HomeMy WebLinkAbout05-11 Apec article from Business Times.pdf
Apec's relevance By Rupa Damodaran rupabanerji@nstp.com.my 2011/05/23 THE snow-capped Rocky Mountains' allure is probably an understatement for anyone flying into little-known Bozeman
in Montana, the rugged western state of the US. The alpine ski resort is located in the famed Big Sky where, yes, the sky does provide a wide lens-effect and spectacular backdrop, and
is breathtaking even in high snowfall. A first for most of the senior officials and ministers attending the Asia Pacific Economic Cooperation's (Apec) MRT (ministers responsible for
trade) last week, they found the experience of the journey up to the venue 9,000 feet above sea level quite different from what many of them have been used to. An indication of the different
paths the 21 economies have to take, perhaps, with the challenges in the global trade and investment scenario in the 21st century? Host US Trade Representative Ron Kirk beamed at his
fellow ministers who made it to the American West. The majestic mountain scenery only prompts them them to broaden their vistas and plan on a grander scale, he quipped. The US wants
to do big things with its Asia-Pacific partners and strong engagement with the region is a major component of its trade agenda. Because the Asia-Pacific markets are so large and dynamic,
its importance to the US will only increase. Weighing the relevance of Apec meetings is not new, having been labelled various names including " talk shop", among others, over the years.
Broadly, Apec works towards the Bogor goal for free and open trade and investment in Asia Pacific by 2010 for developed countries and 2020 for developing countries. It has a unique form
of operating on the basis of open dialogue and respect for all views, and decision-making within Apec is done by consensus. The grouping members find the non-binding commitments appealing.
For an open trading economy like Malaysia, being a part of the Pacific Rim grouping has only become more relevant than before, what with 75 per cent of its trade undertaken with trading
partners from both sides of the Pacific Ocean. Malaysian exporters and importers as well as businesses at large have benefited from reduced tariffs and other trade barriers across the
region. Apec estimates that business transaction costs have been reduced by 5 per cent between 2002 and 2006, with further 5 per cent at the end of 2010. Through its collaborative efforts,
the cooperation has created an environment that enables safe and efficient movement of goods, services and people across borders through policy decisions and economic and technical cooperation.
Facilitation of customs procedures is one of the significant applications. While the rhetoric by Apec economic leaders at the annual summit tends to provide the impression of a talk
shop, officials attest that a lot of work go in from the moment priorities and goals are put forth during the summit. Being a host country is an advantage and, in the case of the US,
an added opportunity as the world's largest economy underwent one of the worst economic crisis since the 1930s. For the Obama administration, the success of Apec 2011 is crucial in many
regards. For one, his government wants to be seen doing something for small and medium enterprises (SMEs) -which contribute more than 90 per cent to its economy. In such a forum like
Apec, it is political will which holds sway over plans and programmes and fits well into the American agenda. This year's thrust on SMEs holds a lot of promise in growing theAsia-Pacific
region further. Lending a hand to SMEs to join the global supply chains and developing the ilk through innovation and green growth as well as next generation strategies would provide
the much-needed boost to SMEs in both the developed and advanced member countries as well as the emerging ones. Being a member of this group does not come cheap one may argue, looking
at the average US$75,000 (RM227,250) annual fee an economy the size of Malaysia has to fork out, but the benefits outweigh such concern. As efforts to salvage the Doha Round of the World
Trade Organisation are being expedited with a plaintive plea by the organisation's director general Pascal Lamy last week, there is a lot of cheer to look out for the businesses. With
the Trans Pacific Partnership (TPP) designed to conclude by year-end and a handful of
FTAs involving Asean and China, Japan, Korea, Australia and New Zealand and not to mention the numerous bilateral trade pacts, the question of market access does not appear so critical.
For the US, the US-Korea FTA and the TPP talks are fundamental pillars of its trade engagement. Kirk sees Apec 2011 as a potential watershed year, not only for the US as a single economy,
but also for the grouping as a whole. It is a critical juncture, he admits, to keep Apec's trade and investment agenda on the cutting edge for the next 20 years. Last week's work in
Big Sky has produced progress towards the shared goal of a seamless regional economy.