Asia-Pacific in Times of Competitive Regionalism

In the 1990s, Asia-Pacific Economic Cooperation (APEC) positioned itself as the protagonist of a new approach towards trade and economic cooperation based on the principles of open regionalism and compliance with WTO rules. However, APEC member economies’ disappointment with unilateral trade and investment liberalization along with the failed Doha round of WTO trade negotiations have resulted in a rapid emergence of bilateral and sub-regional preferential trade agreements in Asia-Pacific.  Preferential trade agreements are discriminatory by their very nature as they facilitate liberalization of trade and investment only within a limited group of economies (parties to such agreements) and retain trade barriers towards the third countries. Therefore, preferential trade agreements depart from the fundamental principles of APEC, foremost from the key principle – open regionalism. The growing number of preferential trade agreements undermines APEC principles and erodes the WTO global trade system. APEC members have tacitly acknowledged their failure to achieve the Bogor goals, set in 1994, to establish free trade and investment area by 2010 for developed economies and by 2020 for developing economies. In order to strengthen and improve APEC’s standing in the global trade system, its members are considering  the possibility  of signing a formal legally binding agreement establishing the Free Trade Area of Asia Pacific (FTAAP) which, however, will likely damage APEC’s unique goal of promoting voluntary and unilateral regional trade liberalization in a way which is not discriminatory to the third parties. Yet, FTAAP is unlikely to succeed in the near future because of economic and geopolitical rivalry between two largest economies of Asia-Pacific and the world – the US and China. Each of them is pursuing the goal of creating its own sub-regional trade grouping (US-dominated Trans Pacific Partnership and China-led Regional Comprehensive Economic Partnership) founded on the rules imposed by a relevant economic and political leader and purposely excluding its rival. The US-China rivalry in AsiaPacific makes any comprehensive regional free trade area dysfunctional. Therefore, two sub-regional trade blocks centered on the US and China, with various regional economies being simultaneously members of both blocks, will determine the architecture of trade relations in Asia-Pacific for some time to come while APEC will be further marginalized.

1. Anderson K. (1990). Is an Asian-Pacific Block Next? Journal of World Trade. 25. 27-40.

2. Arapova E., Baykov A. (2012) Regional Financial Integration in East Asia. Mezhdunarodnye Protsessy. Vol. 11. No. 30. P. 98-107.

3. Baykov A. (2011) Integration in Europe and East Asia: Models of Expansion. Moscow University Proceedings. No. 4. P. 57-74.

4. Bergsten C.F. (2009). Pacific Asia and the Asia Pacific: The Choices for APEC. Policy Brief No. PB09-16. URL: http://www.iie.com/publications/pb/pb09-16.pdf

5. Bracken L. (2014). U.S.-Japan Bilateral Talks on Trade in Motor Vehicles Key Development: U.S. seeks to lower Japanese nontariff barriers. Japan Automobile Manufacturers Association. URL: http://www.jama.org/media-center/bloomberg-bna-increase-allowance-simplified-entry-u-s-carsjapan-issue-tpp-talks/

6. Breslin S. (2014). APEC Summit Shows How Hard It is to Define the Asian Region. URL: http://www.chathamhouse.org/expert/comment/16217

7. Brodjonegoro B.P.S. (2014). Regional Economic Integration and Multilateral Trading System. In: Tan Khee Giap, Pedrosa E., Berger B. (eds.) Conference on New Priorities of Regional Economic Integration –Mandate for APEC. Singapore. URL: https://www.pecc.org/resources/regional-cooperation/2178conference-on-regional-economic-integration-a-mandate-for-apec/file

8. Cai P. (2014). Mapping Out the Contours of Asia-Pacific Integration. In: Proceedings of 2014 APEC Study Center Consortium Conference, May 12-13, Qingdao, China. URL: http://publications.apec.org/ publication-detail.php?pub_id=1530

9. Capling A., Ravenhill J. (2012). The TPP: multilateralizing regionalism or the securitization of trade policy? In: Lim C.L., Elms D.K., Low P. (eds.) The Trans-Pacific Partnership. A Quest for a Twenty-first Century Trade Agreement. New York: Cambridge University Press. P. 279-298.

10. Chung Ch-P. (2012). Designing Asia Pacific Economic Cooperation. In: Ho L.S., Wong J. (eds.) APEC and the Rise of China. Singapore: World Scientific Publishing. P. 15-43.

11. Drysdale P. (2014). Where to with Cooperation Across Asia and the Pacific Now? In: Tang G., Petri P. (eds.) New Direction in Asia-Pacific Economic Integration. East-West Center, Honolulu. P. 180-192.

12. Elms D.K., Lim C.L. (2014). An Overview and Snapshot of the TPP Negotiations. In: Lim C.L., Elms D.K., Low P. (eds.) The Trans-Pacific Partnership. A Quest for a Twenty-first Century Trade Agreement. New York: Cambridge University Press. P. 21-44.

13. Hamanako S. (2014). Trans-Pacific Partnership versus Comprehensive Economic Partnership: Control of Membership and Agenda Setting. ADB Working Paper Series on Regional Economic Integration. No. 146. 30 p.

14. Ho C-H. (2013). Advancing the Attainment of the Bogor Goals: The APEC Way. In: Proceedings of 2013 APEC Study Center Consortium Conference, July 26-27, Jakarta, Indonesia. Available at: http://publications.apec.org/publication-detail.php?pub_id=1447 (accessed 08.07.2015). P. 67-89.

