APEC: Asia Pacific Economic Cooperation

APEC is a regional economic forum established in 1989 to leverage the growing

interdependence of the Asia-Pacific. APEC's 21 members aim to create greater prosperity for
the people of the region by promoting balanced, inclusive, sustainable, innovative and
secure growth and by accelerating regional economic integration.
APEC is working on areas such as trade and investment liberalization, business facilitation,
human security, and economic and technical cooperation, aiming to achieve sustainable
growth and prosperity in the Asia-Pacific region.
The notion of establishing a forum for promoting sustainable economic growth and regional
cooperation in the Asia-Pacific was first raised by former Australian Prime Minister Bob
Hawke in 1989 in response to the growing interdependence of the region and the advent of
regional trade blocs in other parts of the world.
The first APEC Ministerial Meeting was held later that year in Canberra, Australia, which
marked the official establishment of the mechanism.
In November 1991, the third Ministerial Meeting was held in the South Korean capital of
Seoul with the approval of the Seoul APEC Declaration, which finalized APEC's objectives of
developing and strengthening the open multilateral trading system, and reducing barriers to
trade in goods, services and investment.

In 1994, at the Economic Leaders' Meeting in Bogor, Indonesia, the APEC Economic Leaders'
Declaration of Common Resolve was adopted. The declaration pledged APEC's intent to
achieve free and open trade and investment by 2010 for industrialized economies, and 2020
for developing economies.
APEC's institutional framework includes the Economic Leaders' Meeting, the Ministerial
Meeting, the Senior Officials' Meeting, committees and working groups.

The APEC Secretariat, based in Singapore, was established in 1993 to

provide support and services for the forum's activities at various levels.

APEC currently has 21 members, namely Australia, Brunei, Canada,

Chile, China, China's Hong Kong, Chinese Taipei, Indonesia, Japan,
Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia,
Singapore, South Korea, Thailand, the United States and Vietnam.
It has three observers -- the ASEAN Secretariat, the Pacific Economic Cooperation Council,
and the Pacific Islands Forum.

Nature of APEC’s regionalism

Three unique features of APEC.
1. Open regionalism – EU is an example of closed regionalism. Closed regionalism
means highly institutionalized framework, tight norms. APEC has a minimum
institutional structure.
2. Soft regionalism – bottom up approach. Countries determine voluntary targets.
3. Massive participation by private sector. Another unique feature is that the members
are known as member economies rather than state parties. China as well as Taiwan
and Hong Kong are member economies in APEC.

Features of APEC
Initially it was just for ease of doing business but now it is taking other objectives also, like
non-conventional security threats.
Bogor Goals : in 1994, member countries commited to create free trade area in Asia Pacific.
Developed countries will reach the target by 2010 and developing countries by 2020. (Huge
significance in case of collapse of WTO).

APEC has three pillars

 1. Trade and investment.
2. Business facilitation.
3. Economic and technical cooperation.
It represents 60% of global GDP and 40% of global population.

Future prospects.
It depends upon US-China relations.
It has been suggested that APEC countries should seriously consider India’s membership in
APEC as a balancer to China and as a countervailing force against China.
Why India has not been included so far?
Members think that India is not enough liberalized. India will have to reform the labour laws.
India has to improve on ease of doing business. India has to improve infrastructure, needs
skill development.
Why India is important for APEC?

In the age of global economic slowdown, India is a sweet spot. India is one of the fastest
growing among emerging economies. India is now emerging as a knowledge based
economy. India has become 4th country in Asia, registering for patents. APEC countries can
take advantage of IT sector. India has started implementing trade facilitation agreement of
WTO. India is cutting red tapism by bringing e-governance. India has introduced GST. India’s
ranking in ease of doing business is improving. At present India has stable govt. which brings
certainty of policy.
What will be advantages for India?

 There is a fear of collapse of WTO.

 India has opted out of RCEP
 So far India has FTA with only ASEAN.
India should actively lobby for its membership in APEC otherwise India will be left out.
What is the biggest advantage in APEC?
APEC model – soft regionalism. It is a low risk venture.

What are the prospects?

Poor prospects. APEC countries will expect India to change.
Why poor prospects?
1. Reluctance in India bureaucracy to change.
2. Divisive politics in India
 3. APEC countries want India to liberalize its agricultural sector. In context of farmers
movements, elections, there is hardly any scope.
4. India is fearful because it already has huge trade deficits.
What India should do?

No point being protectionist. Try to be competitive.

What is the ultimate significance?
Joining APEC is a part of India’s grand initiative of Act-East policy. India will become
significant player in the region.

For further reading:

https://www.orfonline.org/research/india-apec-hanging-between-rhetoric-reality-
50561/#:~:text=India's%20growth%20trajectory%20aligns%20with,in%20the%20last%203
0%20years.