APEC - Establishment and 2014 China summit highlights

APEC – Establishment and 2014 China summit highlights

Question - Write a note on APEC and highlight major happenings of the summit.

Asia-Pacific Economic Cooperation (APEC)

- A forum for 21 Pacific Rim member economies

- It seeks to promote free trade and economic cooperation throughout the Asia-Pacific region.

- Establishment- 1989

- Association of Southeast Asian Nations (ASEAN) opposed the initial proposal, instead proposing the East Asia Economic Caucus which would exclude non-Asian countries such as the United States, Canada, Australia, and New Zealand.

- First Summit - Australia

Why APEC was established?

1. To fulfill the growing interdependence of Asia-Pacific economies and the advent of regional trade blocs in other parts of the world

2. To combat influence highly industrialized Japan to dominate economic activity in the Asia-Pacific region

3. To establish new markets for agricultural products and raw materials beyond Europe.

4. To explore new export market opportunities for natural resources such as natural gas,

5. To seek regional economic integration (industrial integration) by means of foreign direct investment.

- APEC includes 40% of the world's population, with member countries accounting for about 44% of global trade and more than half of global economic output.

- The criterion for membership is that the member is a separate economy, rather than a state. So,membership of the forum includes Taiwan, Hong Kong.

- India has requested membership in APEC, and received initial support from the United States, Japan and Australia. Bu hurdle in membership is that India does not border the Pacific Ocean, which all current members do.

- Members - Australia, Brunei Darussalam, Canada, Chile, China, Hong Kong-China, Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Chinese Taipei, Thailand, United States, and Vietnam

- Observers - APEC also includes three official observers: ASEAN, the Pacific Islands . However, India was invited to be an observer for the first time in November 2011.

Summits

- 2014 – China

- Important things during 2014 Summit:-

1. China would peak their carbon emissions by 2030 and strive to achieve 20% of its energy from sources that do not produce carbon emissions. This agreement marks the first time that China agreed to peak its carbon emissions

2. The United States would cut their 2005 carbon emissions by 26% to 28% by 2025

3. The APEC summit agreed to launch a study into the FTAAP which is seen as rival to the US which is currently negotiating a separate Trans-Pacific Partnership (TPP)

TPP is considered part of US's "pivot" towards Asia - ensuring continued US influence in the region in response to growing Chinese power. The TPP involves 12 countries, but not China or Russia.

- 2015 Summit – Manila , Philippines

TPP Vs FTAAP Vs RCEP

Trans-Pacific Partnership

- 12 Pacific Rim countries
- Backed by US, includes Japan, excludes China and Russia
- Could account for more than a third of world economic output
- Part of US's "pivot" towards Asia policy

Free Trade Area of the Asia-Pacific

- Longer-term project, first proposed in 2004
- Backed by China, includes major economies
- China says would provide greater economic boost than TPP

Regional Comprehensive Economic Partnership (RCEP)

- Member states of ASEAN and the six states with which ASEAN has existing FTAs (Australia, China, India, Japan, South Korea and New Zealand).

- Excludes US

- Negotiations were formally launched in November 2012