Asia-Pacific Economic Cooperation (APEC)

What triggers the regional association?

The Asia-Pacific Economic Cooperation (APEC) is a regional economic forum
established in 1989 to leverage the growing interdependence of the Asia-Pacific. Asia Pacific
Economic Cooperation, or APEC, was formed in 1989 in Australia as an informal forum in which
member nations could discuss free trade and economic cooperation along the Pacific Rim.
From the perspective of the United States, it has been a crucial institution for economic
engagement within the region.
APEC was one of many multilateral trade organizations that emerged in the post-Cold
War era. As the bipolarity of the Cold War came to an end, the new world order was marked in
part by increasing globalization and the growth of regional trading blocs. The United States took
a leading role in defining this new world order in which free trade and multilateral organizations
played an essential role. Although it assisted in the formation of APEC, the U.S. Government
played an even greater role in the creation of the North American Free Trade Association
(NAFTA) and the World Trade Organization (WTO). All these organizations were based on
identifying shared economic goals and methods, but did not rely upon binding agreements, so
states could continue to act in their own interests. These entities aimed to eliminate trade
barriers and help states consider regional issues when making economic policy.
Although the countries bordering the Pacific Ocean were extremely diverse in terms of
linguistic, cultural and ethnic backgrounds, they shared rapidly developing economic power and
common economic interests. Recognizing this, a number of countries in the region began to
discuss the creation of a regional organization that would promote free trade and further
economic integration in the hope that such a move would benefit the entire region. The resulting
organization, APEC, brought together developed and developing economies and promoted the
idea of a regional Pacific Rim identity in an effort to increase Pacific-wide cooperation.
Since 1989, APEC has expanded from its original 12 members to include 21 member
economies. The founding members were Australia, Brunei Darussalam, Canada, Indonesia,
Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and
the United States. In 1991, the People’s Republic of China, Hong Kong and Chinese Taipei
joined the forum. Over the course of the 1990s, Chile, Mexico, Papua New Guinea, Peru and
Russia entered the organization. Together, the member economies of APEC account for a
substantial proportion of world economic activity.
During its first five years of operation, APEC established its core objectives. In the 1991
Seoul Declaration, APEC member economies proclaimed the creation of a liberalized free trade
area around the Pacific Rim as the principle objective of the organization. A 1994 meeting held
in Bogor, Indonesia set as the organization’s goal the achievement of “free and open trade and
investment” for the region, establishing 2010 as the target date for developed economies and
2020 for developing ones. Each subsequent annual meeting has addressed the implementation
of the Bogor Goals along with pertinent issues for the economic and security interests of the
member economies. The topics that may be addressed at annual meetings are not proscribed,
but the focus tends to be on trade liberalization, promoting business, and economic cooperation.
The United States has long been an active participant in the activities of APEC. In 1993
in Seattle, Washington, President Bill Clinton hosted what became the first annual meeting of
member economies—ministers and economic leaders. This act displayed the U.S. commitment
to working with APEC member economies to achieve freer trade in the region. Since that time
the United States has maintained a high level of engagement with this key organization.

APEC ensures that goods, services, investment and people move easily across borders.
Members facilitate this trade through faster customs procedures at borders; more favorable
business climates behind the border; and aligning regulations and standards across the region.
For example, APEC's initiatives to synchronize regulatory systems is a key step to integrating
the Asia-Pacific economy. A product can be more easily exported with just one set of common
standards across all economies.

Asia-Pacific Economic Cooperation (APEC) operates as a cooperative, multilateral

economic and trade forum. It is the only international intergovernmental grouping in the world
committed to reducing barriers to trade and investment without requiring its members to enter
into legally binding obligations. APEC achieves its goals by promoting dialogue and arriving at
decisions on a consensus basis, giving equal weight to the views of all members. APEC
Member Economies report progress towards achieving free and open trade and investment
goals through Individual Action Plans (IAPs) and Collective Action Plans (CAPs).

APEC has grown to become a dynamic engine of economic growth and one of the most
important regional forums in the Asia-Pacific. Its 21 member economies are home to around 2.8
billion people and represent approximately 59 per cent of world GDP and 49 per cent of world
trade in 2015. As a result of APEC’s work, growth has soared in the region, with real GDP
increasing from USD 19 trillion in 1989 to USD 42 trillion in 2015. Meanwhile, residents of the
Asia-Pacific saw their per capita income rise by 74 per cent, lifting millions out of poverty and
creating a growing middle class in just over two decades. Bringing the region closer together,
reducing trade barriers, and smoothing out differences in regulations have boosted trade which,
in turn, has led to this dramatic increase in prosperity. Average tariffs fell from 17 per cent in
1989 to 5.2 per cent in 2012. During that same time period, the APEC region’s total trade
increased over seven times—outpacing the rest of the world with two-thirds of this trade
occurring between member economies.

