2. Agenda
Introduction
History
Objective
Member Economies
APEC relations
Demographics
APEC Structure
Bogor goals
How APEC operates
APEC summits
Strengths & weaknesses
Achievements
Implications for MNE’s
3. APEC Forum
APEC is the premier forum for facilitating economic growth, cooperation, trade and
investment in the Asia-Pacific region.
It is an inter-governmental forum, which operates on the basis of non binding commitment
and open dialog.
No treaty obligations
APEC has 21 member economies with a population of over 2.6 billion which accounts for
more than 40% of the world’s population.
APEC countries have a combined GDP of 21 trillion US dollars which is more than half of
world GDP.
APEC accounts for nearly half of world trade.
4. Member Economies
* Australia * Malaysia
* Brunei Darussalam * Mexico
* Canada * New Zealand
* Chile * Papua New Guinea
* People's Republic of China * Peru
* The Republic of the Philippines * Hong Kong, China
* The Russian Federation * Japan
* United States of America * Indonesia
* Chinese Taipei * Singapore
* Republic of Korea * Viet Nam
5. History of APEC
APEC begins as an informal Ministerial-level dialogue group in Canberra, Australia in 1989. It
is a 21 member economic forum at present.
Founding members are
Australia, New Zealand
6 ASEAN economies
Japan and South Korea
Canada and the United States
Later the co-operation expanded to China, Taiwan, & Hong Kong in1991 Mexico &
Papua New Guinea in 1993 ,Chile (1994 ) , Russia, Vietnam, Peru in 1998.
India, Mangolia, Pakistan, Laos, Bangladesh, Costa Rica, Colombia, Panama and Ecuador
are among a dozen countries seeking membership in APEC.
6. Mission and Vision
To support sustainable economic growth and prosperity in Asia-Pacific region
To build a dynamic and harmonious Asia-Pacific community
Decrease number of obstacles in trade and also reduce tariffs across APEC nations
Set it’s eye on achieving ‘Bogor goals’ by the year 2010
To encourage the flow of goods, services, capital, and technology
To develop and strengthen the multilateral trading system; and
7. APEC Relations
ASEAN and APEC
ASEAN has been at APEC's core from the very beginning and is doing its part to advance
APEC's purposes and is consistent with APEC goals.
ASEAN Free Trade Area (AFTA) can be said to be a building block for the fulfillment of the
goals that APEC set for eventual free trade among its members.
It can be said that the two organizations could be seen as complementing, and not
competing with each other.
NAFTA and APEC
Accomplishment of Bogor goals and free trade among APEC member economies leads to
significant trade diversion from western countries to APEC member economies.
Western economies trying to maintain balance of power between east and west in APEC
decisions by restricting Asian countries into economic co-operation.
8. APEC and India
India tried for membership in APEC. It was initially supported by United States, Japan
Australia but was denied later.
India would have been had an undue advantage in trade if it is a member of APEC.
Reasons :
o Decision was made not to admit more members until 2010 till Bogor goals are accomplished.
o India does not border the Pacific Ocean, which all current members do
o There is a concern among Western countries that India's entry might tilt the balance of
power shifts in favour of India.
12. APEC Secretariat
APEC secretariat operates as the core support mechanism for the APEC process.
It provides coordination, technical and advisory support as well as information management,
communications and public outreach services.
It performs a central project management role
It is based in Singapore
The APEC Secretariat is headed by an Executive Director and a Deputy Executive Director
Muhamad Noor Yacob is the present Executive Director
13. BOGOR GOALS
APEC Economic Leaders' Declaration Of Common Resolve (1994)
Free and open trade and investment in the Asia-Pacific
by 2010 for developed economies
by 2020 for developing economies
14. THREE PILLARS
Three specific areas crucial to achieving the Bogor Goals:
Trade and investment liberalization
Business facilitation
Economic and technical cooperation
15. Trade and Investment liberalization
Reducing and eliminating tariff among member countries
Reducing and eliminating non-tariff barriers to trade and investment
Opening of markets
Achievements :
1) Changes in the global trade of APEC industrialized and volunteering economies.
16. Cont ..
2) Stocks of inward and outward FDI in
APEC industrialized and volunteering
economies.
3) Real GDP/capita for APEC industrialized
economies and volunteering economies
17. Business facilitation
Reducing the costs of business transactions
Improving access to trade information
Bringing into line policy and business strategies to facilitate growth
Free and open trade
Achievements :
1. The Single Window Strategic Plan, adopted in 2007, provides a framework for the
development of Single Window systems which will allow importers and exporters to
submit information to government once, instead of to multiple government agencies,
through a single entry point.
18. Cont ..
2. As a result of the APEC Trade Facilitation Action Plan (TFAP I) the cost of business
transactions across the region was reduced by 5% between 2002 and 2006.
3. In 2008, a groundbreaking Investment Facilitation Action Plan was endorsed which
aims at improving the investment environment in Member Economies.
