APEC's new vision(2)

SHARING WISDOM: APEC economic leaders hold their annual meeting in Beijing on November 11 (LI XUEREN)

Trade and investment facilitation was set as the objective when APEC was established 25 years ago. In 2006, APEC economic leaders put forward the vision of an FTAAP, but it was not an objective that could be achieved immediately.

In 2010, the APEC Economic Leaders' Meeting agreed to accept regional FTA negotiations—such as ASEAN plus Three, ASEAN plus six and the Trans-Pacific Partnership (TPP)—as potential pathways to the FTAAP and to make APEC an incubator of the FTAAP. But no real progress was made.

In recent years, all kinds of regional FTAs have thrived within the Asia-Pacific region. However, Gao said, due to different rules, standards and development levels of the region's economies, they failed to facilitate cross-border trade and investment.

A report released on November 7 by the Pacific Economic Cooperation Council (PECC), a non-governmental official observer of APEC, said a high-quality FTAAP that includes all APEC members would increase the size of the global economy by $2.4 trillion by 2025. The report also suggested that further liberalization via the US-led TPP and the ASEAN-led Regional Comprehensive Economic Partnership (RCEP) should only add an estimated $223 billion and $644 billion to the global economy, respectively.

"Economies in the Asia-Pacific region hope the FTAAP can come to fruition as soon as possible after being incubated for years to bring greater benefits to companies and people in the region," said Gao.

Roberto Azevedo, Director General of the World Trade Organization (WTO), believed that the FTAAP agreements would be compatible with multilateral trade systems and would complement the WTO. "Any move toward trade liberalization and against trade protectionism is a good move," Azevedo told a press conference on November 8 in Beijing.

Michelle Bachelet, President of Chile, expressed her strong support for the launch of the roadmap to realize the FTAAP, in a speech at the APEC CEO Summit 2014 on November 9.

"We're certain that we'll build upon the many regional treaties already in place or under negotiation, such as the Pacific Alliance, the RCEP and the TPP," said Bachelet.

"The various regional integration projects in the Pacific region are no zero-sum game," she added. "On the contrary, they complement each other and reflect the variable geometry of a complex and diverse but ultimately highly dynamic and creative region, one that is setting the course and giving shape to the new century."

Improving connectivity

APEC economic leaders also set the targets to enhance regional physical, institutional and people-to-people connectivity by 2025.

Despite the achievements in promoting connectivity within the region, challenges persist. There is still a disparity in the quality of and access to infrastructure throughout the region, and a large gap in the ability of institutions to promote connectivity due to various regulatory constraints or lack of capacity. On people-to-people exchanges, much work still needs to be done to ease barriers to interaction and mobility.

To tackle these issues, Xi said that the APEC members agreed to expand cooperation in infrastructure investment and financing, promote public-private partnerships, and thereby break the financing bottleneck.

As the Chinese saying goes, "to end poverty, build a road." Infrastructure construction and connectivity are a prerequisite for regional economic integration.

"Just imagine the economic power that will be unleashed when the rest of the world becomes connected," said Greg Boyce, Chairman and CEO of Peabody Energy from the United States, the world's largest private-sector coal company, at the APEC CEO Summit on November 10. "China is a perfect example of what happens: Over the last 10 years, 600 million people have been moved up."

A PwC report shows that Asia's infrastructure market is going to grow by 7-8 percent annually over the next decade, to reach $5.3 trillion by 2025, or 60 percent of the world's total.