Group 17 Sayak Gupta (49) Srinivas (54) Sujit Mishra (56)

Asia Pacific Economic Co-operation

Agenda Introduction

History

Objective

Member Economies

APEC relations

Demographics

APEC Structure

Bogor goals

How APEC operates

APEC summits

Strengths & weaknesses

Achievements

Implications for MNE’s

APEC Forum APEC is the premier forum for facilitating economic growth, cooperation, trade and

investment in the Asia-Pacific region.

It is an inter-governmental forum, which operates on the basis of non binding

commitment and open dialog.

No treaty obligations

APEC has 21 member economies with a population of over 2.6 billion which

accounts for more than 40% of the world’s population.

APEC countries have a combined GDP of 21 trillion US dollars which is more than

half of world GDP.

APEC accounts for nearly half of world trade.

Member Economies

* Australia * Malaysia

* Brunei Darussalam * Mexico

* Canada * New Zealand

* Chile * Papua New Guinea

* People's Republic of China * Peru

* The Republic of the Philippines * Hong Kong, China

* The Russian Federation * Japan

* United States of America * Indonesia

* Chinese Taipei * Singapore

* Republic of Korea * Viet Nam

History of APEC APEC begins as an informal Ministerial-level dialogue group in Canberra, Australia in

1989. It is a 21 member economic forum at present.

Founding members are

Australia, New Zealand

6 ASEAN economies

Japan and South Korea

Canada and the United States

Later the co-operation expanded to China, Taiwan, & Hong Kong in1991

Mexico & Papua New Guinea in 1993 ,Chile (1994 ) , Russia, Vietnam, Peru in 1998.

India, Mangolia, Pakistan, Laos, Bangladesh, Costa Rica, Colombia, Panama and

Ecuador are among a dozen countries seeking membership in APEC.

Mission and Vision To support sustainable economic growth and prosperity in Asia-Pacific region

To build a dynamic and harmonious Asia-Pacific community

Decrease number of obstacles in trade and also reduce tariffs across APEC nations

Set it’s eye on achieving ‘Bogor goals’ by the year 2010

To encourage the flow of goods, services, capital, and technology

To develop and strengthen the multilateral trading system; and

APEC Relations

ASEAN and APEC

ASEAN has been at APEC's core from the very beginning and is doing its part to

advance APEC's purposes and is consistent with APEC goals.

 ASEAN Free Trade Area (AFTA) can be said to be a building block for the fulfillment of

the goals that APEC set for eventual free trade among its members.

It can be said that the two organizations could be seen as complementing, and not

competing with each other.

NAFTA and APEC

Accomplishment of Bogor goals and free trade among APEC member economies leads

to significant trade diversion from western countries to APEC member economies.

Western economies trying to maintain balance of power between east and west in APEC

decisions by restricting Asian countries into economic co-operation.

APEC and India

India tried for membership in APEC. It was initially supported by United States,

Japan

Australia but was denied later.

India would have been had an undue advantage in trade if it is a member of APEC.

Reasons :

o Decision was made not to admit more members until 2010 till Bogor goals are

accomplished.

o India does not border the Pacific Ocean, which all current members do

o There is a concern among Western countries that India's entry might tilt the

balance of

power shifts in favour of India.

Countries Area Population GDP GDP/Capita Export Import Life Expectancy Literacy

  1000 Sqkm millions $Billion $ $Millions $Millions Years Rate %

Australia 7692 22 924 43490 110 120 82 92

Brunei 6 0.4 10 31800 5.7 1.6 78 95

Canada 9971 34 1,577 43270 360 314.5 81 97

Chile 757 17 212 10120 39.5 32.3 79 99

China 9561 1338 5,926 4270 762 660 73 94

Philippines 300 93 199 2060 41 44 68 95

Russia 17075 142 1,479 9990 762 660 69 100

USA 9364 309 14,586 47390 905 1673 78 96

Korea 99 48 1,014 19890 285 262 80 87

Malaysia 330 28 237 7760 141 115 74 92

Mexico 1958 113 1034 8890 214 222 76 93

New Zealand 271 4.4 127 28770 22 25 80 89

Guinea 463 9.9 4.5 400 5 2 53 39

Peru 1285 29 157 4700 17 13 74 90

Hong Kong 1 7 224.5 31758 292 300 83 87

Japan 378 127.8 5459 41850 596 519 83 96

Indonesia 1905 239.8 706.5 2500 85 57 68 92

Singapore 1 5 208.7 40070 230 200 81 95

Vietnam 332 86.9 106.4 1160 32 38 75 93

APEC to World GDP

APEC STRUCTURE

APEC Secretariat

APEC secretariat operates as the core support mechanism for the APEC process.

It provides coordination, technical and advisory support as well as information

management, communications and public outreach services.

It performs a central project management role

It is based in Singapore

The APEC Secretariat is headed by an Executive Director and a Deputy Executive

Director

Muhamad Noor Yacob is the present Executive Director

BOGOR GOALS APEC Economic Leaders' Declaration Of Common Resolve (1994)

Free and open trade and investment in the Asia-Pacific

by 2010 for developed economies

by 2020 for developing economies

THREE PILLARS

Three specific areas crucial to achieving the Bogor Goals:

Trade and investment liberalization

Business facilitation

Economic and technical cooperation

Trade and Investment liberalization

Reducing and eliminating tariff among member countries

Reducing and eliminating non-tariff barriers to trade and investment

Opening of markets

Achievements :

1) Changes in the global trade of APEC industrialized and volunteering economies.

Cont ..

2) Stocks of inward and outward FDI in

APEC industrialized and volunteering

economies.