4. The APEC Business Travel Card (ABTC) provides substantial time and cost savings to
business people and facilitates their travel in the region, by allowing visa free travel
and express lane transit at airports in participating economies.
19. Economic and technical cooperation
ECOTECH is dedicated to providing training and cooperation to build capacities in all APEC
Member Economies to take advantage of global trade.
This area builds capacity at the institutional and personal level to assist APEC Member Economies
and its people gain the necessary skills to meet their economic potential.
Achievements :
APEC's Economic and Technical Cooperation (ECOTECH) activities are designed to build
capacity and skills in APEC Members at both the individual and institutional level, to enable
them to participate fully in the regional economy and liberalization process
Since APEC first began to undertake capacity building work in 1993, more than 1200 projects
have been initiated; and in 2008, APEC was implementing a total of 212 capacity building
projects with a total value of US$13.5m.
A network of 41 APEC Digital Opportunity Centers (ADOC) now operate in seven Member
Economies.
20. APEC BUSINESS ADVISORY COUNCIL
1995 with the aim of providing advice to the APEC Economic Leaders on ways to
achieve the Bogor Goals
Each economy nominates up to three members from the private sector to ABAC
These business leaders represent a wide range of industry sectors
21. HOW APEC OPERATES
APEC operates as a cooperative, multilateral economic and trade forum.
It is a voluntary association in which participants do not cede powers of regulation or
enforcement to a supra-national institution;
Every year one of the 21 member economies plays host to APEC meetings,
Serves as the APEC Chair
Chairs the annual economic Leaders meeting & ministerial Meetings
Fills Executive Director of the APEC Secretariat.
22. CONT ..
Member Economies take individual and collective actions to open their markets and
promote economic growth
Activities are centrally funded by small annual contributions from member Economies
Member economies provide considerable resources to assist in the operations
APEC’s project database contain all project related information
23. ANNUAL MEETINGS OF THE ASIA-
PACIFIC ECONOMIC COOPERATION
Summit Year Place Summit Year Place
1 1989 Australia 13 2001 People's Republic of China
2 1990 Singapore 14 2002 Mexico
3 1991 Republic of Korea 15 2003 Thailand
4 1992 Thailand 16 2004 Chile
5 1993 United states 17 2005 Republic of Korea
6 1994 Indonesia 18 2006 Vietnam
7 1995 Japan 19 2007 Australia
8 1996 Philippines 20 2008 Peru
9 1997 Canada 21 2009 Singapore
10 1998 Malaysia 22 2010 Japan
11 1999 New Zealand 23 2011 United states
12 2000 Brunei Darussalam
24. STRENGTHS OF APEC
A supporter of the of the multilateral trade negotiations, apply pressure to key
countries, suggest visionary initiatives and monitor compliances.
APEC has considerable experience in the reform process and can act as a
model or demonstration to the rest of the world.
APEC is a large group of countries that could be extremely influential if
adopted a common approach and joint bargaining objectives.
25. WEAKNESSES OF APEC
Absence of priorities- The effort in trade reform within APEC has been
diffused across too many areas and there is need for more focus.
Shortfalls in member commitments- Many countries have gone no further
than their existing pledges.
Weak evaluation procedures- there is lack of outside scrutiny of individual
members’ progress in implementing reforms
Dearth of specific APEC incentives- APEC operates by consensus and there is
no mechanism for enforcing group decisions.
26. IMPLICATIONS FOR THE MNES
Share in World GDP,
The group of five APEC industrialized 2011
economies — Australia, Canada, Japan, New
Zealand and United States — has made good
progress towards the Bogor Goals of free and
open trade and investment by 2010.
Contributions to Global GDP
Growth
The 21 APEC members account for 55 percent of
world GDP; 45 percent of global trade; and 40
percent of the world’s population. Sixty percent
of U.S. goods exports go to APEC economies.
27. IMPLICATIONS FOR THE MNES
The industrialized economies have
• cut tariffs
• increased the proportion of goods imported tariff free
• reduced non-tariff measures
• opened up services trade
• liberalized investment and
• actively promoted greater trade and investment through facilitation initiatives.
• The average applied tariff rate for the industrialized economies fell from 7.0 per cent
in 1996 to 3.9 per cent in 2008.
• The share of imports entering duty free has increased from 42.6 per cent in 1996 to
60.1 per cent in 2008.
28. IMPLICATIONS FOR THE MNES
• The assessment of progress has highlighted the areas where more work is needed, including
in the reduction of high tariffs and trade-distorting non-tariff measures on agricultural and
textile, clothing and footwear products, and an increased focus on services and investment.
• The gathering pace of globalization poses real challenges for trade and economic policy
makers in the region.
• Global dynamics have created the impetus for APEC economies to tackle a broader set of
issues in their efforts to foster and reap the gains from greater economic integration.