APEC implements a wide variety of initiatives to help integrate the region’s economies
and promote trade while addressing sustainability and social equity. Since 1989, APEC’s role in
facilitating regional integration has proven essential to promoting trade and economic growth in
the Asia-Pacific. For example, reducing trade barriers between members, harmonizing
standards and regulations, and streamlining customs procedures have enabled goods to move
more easily across borders.

In 1994, APEC Leaders committed to achieving the ‘Bogor Goals’ of free and open trade
and investment by 2020 through reducing trade barriers in the region and promoting the free
flow of goods, services and capital among APEC economies. Since then, members have made
measurable progress in achieving these goals. APEC’s Trade Facilitation Action Plan which
includes streamlining customs procedures reached its target of region-wide reduction in costs at
the border by 5 per cent between 2004 and 2006. A further 5 per cent decrease was achieved
between 2007 and 2010, which saved businesses in the Asia-Pacific a total of USD 58.7 billion.
Over time, the APEC agenda has broadened its focus to address behind-the-border barriers
such as improving regulatory practices and the local business climate.

APEC launched its Ease of Doing Business Action Plan in 2009, with the goal of making
it cheaper, easier and faster to do business in the region. Between 2009 and 2013, member
economies improved the ease of doing business in the Asia-Pacific by 11.3 per cent across all
areas of the initiative, including starting a business, getting credit or applying for permits. For
example, APEC has expedited the time it takes for a company to build a new factory or office
building. Today, construction permits are issued at a faster pace, dropping 18.7 per cent from
169 days to 134 days in the last four years with APEC topping the charts globally for the
shortest permit time. Starting a company in the Asia-Pacific is also simpler with the number of
procedures falling by 20.2 per cent since 2009.

At the border, APEC economies have centralized export-import processes online,

accelerating the time it takes for goods to travel across borders. Known widely as Single
Window, this virtual system links all government agencies involved in the export-import process,
allowing companies to submit documents electronically one time from anywhere. Gone are the
myriad forms, long queues, and visits to multiple agencies, while goods spoil in warehouses.
Since the APEC Sub-Committee on Customs and Procedures (SCCP) launched the Single
Window initiative in 2007, APEC capacity building workshops have provided training on software
coding or legal issues to help APEC members implement their own Single Window systems. By
2013, 14 APEC economies had adopted various stages of the Single Window system, with the
goal of all 21 members coming on board by 2020

To improve behind-the-border barriers to trade, APEC has been working to foster

transparency, competition and better functioning markets in the Asia-Pacific through regulatory
reform, improving public sector and corporate governance, and strengthening the legal
infrastructure. Since 2004, APEC has implemented predictable and transparent regulatory
practices across the region. For example, APEC members have made great strides in ensuring
new government laws are publicly communicated and their cost and benefits are appropriately
assessed.

APEC is working to connect the region through improving physical infrastructure

linkages, people mobility and institutional ties across the Asia-Pacific. APEC's Connectivity
Blueprint maps out initiatives from improving information technology and transportation
infrastructure to making it easier for students, business people, and tourists to travel around the
region.

In addition to supporting small businesses, APEC is working to ensure all members of

the Asia-Pacific can participate in the growing economy. The APEC Digital Opportunity Center
was established in 2004 to provide computer skills training to vulnerable rural and urban
communities. With over a hundred centers in 10 APEC economies offering information
technology (IT) training, the APEC Digital Opportunity Center (ADOC) is focused on
transforming digital divides into digital opportunities. Over the last decade, these Centers have
trained over half a million people throughout the APEC region, and almost half are female. Many
men and women who received this digital training found jobs or started their own businesses,
improving livelihoods and incomes for their families.
 Association of Southeast Asian Nations (ASEAN)

What triggers the regional association?

The Association of Southeast Asian Nations (ASEAN) was formed in 1967 by Indonesia,
Malaysia, the Philippines, Singapore, and Thailand to promote political and economic
cooperation and regional stability. Brunei joined in 1984, shortly after its independence from the
United Kingdom, and Vietnam joined ASEAN as its seventh member in 1995. Laos and Burma
were admitted into full membership in July 1997 as ASEAN celebrated its 30th anniversary.
Cambodia became ASEAN’s tenth member in 1999.

The ASEAN Declaration in 1967, considered ASEAN’s founding document, formalized the
principles of peace and cooperation to which ASEAN is dedicated. The ASEAN Charter entered
into force on 15 December 2008. With the entry into force of the ASEAN Charter, ASEAN
established its legal identity as an international organization and took a major step in its
community-building process.