3) Real GDP/capita for APEC industrialized

economies and volunteering economies

Business facilitation

Reducing the costs of business transactions

Improving access to trade information

Bringing into line policy and business strategies to facilitate growth

Free and open trade

Achievements :

1. The Single Window Strategic Plan, adopted in 2007, provides a framework for

the development of Single Window systems which will allow importers and

exporters to submit information to government once, instead of to multiple

government agencies, through a single entry point.

Cont ..

2. As a result of the APEC Trade Facilitation Action Plan (TFAP I) the cost of

business transactions across the region was reduced by 5% between 2002 and

2006.

3. In 2008, a groundbreaking Investment Facilitation Action Plan was endorsed

which aims at improving the investment environment in Member

Economies.

4. The APEC Business Travel Card (ABTC) provides substantial time and cost

savings to business people and facilitates their travel in the region, by

allowing visa free travel and express lane transit at airports in

participating economies.

Economic and technical cooperation

ECOTECH is dedicated to providing training and cooperation to build capacities in all

APEC Member Economies to take advantage of global trade.

This area builds capacity at the institutional and personal level to assist APEC Member

Economies and its people gain the necessary skills to meet their economic potential.

Achievements :

APEC's Economic and Technical Cooperation (ECOTECH) activities are designed to

build capacity and skills in APEC Members at both the individual and institutional

level, to enable them to participate fully in the regional economy and liberalization

process

Since APEC first began to undertake capacity building work in 1993, more than 1200

projects have been initiated; and in 2008, APEC was implementing a total of 212

capacity building projects with a total value of US$13.5m.

A network of 41 APEC Digital Opportunity Centers (ADOC) now operate in seven

Member Economies.

APEC BUSINESS ADVISORY COUNCIL

1995 with the aim of providing advice to the APEC Economic Leaders on ways to

achieve the Bogor Goals

Each economy nominates up to three members from the private sector to ABAC

These business leaders represent a wide range of industry sectors

HOW APEC OPERATES APEC operates as a cooperative, multilateral economic and trade forum.

It is a voluntary association in which participants do not cede powers of regulation or

enforcement to a supra-national institution;

Every year one of the 21 member economies plays host to APEC meetings,

Serves as the APEC Chair

Chairs the annual economic Leaders meeting & ministerial Meetings

Fills Executive Director of the APEC Secretariat.

CONT .. Member Economies take individual and collective actions to open their markets and

promote economic growth

Activities are centrally funded by small annual contributions from member

Economies

Member economies provide considerable resources to assist in the operations

APEC’s project database contain all project related information

ANNUAL MEETINGS OF THE ASIA-PACIFIC ECONOMIC COOPERATION

Summit Year Place Summit Year Place

1 1989 Australia 13 2001  People's Republic of China

2 1990  Singapore 14 2002  Mexico

3 1991  Republic of Korea 15 2003  Thailand

4 1992 Thailand 16 2004  Chile

5 1993  United states 17 2005  Republic of Korea

6 1994  Indonesia 18 2006  Vietnam

7 1995  Japan 19 2007  Australia

8 1996  Philippines 20 2008  Peru

9 1997  Canada 21 2009  Singapore

10 1998  Malaysia 22 2010  Japan

11 1999  New Zealand 23 2011  United states

12 2000  Brunei Darussalam      

STRENGTHS OF APEC

A supporter of the of the multilateral trade negotiations, apply

pressure to key countries, suggest visionary initiatives and monitor

compliances.

APEC has considerable experience in the reform process and can

act as a model or demonstration to the rest of the world.

APEC is a large group of countries that could be extremely

influential if adopted a common approach and joint bargaining

objectives.

WEAKNESSES OF APEC

Absence of priorities- The effort in trade reform within APEC has

been diffused across too many areas and there is need for more

focus.

Shortfalls in member commitments- Many countries have gone no

further than their existing pledges.

Weak evaluation procedures- there is lack of outside scrutiny of

individual members’ progress in implementing reforms

Dearth of specific APEC incentives- APEC operates by consensus

and there is no mechanism for enforcing group decisions.

IMPLICATIONS FOR THE MNES

The group of five APEC industrialized

economies — Australia, Canada, Japan,

New Zealand and United States — has

made good progress towards the Bogor

Goals of free and open trade and

investment by 2010.

The 21 APEC members account for 55

percent of world GDP; 45 percent of

global trade; and 40 percent of the

world’s population. Sixty percent of U.S.

goods exports go to APEC economies.

Share in World GDP, 2011

Contributions to Global GDP Growth

IMPLICATIONS FOR THE MNES

The industrialized economies have

• cut tariffs

• increased the proportion of goods imported tariff free

• reduced non-tariff measures

• opened up services trade

• liberalized investment and

• actively promoted greater trade and investment through facilitation

initiatives.

• The average applied tariff rate for the industrialized economies fell from

7.0 per cent in 1996 to 3.9 per cent in 2008.

• The share of imports entering duty free has increased from 42.6 per cent

in 1996 to 60.1 per cent in 2008.

IMPLICATIONS FOR THE MNES

• The assessment of progress has highlighted the areas where more work is needed,

including in the reduction of high tariffs and trade-distorting non-tariff measures

on agricultural and textile, clothing and footwear products, and an increased focus

on services and investment.

• The gathering pace of globalization poses real challenges for trade and economic

policy makers in the region.

• Global dynamics have created the impetus for APEC economies to tackle a broader

set of issues in their efforts to foster and reap the gains from greater economic

integration. 

References

http://statistics.apec.org/

http://data.worldbank.org/

http://www.apec.org/Home/About-Us/How-APEC-Operates/Action-Plans

http://www.apec.org/Home/Groups/Other-Groups/APEC-Business-Advisory-C

ouncil.aspx

http://en.wikipedia.org/wiki/Apec

http://www.apec2011.gov/

www.reuters.com/.../us-apec-worldbank-idUSTRE7AA0NR2011111