Opening up Economies Would Benefit Everyone – APEC

When the Asia-Pacific Economic Cooperation (APEC) was established 26 years ago, its foundation was laid with the vision of a region free from protectionism.

In economics, protectionism is the complete opposite of free trade, the former being the policy of restraining trade between states through a variety of government regulations, such as tariffs and restrictive quotas, while the latter is the doctrine where governments reduce as much as possible the barriers to trade.

Today, as it has been in the two-and-a-half decades of APEC’s existence, there is a broad consensus among member economies that the impact of protectionism on economic growth and on economic welfare, in general, is largely negative.

The APEC continues to espouse free and open trade and investment among its 21 member economies, as it remains convinced that protectionism stifles opportunity and narrows the market because it crushes the energy of the marketplace that creates new solutions in the first place.

As far as the majority, if not all APEC economies, is concerned, a freer market creates more opportunity, more growth, more dynamism, and more innovation.

The spirit of countering protectionism remains high in the list of commitments of the APEC, as emphasized in the Leaders’ Statement on Supporting the Multilateral Trading System and the coming 10th World Trade Organization (WTO) Ministerial Conference (MC10) in Nairobi, Kenya issued at the conclusion of the 2015 APEC Economic Leaders’ Meeting, hosted by Manila last week.

“We reaffirm our pledges against all forms of protectionism, through our commitment to a standstill until the end of 2018, and to roll back protectionist and trade-distorting measures,” the APEC Leaders stated.

“We recognize the need to exert further efforts to comply with this commitment,” they added. “We remain committed to exercising maximum restraint in implementing measures that may be consistent with WTO provisions but have a significant protectionist effect, and to promptly rectifying such measures, where implemented.”

Basically, this commitment is the biggest variable of success for the spirit of multilateral trading system going forward in the Asia Pacific.

At the conclusion of the APEC Economic Leaders’ Meeting, the heads of member economies reaffirmed the value, centrality and primacy of this system under the auspices of the WTO, whose achievements have contributed significantly to the region’s economic dynamism and resiliency in the past 20 years.

“The Asia Pacific has been one of the fastest-growing trading regions, benefiting significantly from the stability and predictability of the multilateral trading system,” the APEC Leaders said, vowing to continue to work closely together to strengthen the rules-based, transparent, non-discriminatory, open and inclusive multilateral trading system as embodied in the WTO.

“Within the established framework of the multilateral trading system, we commit APEC to continuing to support the effectiveness of the WTO and the further promotion of its objectives for the benefit of all,” the ey said.

In this regard, the APEC Leaders endorsed the forthcoming MC10, WTO’s top level decision-making body, to be held in Nairobi, Kenya. They also declared their commitment to work together for its success.

As on previous occasions, they pledged to provide the necessary political impetus during the Nairobi Ministerial Meeting to achieve a balanced set of outcomes and clear guidance to post-Nairobi work.

“We instruct our Ministers to engage actively and constructively in the discussions, with the objective of achieving concrete, meaningful, balanced and development-oriented outcomes,” the APEC Leaders said.

They further acknowledged that bilateral, regional and plurilateral trade agreements can play an important role in complementing global liberalization initiatives.

“We will continue to work together to ensure that they are consistent with WTO agreements and contribute to strengthening the multilateral trading system,” the APEC Leaders said. (PCOO-APEC Communications Team)