ASIA PACIFIC ECONOMIC PARTNERSHIP (APEC)
WHY IN NEWS?
- Soon there is going to be APEC group meeting in San Francisco.
WHAT IS APEC?
- The Asia-Pacific Economic Cooperation (APEC) is a regional economic forum established in 1989 to leverage the growing interdependence of the Asia-Pacific.
- The word ‘economies’ is used to describe APEC members because the APEC cooperative process is predominantly concerned with trade and economic issues, with members engaging with one another as economic entities.
- The idea of APEC was firstly publicly broached by former prime minister of Australia Bob Hawke during a speech in Seoul, Korea, on 31 January 1989.
- Ten months later, 12 Asia-Pacific economies met in Canberra to establish APEC.
- The founding members were Australia; Brunei Darussalam; Canada; Indonesia; Japan; Korea; Malaysia; New Zealand; the Philippines; Singapore; Thailand; and the United States.
AIM OF THE GROUP:
- 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 was formed to encourage a growing and prosperous regional economy through:
- trade and investment liberalisation and facilitation – at the border, across the border and behind the border
- reduced costs of cross-border trade to assist businesses
- economic and technical cooperation
- exchanges of best practice information on trade and investment
- simplified regulatory and administrative processes
- improved institutional capacity to implement and take advantage of the benefits of trade and investment reform.
CURRENT MEMBERS OF THE GROUP:
- The current members of the grouping are Australia, Brunei, Hong Kong (which the APEC website refers to as Hong Kong, China), New Zealand, Papua New Guinea, the Philippines, Indonesia, China, Japan, South Korea, Russia, Canada, the United States, Mexico, Peru, Chile, Malaysia, Vietnam, Singapore, Thailand and Chinese Taipei (Taiwan).
- The grouping’s focus is on economies, rather than countries, which is why Hong Kong and Taiwan, which China claims as its own, participate separately.
IMPORTANCE OF APEC GROUP:
- According to a Reuters report, APEC accounts for about 62% of global GDP and almost half of global trade.
- It operates on the basis of non-binding commitments with decisions reached by consensus and commitments undertaken on a voluntary basis.
ACHIEVEMENTS AND BENEFITS OF THE GROUP:
- APEC has grown to become a dynamic engine of economic growth and one of the most important regional forums in the Asia-Pacific.
- Its 21 member economies are home to around 2.95 billion people and represent approximately 62 percent of world GDP and 48 percent of world trade in 2021.
- As a result of APEC’s work, growth has soared in the region, with real GDP increasing from USD 19 trillion in 1989 to USD 52.8 trillion in 2021.
- Meanwhile, residents of the Asia-Pacific saw their per capita income rise almost fourfold, lifting millions out of poverty and creating a growing middle class in about three decades.
- Bringing the region closer together, reducing trade barriers, and smoothing out differences in regulations have boosted trade which, in turn, has led to this dramatic increase in prosperity.
- Average tariffs fell from 17 percent in 1989 to 5.3 percent in 2021.
- During that same time period, the APEC region’s total merchandise trade increased over nine times—outpacing the rest of the world with more than two-thirds of this trade occurring between member economies.
- APEC implements a wide variety of initiatives to help integrate the region’s economies and promote trade while addressing sustainability and social equity.
- At the border, APEC economies have centralized export-import processes online, accelerating the time it takes for goods to travel across borders, known widely as Single Window.
- SINGLE WINDOW is virtual system that links all government agencies involved in the export-import process, allowing companies to submit documents electronically one time from anywhere.
WHY INDIA IS NOT THE MEMBER OF APEC?
- India had made a request to join the grouping in 1991, the year which saw the introduction of liberalisation and entirely changed the shape and trajectory of the Indian economy.
- While a majority of members are in favour of India’s inclusion, some have opposed it, citing the country’s record on economic reforms and claiming that it has’ protectionist instincts’.
- India was denied APEC membership in 2007 on the ground that its economy was not integrated into the global system.
- Another reason for India not being included in the grouping was a membership freeze, which was in force since 1997 but was not extended in 2012.
- APEC members do not view India’s politics and policies as supportive of wide regional integration and wider trade options.
- The rise of India as one of the global economic power and its changing regional economic and political influence necessitates that India is included in APEC.
- APEC might also consider changes to its current decision-making processes to mitigate concerns among current members that expanding membership would dilute the forum’s impact.
SYLLABUS: MAINS, GS-2, INTERNATIONAL RELATIONS
SOURCE: INDIAN EXPRESS