WASHINGTON — Leaders of the 21-member Asia-Pacific Economic Cooperation forum, meeting in Beijing on Tuesday, pledged their support and participation for a regional free-trade deal known as the Free-Trade Area of the Asia Pacific that, if realized, would encompass 44 percent of global trade.
This story first appeared in the November 12, 2014 issue of WWD. Subscribe Today.
President Obama, Chinese President Xi Jinping and the other leaders agreed to take steps to advance the concept of an FTAAP in a joint statement issued at the summit. APEC, which includes the U.S., China, Japan, South Korea, Vietnam, Thailand, Russia, Canada and Mexico, among other economies, represents 58 percent of the world’s gross domestic product and 40 percent of the population.
“Recognizing APEC has a critical role to play in shaping and nurturing regional economic integration, we agree that APEC should make more important and meaningful contributions as an incubator to translate the Free Trade Area of the Asia-Pacific from a vision to reality,” the APEC leaders said. “We reaffirm our commitment to the eventual FTAAP as a major instrument to further APEC’s regional economic integration agenda.”
The APEC members agreed to launch a comprehensive, two-year strategic study on the trade initiative through a new committee on trade and investment. The leaders called for a report on FTAAP by the end of 2016.
Xi, speaking at a news conference, called the support from the leaders a “historic step in the direction of an Asia-Pacific free trade area.”
Obama also backed the FTAAP in remarks before an APEC plenary session, pointing out that the goals were first outlined in 2006.
The White House said in a fact sheet that the APEC economies represent a significant and growing market for U.S. goods and services. In 2013, U.S. goods and services trade with APEC economies totaled $2.5 trillion, accounting for 61.5 percent of all U.S. exports last year.
Trade experts have said that an FTAAP would take several years to complete and face significant challenges. However, it would require a commitment from major economies with political and regional geopolitical differences, including the U.S., China, Japan and South Korea.
The U.S. is negotiating the TPP with 11 countries — Vietnam, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Singapore. China is not a part of the TPP talks and some trade experts have said the push by Xi and other Chinese officials in Beijing this week for the FTAAP could be meant to counter TPP. The APEC leaders said the FTAAP would be realized on the basis of concluding other regional trade deals such as the TPP and the Regional Comprehensive Economic Partnership.