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SINGAPORE: The Policy Support Unit of APEC said on Monday membership of the grouping alone has brought benefits to trade, and these are comparable with those of a free trade agreement, even without a binding agreement.
Publishing its findings as the APEC meetings in Singapore get underway, the unit noted that there is a high degree of de facto integration between members, despite APEC's less formal nature.
According to the unit's report unveiled on Monday, APEC members now trade with each other more than they do with other free-trading-agreement partners. There is also much more trade between partners who are both members of APEC and the World Trade Organisation.
Philip Gaetjens, director of APEC Policy Support Unit, said: "We found that taking into account everything, APEC itself was a positive effect on trade. It increased the likelihood of trading to three times between an APEC member and another APEC member compared to (that between) an APEC member and a non-member. So that's quite a positive result there."
The findings are further supported by a five-fold increase in trade within APEC since its establishment in 1989.
Trade within the APEC region now accounts for two-thirds of the grouping's total trade. This is a larger intra-regional share of trade than that in the 27 nations of the European Union. The result is clearly good news for businesses in APEC.
Mr Gaetjens said: "We are certainly in an emerging recovery from the previous turmoil, and what we want to make sure of is that the benefits continue to grow, because more benefits from trade and more growth means more jobs, higher wages, higher productivity, higher competition, more choices for consumers. So it's a win-win for everyone."
The unit said member economies have virtually eliminated tariffs and continue to find ways to reduce trade barriers.
In their meeting on Monday, the business community and APEC officials explored the possibility of a Free Trade Area in the Asia-Pacific (FTAAP).
One area they are working on is the integration of logistical networks between APEC members.
Teng Theng Dar, chairman of APEC Business Advisory Council, said: "In the business community, everyone knows that if you are not well connected in terms of logistics, if you do not have a logistics solution, then trade will not happen. When trade won't happen, investment won't happen. So I think this is something that is a work in progress."
He also added that logistics integration between members would also help boost the efforts of small firms to expand outside their domestic markets.
- CNA/ir
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