest quality possible. Regional architectures like the ASEAN Economic Community (AEC), the Pacific Alliance, the RCEP, and the TPP are all mutually reinforcing pathways to the FTAAP. These pathways must be of high-standard to lead to a credible and meaningful FTAAP."
Opening remarks delivered by Minister for Trade and Industry of Singapore, Lim Hng Kiang (PECC Singapore conference: New Priorities of Regional Economic Integration - Mandate for APEC | Singapore | February 10-11, 2014)
"APEC announced in 2006 that it would examine the long-term prospect of an FTAAP. [...] Based on the results of this work, we have agreed that now is the time for APEC to translate FTAAP from an aspirational to a more concrete vision. To that end, we instruct APEC to take concrete steps toward realization of an FTAAP, which is a major instrument to further APEC's Regional Economic Integration (REI) agenda. Further, an FTAAP should do more than achieve liberalization in its narrow sense; it should be comprehensive, high quality and incorporate and address "next generation" trade and investment issues.
We believe that an FTAAP should be pursued as a comprehensive free trade agreement by developing and building on ongoing regional undertakings, such as ASEAN+3, ASEAN+6, and the Trans-Pacific Partnership, among others. To this end, APEC will make an important and meaningful contribution as an incubator of an FTAAP by providing leadership and intellectual input into the process of its development, and by playing a critical role in defining, shaping and addressing the "next generation" trade and investment issues that an FTAAP should contain."
APEC Leaders' Declaration (Yokohama, Japan | November 2010)
RELATED PECC PROJECTS
The one-day workshop on Free Trade in the Asia-Pacific was held on September 8, 2014 in Beijing, China. (For the list of speakers and program agenda, click on the link)
In 2010, after 3 years of internal study and debate by officials and ministers, APEC leaders committed to taking ‘concrete steps toward realization of a Free Trade Area of the Asia-Pacific (FTAAP)”. They have also stated that ‘An FTAAP should be pursued as a comprehensive free trade agreement by developing and building on ongoing regional undertakings, such as ASEAN+3, ASEAN+6, and the Trans-Pacific Partnership, among others.’ China, as the host for APEC has chosen the goal of advancing regional economic integration as one of its major themes for 2014.
The purpose of this workshop is to discuss the current literature on global value chains and regional trade agreements and how these might inform the future development of an FTAAP.
CNCPEC has organized a two-day symposium on the regional economic integration to conduct a comprehensive stocktaking of the various ongoing FTAs in the Asia-Pacific region. With contributions from several other PECC member committees, the speakers at the symposium compared the various regional trade arrangements, especially the "mega-RTAs," revisited the strategies of the region's active players, and touched upon the convergence theme, going over questions on how we could achieve an FTAAP, how the Asia-Pacific as a region can contribute to the WTO, and how APEC could play a better role in promoting the convergence.
The 28th Pacific Economic Community Seminar: “TPP and RCEP: Emerging Dual-Track Pathways towards FTAAP” was held on November 13-14, 2013 in Taipei. (For the list of speakers and program agenda, click on the link)
The most recent crisis had serious impacts on the world economy through the channel of trade. We believe that economic integration with freer trade would help create a healthier business environment by eliminating protectionism in many possible ways. After all, REI is able to provide the much needed recovery momentum. However, there still exist many political and economic challenges limiting the progress of REI.
Protectionism in many forms seems revived at bad times, and transaction costs hindering the development of healthy business environment increased. The regional economic integration (REI) aiming at reducing or eliminating unnecessary economic barriers has been proposed, such as the initiative of FTAAP and initiatives in progress such as the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP). Are these two tracks in competition or are they complementary? How can the potential gains from TPP and RCEP be maximized? What effect do these two tracks have on non-members as well as the participating members? These were some of the questions addressed at the seminar. International experts from Australia, Chile, China, Indonesia, Japan, Korea, New Zealand, Singapore, and Thailand shared their views and exchanged ideas with Chinese Taipei counterparts.
An APEC Trade Agenda? The Political Economy of a Free Trade Area of the Asia-Pacific (2007)