Apec looks to fresh model of economic integration
By Waleed PD Mahdini in Singapore

"We are not ready to push for an Asia-Pacific wide free trade area yet, but we are moving in the right direction," said Singapore Prime Minister Lee Hsien Loong, adding, "We are pleased with the US announcement on the Trans-Pacific Partnership, which we see as another entity in furthering the cause of trade liberalisation," during the final media conference yesterday afternoon.

During the Apec leaders meeting, His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam emphasised the need for more economic growth trade opportunities in the Apec region, a call that was echoed by the Sultanate's Apec Business Advisory Council delegates. One of the ways that the monarch recommended was through the Multilateral Agreement on the Liberalisation of International Air Transport as a readily-viable platform to increase air connectivity and push further the growing agreements with the Open Skies policies.

As one of the 21 leaders attending the 20th anniversary celebration of Apec's establishment, His Majesty underscored the importance of fulfilling their promises made in Bogor, Indonesia in 1994, to achieve free and open trade with industrialised economies by 2010 and developing economies by 2020. His Majesty also welcomed the US announcement to engage with the Trans-Pacific Partnership Agreement (TPP) - which Brunei together with three other economies is already a member of - that has been hopefully touted as a useful vehicle to achieving the overriding objective of establishing a Free Trade Area of the Asia Pacific.

His Majesty also addressed the need for preparedness against growing threats to human security, such as newly emerging diseases, natural disasters and terrorism, and stressed the need for capacity building, improving cooperation and coordination to enhance the security and stability of the region.

During a bilateral meeting with the new Prime Minister of Japan on the sidelines of the Apec meeting, His Majesty welcomed Yukio Hatoyama's proposal to convene a ministerial meeting on food security next year, saying that it would help promote technology transfer and best practices to increase production capacity.

The weeklong series of forums, meeting and summits have now wound down to a close in the city-state of Singapore, which played host to the year's Asia Pacific Economic Cooperation (Apec) meeting. "There has been a strong consensus among the leaders to approach our goals for sustainable and balanced growth," highlighted the Singaporean premier as he summarised for the international media what his 20 counterparts deliberated upon.

Earlier yesterday, the 21 leaders of the Pacific Rim organisation issued their annual declaration citing their firm rejection of all forms of protectionism and reaffirmed their commitment to keep markets open, as well as a pledge to refrain from raising new barriers to investment or to trade in goods and services.

"We cannot go back to 'growth as usual', because the challenges are different, the economic landscape is different and so this is why we now require a new economic paradigm," emphasised Prime Minister Lee, echoing the leaders declaration that said: "We need a new growth paradigm. We need a fresh model of economic integration. We will pursue growth that is balanced, inclusive and sustainable, supported by innovation and a knowledge-based economy, to ensure a durable recovery that will create jobs and benefit our peoples."

Despite the undisputable fact that the Asia-Pacific region has now taken the lead on the road to economic recovery as compared to the rest of the world, Apec's dreams of establishing an Asian-Pacific regional free market encompassing some 2.6 billion people could face similar obstacles and resistance that have stalled the Doha trade talks. Seen as a daring initiative undertaken by the Apec economies, the positive engagement by the US in the Trans-Pacific Partnership - comprising Brunei, Chile, New Zealand and Singapore - which is linked with further hopes of expanding it to include Australia, Peru and Vietnam may still be too ambitious a plan to realise its goal of abolishing trade barriers across the diverse 21-member economies. However, even with the membership of the four economies in the TPP, it has laid down the groundwork for establishing a roadmap towards that goal.

Prime Minister Lee acknowledged that the TPP was "this little nucleus, this little seed, which we hope will in time grow into a significant tree and pillar for free trade and cooperation in the Asia-Pacific".

The 21 economic leaders gave consensus to the fact the global economy was recovering but also warned that any failure to rebalance the world's financial system would inevitably lead to future crises. In fact last Thursday, when the Apec finance ministers were asked during their only press conference to sum up in one word or statement, how they would describe the current state of the global economy, it was the eloquent reply by the Chilean Vice Minister of Finance, Maria Olivia Recart, that summed it up best: "It's like going to the dentist, it hurts a lot but you know you are investing for the future. So the world went to the dentist and we are expecting a better growth situation for tomorrow."

This point was driven home further by the leader of the world's biggest economy, US President Barack Obama. "We cannot follow the same policies that led to such imbalanced growth. If we do, we will continue to drift from crisis to crisis, a failed path that has already had devastating consequences for our citizens, our businesses, and our governments. We have reached one of those rare inflection points in history where we have the opportunity to take a different path - to pursue a new strategy for jobs and growth. Growth that is balanced. Growth that is sustainable."

Another issue that received much attention was the leaders' stance towards climate change, just three weeks ahead of the highly-anticipated Copenhagen Climate Conference, that is going to be attended by 192 nations, which will be the successor to the widely-acknowledged disappointment in the form of the Kyoto Protocol.

"We reaffirm our commitment to tackle the threat of climate change and work towards an ambitious outcome in Copenhagen, within the objective, provisions and principles of the United Nations Framework Convention on Climate Change and ensure that efforts to mitigate climate change are consistent with our international trade obligations," the leaders' declaration stated.

But despite acknowledging climate change as "one of the biggest global challenges", what was prominently missing was the complete absence of a tangible target for reducing global gas emissions - although one was included in an earlier draft of the joint statement to halve greenhouse gas emissions by 2050. Instead, an earlier "aspirational target" first used in 2007 to reduce energy intensity - greenhouse gas emissions per unit of economic output - was quoted of at least 25 per cent by 2030.

"Global action to reduce greenhouse gas emissions will need to be accompanied by measures, including financial assistance and technology transfer to developing economies for their adaptation to the adverse impact of climate change," the declaration added, in a bid to lay emphasis of its recognition of the growing campaign by developing countries to pressure rich nations to bear the financial burden of measures to counter global warming.

But, with its main emphasis and focus squarely on trade, it was understood why the thorny, controversial issue of emissions reduction targets had to deleted out of the final declaration, as Apec, being an organisation that operates by consensus, would have encountered more disruptions and friction amongst its 21-members.

Whatever hopes had arisen during the Apec summit were finally dampened when Michael Froman, President Obama's deputy national security adviser for international economic matters, said, "There was an assessment by the leaders that it is unrealistic to expect a full internationally, legally binding agreement could be negotiated between now and Copenhagen which starts in 22 days."

However, it was the chair of the Apec meeting that refocused the meeting's true agenda. "Despite signs of a modest economic recovery, risks remained in the global economy such as unemployment, weak consumption and protectionist pressures. Economic fundamentals such as open markets and free trade remain key to continued prosperity." - Borneo Bulletin (16th November 2009)