The ASEAN Community is comprised of three pillars, the Political-Security Community,

Economic Community and Socio-Cultural Community. Each pillar has its own Blueprint
approved at the summit level, and, together with the Initiative for ASEAN Integration (IAI)
Strategic Framework and IAI Work Plan Phase II (2009-2015), they form the Roadmap for and
ASEAN Community 2009-2015.

ASEAN commands far greater influence on Asia-Pacific trade, political, and security issues than
its members could achieve individually. This has driven ASEAN’s community building efforts.
This work is based largely on consultation, consensus, and cooperation.

U.S. relations with ASEAN have been excellent since its inception. The United States became a
Dialogue Partner country of ASEAN in 1977. Dialogue partners meet regularly with ASEAN at
the working and senior levels to guide the development of our regional relations. In July 2009,
Secretary Clinton signed the Treaty of Amity and Cooperation in Southeast Asia (TAC) which
has greatly enhanced U.S. political relations with ASEAN.

Every year following the ASEAN Ministerial Meeting, ASEAN holds its Post-Ministerial
Conference (PMC) to which the Secretary of State is invited. In 1994, ASEAN took the lead in
establishing the ASEAN Regional Forum (ARF), which now has 27 members and meets each
year at the ministerial level just after the PMC.

ASEAN was established on August 8, 1967 in Bangkok, Thailand, with the signing of
what became known as the ASEAN Declaration or the Bangkok Declaration, signed by the 5
founding fathers of the regional organization: Indonesia, Malaysia, Philippines, Singapore, and
Thailand. ASEAN replaced the Association of South East Asia (ASA), which was formed in 1961
by the Philippines, Thailand, and Malaysia. From the original 5 members, ASEAN eventually
expanded membership to include Brunei, which joined in 1984; Vietnam in 1995; Laos and
Myanmar in 1997; and Cambodia in 1999. The organization, which aimed to promote peace and
security in Southeast Asia and foster economic development and cooperation among member
nations, was formed with the ongoing Vietnam War in its backdrop, and the fall of Vietnam, Laos
and Cambodia to communist regimes.

Aims and principles

ASEAN was born with the signing of the ASEAN declaration by the 5 foreign ministers of
Indonesia, Malaysia, the Philippines, Singapore and Thailand, who spent 4 days negotiating
over the document at a beach resort in Bang Saen, southeast of Bangkok.

The ASEAN declaration contained only 5 articles, which described the aims and purposes of
ASEAN and how these were to be carried out and implemented. ASEAN, they said, aims to
achieve the following:

 accelerate the economic growth, social progress and cultural development in the region

 promote regional peace and stability

 promote active collaboration and mutual assistance on matters of common interest

 provide assistance to each other in the form of training and research facilities

 collaborate more effectively for the greater utilization of agriculture and industries,
expansion of their trade, improvement of transportation and communications facilities,
and raising the living standards of their peoples

 promote Southeast Asian studies

 maintain close cooperation with existing international and regional organizations with
similar aims and purposes, and explore all avenues for even closer cooperation

It also stated the the association is open for participation to all states in the Southeast Asian
region subscribing to the same principles and purposes. The declaration also said that ASEAN
represents “the collective will of the nations of Southeast Asia to bind themselves together in
friendship and cooperation and, through joint efforts and sacrifices, secure for their peoples and
for posterity the blessings of peace, freedom and prosperity.”

The signatories were Adam Malik of Indonesia, Narciso R. Ramos of the Philippines, Tun
Abdul Razak of Malaysia, S. Rajaratnam of Singapore, and Thanat Khoman of Thailand.

Challenges for ASEAN

In their speeches following the signing of the declaration, the foreign ministers
recognized the need for the countries of Southeast Asia to work together as the region faces
challenges in uncertain times.
 Then-Philippine foreign affairs secretary Narciso Ramos – father of former Philippine
president Fidel Ramos – said that by regional cooperation, ASEAN "could marshal the still
untapped potentials of this rich region through more substantial united action."

For his part, Adam Malik of Indonesia shared his vision for Southeast Asia as a region
that can "stand on its own feet, strong enough to defend itself against any negative influence
from outside the region."

For S. Rajaratnam of Singapore, it is imperative for ASEAN members to combine

national thinking with regional thinking.

He said: "We must think not only of our national interests but posit them against regional
interests: that is a new way of thinking about our problems. And these are two different things
and sometimes they can conflict. Secondly, we must also accept the fact, if we are really serious
about it, that regional existence means painful adjustments to those practices and thinking in
our respective countries. We must make these painful and difficult adjustments. If we are not
going to do that, then regionalism remains a utopia."

Third time for PH

Since its founding, ASEAN has held semiannual meetings hosted by its member-countries. This
year, the Philippines will be hosting the 30th and 31st summit in April and in November.

This will be the third time that the Philippines will host the ASEAN Summit. The first was in
December 1987, which saw the approval of the Manila Declaration 1987 that promoted the
principle of sustainable development and its integration in all aspects of development, among
other things.

