APEC addressing changing growth patterns: Bollard
“We are now seeing a shift toward domestic demand-driven growth and an increase in services trade as opposed to predominantly trade-driven growth that focused on manufactured and processed goods that occurred in region over the last three decades,” explained Dr Alan Bollard when he delivered a keynote speech in Hong Kong, China on Monday.
Dr Bollard, the APEC Secretariat’s Executive Director, made this assessment when delivering remarks on the changing patterns of trade and investment influencing growth in the Asia-Pacific and the way trade moves across economies through new initiatives at the border and across the border at the Asian Financial Forum where he addressed members of the global financial and business community.
These changing growth patterns, coupled with the increasingly complex way goods and services move across borders, from e-commerce to value-added supply chains, are impacting the economic environment and the way APEC addresses cross-border trade.
“Most production used to be “made-here/sold-there” and was vertically integrated within large firms,” said Dr Bollard. “Rules of origin and value-added were simple concepts.”
“But today, we are seeing an increase in intermediate goods, intra-industry trade and supply chains, which use border transactions more aggressively and help SMEs to globalise,” he continued. “As a result, rules of origin and value added are much more complex.”
For example, the Apple iPhone supply chain is a complicated web that extends throughout the Asia-Pacific region. With research, development and design in the United States to chip manufacturing in Malaysia, fingerprint sensors fabricated in Chinese Taipei and inductor coils made in Japan, the Apple iPhone eventually ends up in China for final assembly.
In response to this web of cross-border movement and subsequent increased intra-APEC trade, APEC’s Supply Chain Connectivity initiative streamlines border regulations so supplier components can seamlessly move across regional boundaries.
“Today, efficient borders are recognised as a source of competitive advantage,” explained Dr Bollard. “APEC members are working toward reducing the red tape and heavy policing that slows down goods getting across borders.”
“Increasingly border regulation in APEC member economies is being streamlined through single window, harmonised, contracted operations.”
However, as borders become more open, criminal and undesirable movements can take advantage. As a result, APEC is working on new technologies and international arrangements to help deter this.
“As APEC innovates new initiatives to accelerate economic integration in the Asia-Pacific, we are moving toward frontiers of the future and the Free Trade Area of the Asia-Pacific (FTAAP), as envisioned by APEC Economic Leaders,” concluded Dr Bollard.
“We will always have international borders, but we can ensure they are configured to promote trade and regional prosperity.”
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