Free trade for the future(2)

BOOSTING CONNECTIVITY: Chinese President Xi Jinping (front center) poses with representatives of 21 countries that signed the memorandum of understanding on establishing the Asian Infrastructure Investment Bank in Beijing on October 24 (HUANG JINGWEN)

As the host of this year's AELM, China will work together with other members on following key directions—building FTAAP, supporting multilateral trade agreements and opposing trade protectionism, promoting connectivity of the global value chain and supply chain, as well as facilitating free trade and investment across borders, according to him.

This year also marks the 20th anniversary of setting the Bogor Goals—free and open trade and investment in the Asia-Pacific by 2010 for developed economies and 2020 for developing economies—at the Bogor AELM in Indonesia in 1994. Shen Danyang stressed that the 2014 AELM assumes the mission of achieving the goal and mapping out the direction of Asia-Pacific economic cooperation in the future.

"China's proposal helps boost the confidence of APEC partners. It also shows that China is willing to advance regional economic integration in the Asia-Pacific region," Wang Zhenyu, an associate researcher with the China Institute of International Studies (CIIS) , said to Beijing Review.

China is making efforts to deepen reform, upgrade industrial structure and transform its economic growth model. Wang believes if China can achieve success in advancing growth through innovation and reform, the Asia-Pacific region will embrace new opportunities from China's development.

Prospects for FTAAP

The building of FTAAP is among the most eye-catching proposals to be discussed during the 2014 AELM.

The prospect of building FTAAP was first proposed as early as 2004. The proposal was written into the APEC Economic Leaders' Declaration eight years ago. APEC member economies have long discussed the issue.

At the Boao Forum for Asia in April, Chinese Premier Li Keqiang suggested that APEC member economies should consider beginning feasibility research on FTAAP to better facilitate trade and investment in the Asia-Pacific region.

"Now it is time to take actions. We will blow the horn at the AELM in Beijing. Starting the negotiation process of FTAAP will be an important goal for APEC this year," Chinese Vice Foreign Minister Li Baodong said at the Boao Forum for Asia on April 10.

Over the past decade, Asia-Pacific regional economic integration has embraced rapid development. A large number of bilateral and multilateral trade agreements have been signed between member economies.

However, despite the agreements, Asia-Pacific economies are still divided into several groups rather than a broad and more general preferential multilateral framework for all.

For example, both of the two major multilateral trade agreements in the region are not fully representative. The United States-led Trans-Pacific Partnership does not include China. The Regional Comprehensive Economic Partnership proposed by the Association of Southeast Asian Nations has China as a member, but the United States has yet to join it.

Many member economies have long been calling for APEC to play an active role in promoting the negotiation process for building FTAAP, Wang said.

Currently, protectionism remains a major barrier against free trade and investment across borders. Particularly in the aftermath of the global financial crisis in 2008, many economies have strengthened trade barriers and seen disputes occur frequently. "This situation hinders free trade and economic growth while deviating from the Bogor Goals," researcher Shen Minghui commented.