APEC Sets Sights Beyond 2020
APEC Sets Sights Beyond 2020: A Conversation with APEC 2016 Senior Officials Chair Luis Quesada and Executive Director Alan Bollard
Soon after APEC was established more than two decades ago, Economic Leaders committed to the goal of free and open trade and investment in the Asia-Pacific by no later than 2020, also known as the Bogor Goals. As APEC finds itself a few years from the target year in a continuously evolving regional architecture, it now seeks to bolster its efforts to achieve these goals. Part of this is developing a post-2020 vision that reinforces and adds value to the overall objective of improving the lives of people in the Asia-Pacific region through sustainable economic growth fueled by integrated economies.
APEC: Peru and other APEC economies are four years from their deadline to achieve the Bogor Goals of “free and open trade and investment” by 2020. What are your thoughts on APEC’s progress toward meeting these objectives?
Dr. Alan Bollard (AEB): We’ve made a lot of progress over the last nearly 20 years but we still have quite a way to go, so we’ve got a big work program to keep progress going over the next couple of years until 2020. Free and open trade are quite big thresholds to achieve. On some areas, we are well on track while on others, we still have work to do.
Ambassador Luis Quesada (LQ): I think the progress has been immense, I wouldn’t say that it has been absolute, of course. It is very difficult to measure against the objectives described in the Bogor Goals targeting free trade and investment for this Asia-Pacific region. But if we look back to 1994 bearing the fact that the world of trade and investment has changed, APEC always been able to adjust to changes.
APEC: Describe APEC economies’ policy priorities for the region during Peru 2016 and how these priorities fit with its strategic goals heading into 2020?
AEB: Peru has a number of priorities this year. The most important is the one that we always had – regional economic integration. There is a lot of work going on continuing the APEC story about opening up trade at the borders and also making it easier to get regulatory reforms behind the borders and helping supply chains go across borders as well. The important thing for this year is the study on Free Trade Area of the Asia-Pacific (FTAAP). We will be presenting to Leaders in Lima in November some suggestions about how that can go forward.
In addition, there are themes on human development, which are made possible by a capacity building policy that we’re also working on. We have significant themes on education and food security. In addition, we continue last year’s work of modernizing small and medium enterprises – a lot of work going on there.
LQ: There is a very strong link between the priorities and the Bogor Goals. The most important one is economic integration and the fact that we are very close to finalizing our analytical study on how to deal with this issue. This is one of the most important achievements this APEC year. We are also doing the roadmap on services and with trade and investment changing, services is certainly a new area of work. The internationalization of small and medium enterprises is also key to our prosperity. Of course, we should not forget that education is a new issue recently introduced in the agenda. Food security is also a key issue, especially that food tariffs have not gone down exactly in accordance with what we have done with other sectors in APEC. So we have a lot of work to do there.
APEC: How do you see the role of APEC evolving with the start of a new decade, taking into account the emergence of other multilateral bodies?
AEB: Economies are changing. We are more middle class than we used to be but growth is slowing compared to what used to happen. And so we are looking at new growth drivers and that means domestic demand, the role of SMEs, and the role of services. It also means continuing this work on freeing out traditional trade and investment. But there are some big challenges and we’re going to have to do it with less of a demographic wave to help us and with big technical changes that are also going on. Senior Officials got a special section to discuss all of that.
LQ: First of all, APEC has been the incubator of most free trade agreements and the general architecture of the region. I would say that the challenge for APEC is now the recent trends on anti-globalization around the world. Some politicians, unfortunately, participate in delivering this message to the public. I think this is worrisome, and I trust that APEC will be driving forward against these tendencies. In the end, open trade and investment have given APEC members tremendous benefits.
APEC: Peru is one of several emerging APEC economies chairing APEC. The Philippines in 2015, Viet Nam in 2017 and Papua New Guinea to follow. How do you see this line-up impacting the region’s policy agenda and potential outcomes?
AEB: APEC is a mixture of small and big economies, developed and developing markets. And over the last couple of years and going forward, we have been hosted by a number of developing economies that have put more focus on capacity building. So we know that we can’t take it for granted, and we can put in place technical changes that will have immediate effects for member economies. In addition, the host economies have put much more focus on inclusiveness - on who’s getting the benefit of growth, not just to assume that opening up trade helps economies grow but who gets to benefit from that as well.
LQ: What I can see since last year as the influence of the emerging economies is the introduction of social issues in the APEC agenda. It is not trade and investment by itself, but also how they are linked with the lives of people and alleviating poverty in the region. Now we have been discussing issues that are social and human, like education and labor. APEC is not an exception to that. These issues have definitely reached our agenda.
APEC: What will be the key indicators of success in APEC for Peru in 2016 and beyond?
AEB: Peru is hosting this year and quite rightly keeps going a number of big initiatives and the big ones, from my point of view, are connectivity, the FTAAP study, modernizing SMEs, and growing the area of services. But in a way, the intangible deliverable we hope to achieve will be for Leaders and officials to understand the benefits from continued openness and economic integration around the Pacific. That includes finding better ways of communicating with the general public because we are, of course, hearing a quite big story about anti-globalization. Sometimes, we hear stories about jobs, about opening up markets, and migration. We know there is quite a strong feeling about these in some developed economies, so we do need to address this.
LQ: I speak in the case of Peru, for instance. APEC has taught us - as an emerging economy participating alongside economies that are more developed in different fields. We learned and saw how things were done in the other parts of the world in terms of opening up markets, etc. APEC was a good example because we were doing it together with the other economies. So I am very optimistic - there will be challenges after 2020 and many things will change that we cannot even tell now. So I think we have to keep up and be alert to what’s going on and work together collectively as we have done in the past at APEC.