Asia-Pacific FTA high on agenda

China hopes that proposing a feasibility study of the Free Trade Area of the Asia-Pacific (FTAAP) will help deal with the fragmentation of global trade, a senior official said on Thursday.

Chinese senior official for the Asia-Pacific Economic Cooperation (APEC) Tan Jian made the comment at a press briefing after the APEC 2014 second senior officials' meeting.

Senior officials from APEC member economies gathered in east China's port city of Qingdao from Wednesday to Thursday to discuss cooperation initiatives ahead of the APEC leaders' meeting in November in Beijing.

Officials deliberated the next step towards the realization of the FTAAP. This involved improving information sharing between participants in free trade and regional trade agreements.

Global trade is increasingly fragmented and the "spaghetti bowl" effect of having so many differing agreements causes difficulties for businesses when it comes to terms of investment, Tan said.

"APEC, which focuses on liberalizing and facilitating trade and investment, has to face up to severe problems. Therefore, it is necessary to discuss whether the FTAAP process can be started," Tan said.

The FTAAP was proposed in 2004 and written into the declaration of the leaders' meeting in 2006. China raised the feasibility study proposal in the first senior officials' meeting in February this year.

"APEC members have shown a positive attitude towards the Chinese initiative and we have reached some consensus," Tan said.

But he also acknowledged problems and misunderstandings that needed to be remedied. "What's the relationship between FTAAP and Bogor Goals, TPP and RCEP? Is there a timeframe? Will it be coherent or a non-binding trade arrangement?" Tan asked.

He ruled out contradictions between the FTAAP, TPP and RCEP, as the latter two are pathways to realize the FTAAP.

Also, the FTAAP will help to achieve the Bogor Goals by 2020.

Robert Wang, U.S. senior official for APEC, noted China has put forward the proposal to move towards the realization of FTAAP and that the United States supports it.

The participants agreed to ensure member economies would be ready with their regulations and policies to move towards the FTAAP, Wang said.

However, he declined to say when all the economies would be ready, given their different circumstances, interests and standards, and the lack of a clear definition what the FTAAP will be.

Take TPP as an example, 12 members decided to move forward, nine others said they did not want to or signed other kinds of agreements.

"So they are making their own decisions," he said, "People keep on doing the FTAs/RTAs....Obviously they find some benefit in that as well. If they find it's only negative, they would not do it."

Iman Pambagyo, Director General for International Trade Cooperation of Ministry of Trade in Indonesia, said Asia-Pacific continues to deepen integration. TPP and RCEP have their own life and dynamics. Perhaps at some point in the future, APEC should think how they could be converged. The ultimate aim should be creating a multilateral trade system that is fair, provides room for developing countries to catch up with developed countries, Pambagyo said.

"The FTAAP will be an ideal format for Asia-Pacific integration. We are yet to discuss what the format and process will be," Pambagyo said.

Russia said it welcomes regional economic integration in the Asia-Pacific region, and considers it a major task of APEC to agree on how to combine all integration processes into one, which will be eventually the FTAAP, said Valery Sorokin, senior official of Russia for APEC.

"We are a part of the discussions on the FTAAP, and keen to be actively and constructively involved in this process," Sorokin said.