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RTAs/FTAs: a Cross-Cutting Issue for APEC

APEC Economic Leaders and Ministers have given increasing recognition to the important role Regional Trading Agreements (RTAs) and Free Trade Agreements (FTAs) can play in trade liberalisation in the APEC region. In November 2005, APEC Leaders declared the promotion of high-quality RTAs and FTAs as an element of the Busan Roadmap towards the Bogor Goals. Leaders committed APEC to developing model measures for as many commonly accepted FTA chapters as possible by 2008. This initiative will build upon the APEC Best Practices for RTAs/FTAs, which currently serve as a useful guide for APEC members when undertaking RTA/FTA negotiations.

Achievements

In 2007, work on promoting high quality RTAs/FTAs continued under the guidance of the APEC Committee on Trade and Investment (CTI) to develop additional Model Measures for RTAs/FTAs, building on the seven sets of model measures endorsed in 2005 and 2006. Substantial progress was made on all 11 sets of model measures carried over from 2006 and 3 sets of model measures were endorsed at the 2007 APEC Ministers Meeting in September 2007: Electronic Commerce, Rules of Origin and Origin Procedures and Sanitary & Phyto-sanitary measures.

The business community and APEC Senior Officials share the conclusion that while the measures will be non-binding, the Model Measures exercise can help address the "noodle bowl" problem of a mixture of FTA/RTA provisions making the process of trade liberalization and the conduct of business across the APEC region more complicated than it needs to be.

A further 3 sets of model measures in the following areas: competition policy, environment and temporary entry of business people were endorsed at the 2008 APEC Ministers for Responsible for Trade (MRT) on 31 May to 1 June in Arequipa. Senior Officials also approved the draft model measure on customs administration and trade facilitation developed by ABAC as part of the package of RTA/FTA model measures for 2008.

A Senior Official-level Policy Dialogue on RTAs and FTAs, an annual event, was held on 27 May 2008. This year the Dialogue focused on the findings of the studies on Identifying Convergences and Divergences in APEC's RTAs/FTAs undertaken by Peru in collaboration with Inter-American Development Bank (IADB) and other lead economies (Chile, Japan, New Zealand and the United States). The studies covered the following chapters: market access, rules of origin, customs procedures, environment, investment, trade remedies; competition policy; services, sanitary and phytosanitary measures, technical barriers to trade and labour contained in the 30 FTAs subscribed or concluded among APEC economies. The comparative analysis attempts to provide a broad and deep overview of trade liberalization in APEC and, at the same time, serves as a guide tool for future negotiations. SOM concluded that the process of harmonization of agreements in the Asia Pacific is an issue of great importance, particularly for small and medium enterprises to benefit from trade liberalization. The Dialogue also included a session on docking and merging of FTAs which followed from the outcomes of a CTI-level Trade Policy Dialogue (TPD) on Enlargement, Docking and Merging of FTAs held on 24 May. The CTI-level TPD was aimed at helping members to have a better understanding of the technical and policy issues at hand, thereby enabling the CTI to have a good discussion on the next steps that it might do on this work both at the CTI level as well as in relation to the ongoing work at SOM level.

Current Activities

Work will therefore continue on 5 remaining draft chapters covering texts carried over from 2006 (safeguards; investment; anti-dumping; and subsidies and countervailing measures; and trade in services) with the aim of completing them by 2008 as mandated by Leaders in 2005.

In Sydney, September 2007, APEC Economic Leaders welcomed and endorsed report from APEC Ministers on ways to promote further economic integration in the Asia-Pacific region. This report was prepared in response to Leaders' instructions in Ha Noi last November to "undertake further studies on ways and means to promote regional economic integration, including a Free Trade Area of the Asia-Pacific as along term prospect and to report to the 2007 APEC Economic Leaders' Meeting in Australia."

APEC Leaders have asked Ministers and officials to carry forward this work and report back to the AELM in 2008 with a summary of steps taken to promote regional economic integration. The report outlines a wide range of actions aimed at strengthening work towards regional economic integration among APEC economies. Specifically, APEC economies have committed to strengthen APEC's work promoting high-quality, comprehensive RTAs and FTAs that open markets and promote economic integration while seeking to promote consistency among agreements and maximise their trade and economic benefits.

Senior Officials agreed on a matrix which provides an implementation framework for all 53 regional economic integration agreed actions and identifies the following key dozen deliverables to be completed for 2008:

Strong support from APEC Economies to bring the Doha Round to a successful conclusion in 2008;
Progress on Busan Road Map and Hanoi Action Plan to achieve Bogor Goals.
Compilation of a preliminary inventory of issues relevant to a Free Trade Area of the Asia-Pacific (FTAAP);
Completion of the initial tranche of a study on identifying convergences and divergences in APEC RTAs/FTAs;
Completion of a review of existing analysis relevant to a possible FTAAP.
Explored issues to be considered in the enlargement, docking and merging of existing agreements and recommended next steps;
Completion of APEC Model Measures for RTAs and FTAs;
Completion of a study on bilateral investment agreements in order to develop a set of APEC principles for investment agreements;
Completion of Key Performance Indicators for the second Trade Facilitation Action Plan (TFAPII);
Completion of an APEC Investment Facilitation Action Plan;
A successful Ministerial Meeting on Structural Reform; and
Successful establishment of an APEC Policy Support Unit.

Friends of the Chair (FOTC) groups on regional economic integration have been set up both at the CTI and Senior Officials levels to oversee the work. The SOM-level FOTC will assist the Senior Officials with the preparation of a report for APEC Ministers to consider in November on progress in the implementation of these Agreed Actions that will include a future work plan. The CTI-level FOTC will liaise with the relevant sub-fora and focus/prioritise its work on the many REI actions which relate to work undertaken in the CTI and its sub-fora. The CTI-FOTC has agreed to focus its initial work in 3 areas: Rules of Origin (ROOs); Convergences/Divergences of FTAs; and Docking, Merging and Enlargement of FTAs. A half-day Trade Policy Dialogue on the effects of ROOs on trade is being planned to take place in August 2008.

Capacity building workshops or policy dialogues or symposia will also continue to be conducted at the CTI/CTI sub-forum level, allowing exchanges between government officials and FTA negotiators on best practice and strengthening FTAs in the region.

Free Trade Agreements and Regional Trading Agreements - Key Contacts

APEC Secretariat
Ms Catherine Wong
Director (Program)
E-mail: cw@apec.org