The 62nd meeting of "Diplomatic Roundtable" on "Advancing APEC's Growth Strategy under Japan's Leadership" Held

JFIR and its two sister organizations, the Global Forum of Japan and the Council on East Asian Community, taking advantage of an occasion of a visit to Japan of a prominent person on international and other affairs, monthly organize a "Diplomatic Roundtable" meeting, which is an informal gathering of members of the three organizations for a frank exchange of views and opinions with the visiting guest. The 62nd "Diplomatic Roundtable" was held on 15th October 2010 on the topic of "Advancing APEC's Growth Strategy under Japan's Leadership." An outline of the presentation by Julius Caesar PARRENAS, Advisor for International Affairs, The Bank of Tokyo-Mitsubishi UFJ, and Senior Advisory Fellow, Institute for International Monetary Affairs, was as follows:

Since APEC was established 21 years ago in 1989, the 1995 Osaka Summit has been considered an important milestone. At that meeting, APEC adopted the “Osaka Action Agenda,” whereby instead of trade negotiations, each member economy would voluntarily commit to unilaterally and progressively reduce trade barriers over the next several years in order to reach the Bogor Goals, which set the target dates for realizing free and open trade and investment; 2010 for rich economies, 2020 for developing economies. The “Agenda” was a landmark in APEC, where member economies reached agreement on a strategy, based on the three pillars of liberalization, facilitation, and economic-technical cooperation. Consequently, the region achieved significant gains. Average tariffs for all products have been slashed by 41% compared to 1995, trade in goods and services tripled, and the stock of inward foreign direct investment increased 4.5 times.

This November’s 18th APEC Summit in Yokohama will add two new elements to APEC’s agenda – the “Free Trade Area of the Asia-Pacific (FTAAP),” and the “Growth Strategy.” The FTAAP is a new framework for creating a free trade area throughout the Asia Pacific region. APEC is now considering such a framework in view of the repeated failure of the Doha Round to take off and the proliferation of bilateral and sub-regional free trade agreements within the region. The Growth Strategy will require APEC to more broadly address issues related to finance, environment, energy, infrastructure and other fields, in addition to its traditional agenda of trade and investment. APEC needs such a strategy to help restore the world economy's diminished growth potential to pre-crisis levels by way of expanding consumer demand in East Asian emerging markets. For that purpose, there is a need to accelerate the expansion of the region’s middle class.

The incorporation of the FTAAP and the Growth Strategy in APEC’s agenda is significant both for the Japanese economy and APEC. Japan has a mature economy and aging population, which will limit the potential of domestic demand as a source of future growth. Japan's best hope for continued prosperity lies in further expanding its presence in a dynamic Asia. On the other hand, the world economic crisis has reawakened protectionist sentiments, which now threaten the global trading system and APEC's vision of free and open trade. Transforming East Asia into a new growth engine of the world economy is a key to rebuilding a sound trading system and making FTAAP a reality. Just as Japan's leadership in Osaka made APEC's achievements of the last fifteen years possible, the coming APEC Summit in Yokohama will be another important opportunity for Japan to take the leadership in bringing APEC successfully to a higher stage of development.

 

The Japan Forum on International Relations (JFIR)

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