Advancing APEC’s Regional Economic Integration (REI)

1. Chen-Sheng Ho, Ph.D. Associate Research Fellow Chinese Taipei APEC Study Center TIER Advancing APEC’s Regional Economic Integration (REI)

2. Describe APEC’s work in enhancing REI. Examine the APEC-ASEAN+N-TPP triangular relationship. Provide suggestions for Taiwan’s participation. I. Presentation Purpose

3. Free Trade Area of the Asia-Pacific (FTAAP) In 2004, members of ABAC Canada proposed the creation of the FTAAP. In 2006, APEC Leaders stated that the FTAAP could be a long-term goal. In 2009, ABAC urged APEC to start negotiations on the FTAAP and Leaders to decide on a framework by 2010 Summit. II. APEC and REI

4. Key Areas of REI for APEC 2010: SOM1 Document 1. Accelerating REI: Promote convergences in key areas: services, digital economy, investment, trade facilitation, rules of origin, and standards/technical barriers to trade. Implement APEC environmental goods and services (EGS) work. 2. Improving the Business Environment: Implement Leaders’ instruction on an APEC-wide improvement of 25% in five key areas of doing business by 2015. Develop a post-LAISR agenda (structural reform). Strengthen intellectual property rights (IPR). II. APEC and REI

5. Key Areas of REI for APEC 2010: SOM1 Document 3. Enhancing Regional Connectivity and Trade Facilitation: Promote supply chain connectivity. Promote digital connectivity. Develop Authorized Economic Operator (AEO) programs. II. APEC and REI

6. The work can be divided into two parts: FTAAP and Key Areas of REI. FTAAP is direct and strong integration. REI Key Areas are indirect and weak integration or just cooperation. Integration means building a larger unit. Cooperation means creating mutual benefits. III. Analysis of APEC’s REI Work

7. U.S. Views: “Asia-Pacific Regional Economic Integration and Architecture” by Dr. Fred Bergsten, Peterson Institute for International Economics, March 25, 2010 Asia-Pacific Bloc versus Asian Bloc Asia-Pacific Bloc: APEC, TPP (Trans-Pacific Partnership); U.S. influential Asian Bloc: ASEAN+N; China influential Stress the need to move in parallel. TPP: 1st step to Asia-Pacific integration. The addition of Canada, Malaysia, Japan, and Korea to the TPP (P8) would certainly create a critical mass. TPP leads to FTAAP; Bogor Goals=FTAAP IV. APEC-ASEAN+N-TPP Relationship

8. ASEAN Views: ASEAN+N: China, Japan, South Korea, India, Australia and New Zealand. Possible ASEAN+8 (ASEAN+6+U.S.+Russia): Meet on sidelines of APEC meeting held in Asia. ASEAN+N: ASEAN wants to be the driver. Asian Bloc (ASEAN+N): More important than Asia-Pacific Bloc (APEC, TPP) IV. APEC-ASEAN+N-TPP Relationship

9. Triangular Relationship Analysis: The U.S. position is important because it is willing and able to influence outcomes. The U.S. would continue to promote APEC because it represents the Asia-Pacific Bloc. The U.S. could transform TPP (P8) into a larger TPP (Canada, Malaysia, Japan, Korea). The U.S. could support more APEC economies to join TPP by 2020, if APEC endorses the idea that TPP equals FTAAP and FTAAP equals Bogor Goals. ASEAN would focus on Asian Bloc first and then the Asia-Pacific Bloc. China would support Asian Bloc first (ASEAN+China) and then Asia-Pacific Bloc. Japan and Korea would continue to support both blocs without preference but may change with clearer benefits. IV. APEC-ASEAN+N-TPP Relationship

10. Support the Clarification of the Bogor Goals, so as to strengthen APEC. Specifically, what is free and open trade and investment? Support the idea that Bogor Goals equal FTAAP, if it is heard, so as to promote FTAAP. Support the U.S. proposal to describe the TPP (P8) negotiations and membership enlargement at the 2010 MRT Meeting in June. Promote Taiwan’s participation in the 2010 Bogor Goals’ assessment, so as to show Taiwan’s support for free trade and to increase the possibility of joining TPP. Continue to participate actively in APEC and to promote the idea that APEC initiatives must include all APEC members. V. Suggestions for Taiwan

11. Thank You