Chen-Sheng Ho, Ph.D. Associate Research Fellow Chinese Taipei APEC Study Center TIER

 Describe APEC’s work in enhancing REI.  Examine the APEC-ASEAN+N-TPP triangular relationship.  Provide suggestions for Taiwan’s participation.

Free Trade Area of the Asia-Pacific (FTAAP)  In 2004, members of ABAC Canada proposed the creation of the FTAAP.  In 2006, APEC Leaders stated that the FTAAP could be a long- term goal.  In 2009, ABAC urged APEC to start negotiations on the FTAAP and Leaders to decide on a framework by 2010 Summit.

Key Areas of REI for APEC 2010: SOM1 Document 1. Accelerating REI:  Promote convergences in key areas: services, digital economy, investment, trade facilitation, rules of origin, and standards/technical barriers to trade.  Implement APEC environmental goods and services (EGS) work. 2. Improving the Business Environment:  Implement Leaders’ instruction on an APEC-wide improvement of 25% in five key areas of doing business by  Develop a post-LAISR agenda (structural reform).  Strengthen intellectual property rights (IPR).

Key Areas of REI for APEC 2010: SOM1 Document 3. Enhancing Regional Connectivity and Trade Facilitation:  Promote supply chain connectivity.  Promote digital connectivity.  Develop Authorized Economic Operator (AEO) programs.

 The work can be divided into two parts: FTAAP and Key Areas of REI.  FTAAP is direct and strong integration.  REI Key Areas are indirect and weak integration or just cooperation.  Integration means building a larger unit.  Cooperation means creating mutual benefits.

U.S. Views: “Asia-Pacific Regional Economic Integration and Architecture” by Dr. Fred Bergsten, Peterson Institute for International Economics, March 25, 2010  Asia-Pacific Bloc versus Asian Bloc  Asia-Pacific Bloc: APEC, TPP (Trans-Pacific Partnership); U.S. influential  Asian Bloc: ASEAN+N; China influential  Stress the need to move in parallel.  TPP: 1 st step to Asia-Pacific integration.  The addition of Canada, Malaysia, Japan, and Korea to the TPP (P8) would certainly create a critical mass.  TPP leads to FTAAP; Bogor Goals=FTAAP

ASEAN Views:  ASEAN+N: China, Japan, South Korea, India, Australia and New Zealand.  Possible ASEAN+8 (ASEAN+6+U.S.+Russia): Meet on sidelines of APEC meeting held in Asia.  ASEAN+N: ASEAN wants to be the driver.  Asian Bloc (ASEAN+N): More important than Asia-Pacific Bloc (APEC, TPP)

Triangular Relationship Analysis:  The U.S. position is important because it is willing and able to influence outcomes.  The U.S. would continue to promote APEC because it represents the Asia-Pacific Bloc.  The U.S. could transform TPP (P8) into a larger TPP (Canada, Malaysia, Japan, Korea).  The U.S. could support more APEC economies to join TPP by 2020, if APEC endorses the idea that TPP equals FTAAP and FTAAP equals Bogor Goals.  ASEAN would focus on Asian Bloc first and then the Asia- Pacific Bloc.  China would support Asian Bloc first (ASEAN+China) and then Asia-Pacific Bloc.  Japan and Korea would continue to support both blocs without preference but may change with clearer benefits.

 Support the Clarification of the Bogor Goals, so as to strengthen APEC. Specifically, what is free and open trade and investment?  Support the idea that Bogor Goals equal FTAAP, if it is heard, so as to promote FTAAP.  Support the U.S. proposal to describe the TPP (P8) negotiations and membership enlargement at the 2010 MRT Meeting in June.  Promote Taiwan’s participation in the 2010 Bogor Goals’ assessment, so as to show Taiwan’s support for free trade and to increase the possibility of joining TPP.  Continue to participate actively in APEC and to promote the idea that APEC initiatives must include all APEC members.