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Closer Regional Integration Boosts Common Development in Asia-Pacific

 

Despite a lackluster global econom­ic recovery, the Asia-Pacific region has remained as the world's most economically dy­namic region and the main engine of global growth, almost a decade after the 2008 global fi­nancial crisis.

RISK OF PROTECTIONISM

The global economy has shown a broad-based upswing while the World Trade Organiza­tion (WTO) forecast that global trade is expected to rebound this year.

The International Mon­etary Fund (IMF) said in its 2017 World Economic Outlook that global eco­nomic recovery is contin­uing at a faster pace. It re­vised up its global growth projections to 3.6 percent for this year and 3.7 per­cent for 2018.

However, economic pol­icy-makers in the Asia Pa­cific are still facing a com­plex situation as they need to cope with various press­ing global challenges in ef­forts to sustain the region's exuberant momentum.

One major task among others is to renew the spirit of free trade with the emergence of anti-glo­balization and anti-trade sentiments.

According to the Pacific Economic Cooperation Council (PECC) annual survey, rising protection­ism is seen as the "top risk to growth of the Asia-Pa­cific region."

"Against the backdrop of concerns over rising protectionism, arguments for regional economic integration efforts and emphasis on pathways to achieving the Free Trade Area of the Asia-Pacific (FTAAP) and support for the multilateral trad­ing system become even more pertinent," PECC Co-chair Don Campbell said on the sidelines of the Asia-Pacific Economic Cooperation (APEC) sum­mit in Vietnam's central port city of Da Nang last month.

APEC can address the doubts about the benefits of globalization by com­plementing its work on trade with an equally ro­bust work on social poli­cies, such as education, social safety nets and la­bor market policies.

"They provide stabil­ity, certainty and a sense of forward momentum," said Campbell.

FTAAP TO BOOST REGIONAL INTEGRATION

Promoting inclusive growth in the Asia-Pacific remains as a top priority for APEC members, and the FTAAP notion has been increasingly accept­ed as an ideal model for boosting global trade and regional integration.

In fact, the FTAAP is not a new idea. It was first pro­posed in 2004 and written into the declaration of the APEC leaders' meeting in 2006. During the 2014 APEC meeting in Beijing, APEC member economies pushed forward the FTAAP process and sketched a roadmap for it.

By encompassing all 21 APEC economies through trade and investment lib­eralization, the FTAAP, once established, will be­come the world's largest free trade zone, cover­ing 40 percent of world's population, half of global trade and 60 percent of world trade.

Experts believe that the FTAAP is an effective way to reduce the "spaghetti bowl effect" of overlap­ping regional trade ar­rangements and lower fragmentation risks.

Alan Bollard, execu­tive director of the APEC Secretariat based in Sin­gapore, said APEC would like to see "some im­proved recipes for cook­ing the noodles," and APEC members were test­ing the kitchen for trying things out.

"The FTAAP is a strategic choice for long-term pros­perity of the Asia-Pacific region. It will provide insti­tutional guarantee for our region's open economy," said Tang Guoqiang, co-chair of PECC.

Compared with other plans for a regional free trade regime, the FTAAP stresses inclusiveness, seeks greater regional in­tegration and could un­leash enormous potential for fast economic growth and balanced wealth dis­tribution.

In his keynote address at the APEC CEO sum­mit in Vietnam's Da Nang in November, Chinese President Xi Jinping said the building of the FTAAP has been "the long-cher­ished dream of the busi­ness community in our region".

"We should get into ac­tion, fully implement the Beijing Roadmap, move toward the FTAAP and provide an institutional underpinning for growing an open economy in the Asia-Pacific," the Chinese leader said.

ASEAN, DIALOGUE PARTNERS TO FACT-TRACK RCEP TALKS

In view of the large po­tential of the Regional Comprehensive Economic Partnership (RCEP) to promote global trade and growth, the Association of Southeast Asian Nations (ASEAN) and its trading partners have stressed the need to fast-track their ne­gotiations on a "modern , comprehensive, high-qual­ity and mutually-benefi­cial" RCEP agreement.

Ten ASEAN leaders and their six trading partners -- China, Japan, South Korea, Australia, New Zealand and India -- have reaffirmed their com­mitment to wrap up the 16-nation regional trade pact by next year.

At the first RCEP sum­mit on the sidelines of an ASEAN summit in Manila in November, the 16 RCEP leaders discussed the way forward for an earnest con­clusion of RCEP talks.

"We hereby instruct our ministers and negotiators to intensify efforts in 2018 to bring the RCEP nego­tiations to conclusion, and resolve to ensure they have the necessary sup­port to achieve this out­come," the RCEP leaders said in a joint statement.

Duterte, who chaired the RCEP summit, said RCEP is "not simply an­other trade agreement but a trade deal that could provide the size and scale to unleash new potentials and write new rules of the game of the international trade order."

"Changing global eco­nomic landscape requires us to urgently bring the negotiations to a close and to create deeper trade linkages that would dem­onstrate our commitment to free and open mar­kets," Duterte said.

The 16 participating countries account for al­most half of the world population, 31.6 percent of global output, 28.5 per­cent of global trade and a fifth of the global foreign direct investment inflows in 2016, according to ASEAN data.

The 10-member ASE­AN groups Brunei, Cam­bodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

RCEP, launched in No­vember 2012, "is focusing on harmonizing rules and regulations throughout the region. Such regu­latory convergence will significantly reduce the cost of doing business in the region," said Jayant Menon, lead economist of the Asian Development Bank (ADB).

Once RCEP is estab­lished, he said the next step would be to broaden it to­ward greater regional eco­nomic integration through the FTAAP that includes all 21 APEC economies.

"FTAAP is the only pro­posal so far that includes both the United States and China," Menon said. 

 

 

Source From: Myanmar Business Today