15. Horn H., Mavroidis P., Sapir A. (2009). Beyond WTO? An anatomy of EU and US preferential trade agreements. Bruegel Blueprint Series. Volume VII. Brussels: Bruegel. 34 p.

16. Lehmann J-P. (2005). East Asian Regionalism & the Doha Agenda: Addressing the Hard Question. In: 16th PECC General Meeting. Seoul, Korea. URL: http://www.pecc.org/resources/2026-eastasian-regionalism-a-the-doha-agenda-addressing-the-hard-questions?path= (accessed 11.06.2015)

17. Lee Y-S. (2011). Reconciling RTAs with WTO Multilateral Trading System: Case for New Sunset Requirement on RTAs and Development Facilitation. Journal of World Trade. Vol. 45, No. 3. P. 629-651.

18. Lewis M. (2012). Achieving a Free Trade Area of the Asia-Pacific: does the TPP present the most attractive path? In: Lim C.L., Elms D.K., Low P. (eds.) The Trans-Pacific Parnership. A Quest for a Twenty-first Century Trade Agreement. New York: Cambridge University Press. P. 223-241.

19. Li K. (1996). The Effect and Strategy of China’s Trade Liberalization. APEC Study Center, IDE. URL: http://www.ide.go.jp/English/Publish/Download/Apec/pdf/1996_27.pdf

20. Liu Ch. (2014). APEC’s Role in Promoting Regional Economic Integration. In: Tang G., Petri P. (eds.) New Direction in Asia-Pacific Economic Integration. East-West Center, Honolulu. P. 224-234.

21. Meltzer J. (2015). From the Trans-Pacific Partnership to a free trade agreement of the Asia-Pacific? URL: http://www.brookings.edu/blogs/future-development/posts/2015/05/05-tpp-trade-meltzer

22. Morrison C. (2014). The Asia-Pacific Cooperation Agenda: Moving from Regional Cooperation Toward Global Leadership. Asia Pacific Issues, No. 116. URL: http://www.eastwestcenter.org/system/tdf/private/api116.pdf?file=1&type=node&id=34796

23. Pang Zh. (2012). Rebalancing Relations between East Asia and trans-Pacific Institutions: Evolving Regional Architectural Features. In: Ho L.S., Wong J. (eds.) APEC and the Rise of China. Singapore: World Scientific Publishing. P. 45-63.

24. Scollay R. (2004). Preliminary Assessment of the Proposal for a Free Trade Area of the Asia-Pacific (FTAAP): An Issues Paper for the APEC Business Advisory Council (ABAC). Singapore. URL: http://www.apec.org.au/docs/koreapapers2/sx-rs-paper.pdf

25. Kim S., Park I., Park S. (2013). A Free Trade Area of the Asia Pacific (FTAAP): Is It Desirable? // Journal of East Asian Economic Integration. Vol. 17, No. 1. P. 3-25.

26. Lim H.K. (2014). Day One Opening Speech. In: Tan K.G., Pedrosa E., Berger B. (eds.) Conference on New Priorities of Regional Economic Integration – Mandate for APEC. Singapore.

27. Lim J.H. (2014). Regional Economic Integration and Multilateral Trading System. In: Tan K.G., Pedrosa E., Berger B. (eds.) Conference on New Priorities of Regional Economic Integration – Mandate for APEC. Singapore.

28. Schott J. and Muir J. (2012). US PTAs: what’s been done and what it means for TPP negotiations. In: Lim C.L., Elms D.K., Low P. (eds.) The Trans-Pacific Parnership. A Quest for a Twenty-first Century Trade Agreement. N.Y.: Cambridge University Press. P. 45-63.

29. Sipilov S.B. (2007). Rol’ foruma ATES v politico-integratsionnykh protsessakh Aziatsko-Tikhookeanskogo regiona [Role of APEC in Political Integration Processes of the Asia-Pacific region]. Avtoref. Ph.D. thesis. Moscow. 24 p.

30. Suominen K. (2009). The Changing Anatomy of Regional Trade Agreements in East Asia. Journal of East Asian Studies. Vol. 9, No. 1. P. 29-56. DOI: 10.1017/S1598240800002800

31. Tarmidi L. (2013). In: Proceedings of 2013 APEC Study Center Consortium Conference, July 26-27. Jakarta, Indonesia. URL: http://publications.apec.org/publication-detail.php?pub_id=1447. P. 154-166.

32. Veremeev N.V. (2008). Printsip “otkrytogo regionalizma” (mezhdunarodno-pravovoj analiz) [The principle of open regionalism (legal analysis)]. Moskovskij zhurnal mezhdunarodnogo prava. No. 1 (69). P. 5-24.

33. Wang J. (2004). China’s Regional Trade Agreements: The Law, Geopolitics and Impact on Multilateral Trading System. In: Singapore Year Book of International Law. Singapore. P. 119-147.

34. Yeoh E. K-K, Yoo I-S, Liong L. W-L. (2012). The Role of China in Asia-Pacific Trade Framework in the Context of APEC. In: Ho L.S., Wong J. (eds.) APEC and the Rise of China. Singapore: World Scientific Publishing. P. 121-168.

35. Yu P. (2014). TPP and Trans-Pacific Perplexities. Fordham International Law Journal, Vol. 37, No. 4. P. 1129-1181.

36. Znang Y. (2014). APEC in 2014: Meeting New Challenges. In: Tang Guoquiang, Petri P. (eds.) New Direction in Asia-Pacific Economic Integration. Honolulu: East-West Center. P. 66-77.