In January 2007, the 12th ASEAN Summit was held in Cebu. The leaders committed
to establish an ASEAN charter that would serve as a "firm foundation in achieving one ASEAN
Community by providing an enhanced institutional framework as well as conferring a legal
personality to ASEAN."

The 30th ASEAN summit will be held this month in Manila, while the 31st will be held in
November in Clark, Pampanga.

Tensions, problems

While the regional bloc aims to foster cooperation and goodwill among the ASEAN member-
nations, the organization has faced problems and disagreement in the past. The hotly-contested
South China Sea has been a constant source of tension among ASEAN members, with the
bloc failing to release the customary joint communique for the first time in 2012 because of it.

The Philippines was caught in a word war with then-ASEAN host Cambodia, which
supposedly opposed the mention in the joint statement of Scarborough Shoal, over which the
Philippines and China are in a heated dispute.
But Cambodia, a Beijing ally, resisted, and said that it cannot accept "that the joint statement
has become hostage of the bilateral issue (between the Philippines and China)."

In 2016, the ASEAN chairman's statement noted serious concerns in the South China Sea, but
did not mention the historic ruling by an arbitral tribunal in The Hague that favored the
Philippines.

ASEAN has also faced dilemmas with the actions of its members. In 2007, Myanmar's prime
minister Thein Sein forced ASEAN summit host Singapore to disinvite UN envoy Ibrahim
Gambari, who was supposed to brief regional leaders. This happened as Myanmar faced
international backlash over its crackdown on street protests.

Then Philippine president Gloria Macapagal-Arroyo had also warned that the Philippines was
unlikely to ratify a new ASEAN charter unless Myanmar's opposition leader Aung San Suu Kyi
was released

What triggers the regional association?

The North American Free Trade Agreement's history began in 1980. Its purpose is to reduce
trading costs, increase business investment and help North America be more competitive in the
global marketplace. The agreement is between Canada, the United States, and Mexico. For
more details, see NAFTA Fast Facts.

History

The impetus for NAFTA began with President Ronald Reagan, who proposed a North American
common market in his campaign. In 1984, Congress passed the Trade and Tariff Act. That gave
the president "fast-track" authority to negotiate free trade agreements. It
removes Congressional authority to change negotiating points. Instead, it allows Congress only
the ability to approve or disapprove the entire agreement. That makes negotiation much easier
for the administration. Trade partners don't have to worry that Congress will nitpick specific
elements.

Canadian Prime Minister Mulroney agreed with Reagan to begin negotiations for the Canada-
U.S. Free Trade Agreement. It was signed 1988 and went into effect 1989. NAFTA has now
replaced it. (Source: "NAFTA Timeline," NaFina.)

Regan’s successor, President H.W. Bush, began negotiations with Mexican President Salinas
for a liberalized trade agreement between the two countries. Before NAFTA, Mexican tariffs on
U.S. imports were 250 percent higher than U.S. tariffs on Mexican imports. In 1991, Canada
requested a trilateral agreement, which then led to NAFTA. In 1993, concerns about the
liberalization of labor and environmental regulations led to the adoption of two addendums.

In 1992, NAFTA was signed by President George H.W. Bush, Mexican President Salinas and
Canadian Prime Minister Brian Mulroney. It was ratified by the legislatures of the three countries
in 1993. The U.S. House of Representatives approved it by 234 to 200 on November 17, 1993.
The U.S. Senate approved it by 60 to 38 on November 20, three days later.
President Bill Clinton signed it into law December 8, 1993. It entered force January 1, 1994.
It was a priority of President Clinton's, and its passage is considered one of his first successes.
(Source: "NAFTA Signed Into Law," History.com, December 8, 1993.)

Purpose

Article 102 of the NAFTA agreement outlines its purpose. There are seven specific goals.

1. Grant the signatories most favored nation status.

2. Eliminate barriers to trade and facilitate the cross-border movement of goods and
services.

3. Promote conditions of fair competition.

4. Increase investment opportunities.

5. Provide protection and enforcement of intellectual property rights.

6. Create procedures for the resolution of trade disputes.

7. Establish a framework for further trilateral, regional, and multilateral cooperation to

expand the trade agreement's benefits. (Source: "FAQ," NAFTA Secretariat.)

Has It Fulfilled Its Purpose?

NAFTA fulfilled all seven of its goals. That's made it the world’s largest free trade area in terms
of gross domestic product.

Most important, it increased the competitiveness of the three countries in the global
marketplace. This has become critical since the launch of the European Union. It's helped
overcome the economic growth of China and the rise of other emerging market countries. In
2007, the EU replaced the United States as the world's largest economy. In 2015, China
replaced both and took the top spot.