Pacific Currents

Judit Fabian
Visiting Researcher, Graduate School of Public and International Affairs, University of Ottawa

International trade is often framed in starkly divergent terms: either economies choose multilateral trade agreements (MTAs) and advance the cause of global economic liberalization, or they choose preferential trade agreements (PTAs) and put the entire system at risk. Canada has a long track record of pursuing PTAs and with the Trump administration’s opposition to multilateralism, and longstanding opposition in elements of the Republican and Democratic parties, this trend will likely continue. The question is whether progress will come at the expense of the global trade system.

Some economists believe PTAs to be trade-diverting, reducing trade with more efficient producers outside the agreement. Others insist that PTAs can create trade by shifting production to lower-cost producers in one of the participating economies. One prominent contrary argument holds that PTAs lead to discontinuities in tariff regimes between economies and regions, increasing transaction costs, disrupting supply chains, creating opportunities for corruption and harming global welfare, especially in developing economies.

Ippei Yamazawa
Professor Emeritus, Hitotsubashi University, Japan

This year Indonesian host has tried to highlight the Bogor Goals so that we have been invited to report directly our IAP review study at Committee for Trade and Investment (CTI) Workshop in Medan, ABAC3 in Kyoto, and ASCC in Jakarta, that is all tripartite stakeholders , officials, business, and academics in July. By and large our report was welcomed and mentioned in the recommendation letters by the last two to the APEC Leaders.

Dr. Manfred Wilhelmy
Chairman CHILPEC (Chilean National Committee for Pacific Economic Cooperation)

The Pacific Alliance (PA) was established in Lima, Peru in April 2011. The founding members were Peru, Mexico, Colombia and Chile, represented by their Presidents Alan García, Felipe Calderón, Juan Manuel Santos, and Sebastián Piñera, respectively. The new Mexican President, Enrique Peña Nieto, has given his full support to the initiative.

Observers to the PA include Panama (which may become a full member), Costa Rica, Uruguay and Guatemala, among Latin American economies. Outside of Latin America, Canada, Australia, New Zealand, and Japan are important Pacific nations that have joined as observers.