APEC beyond 2020

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As APEC approaches the end of its third decade, the global and regional, geopolitical and economic environments are beset by a mix of disruptive forces. Their collective impact is unprecedented. To uneven economic growth, a downturn in world trade and a surge in protectionist trends, must be added deep concerns about rising inequality within many societies and disenchantment over the benefits of globalization and closer integration.

 

OBJECTIVE

The outcome of this signature project will form the basis of PECC’s input to the process of dialogue and consultation that will shape APEC’s vision and the content and nature of its work program beyond the close of the period specified in the Bogor Goals, and for some decades thereafter. The primary participants in that process are senior officials, ministers, leaders and ultimately the governments and people of APEC member economies. However, because of its tripartite composition, and its long-standing and respected engagement in issues underpinning Asia-Pacific economic development, PECC is uniquely placed to make a substantive offering to discussions and decisions about APEC’s long-term future.

BACKGROUND

From PECC’s standpoint, the opportunity to contribute through this project to the goal of refreshing and perhaps refashioning APEC, is well-timed. It is unarguable that, as APEC approaches the end of its third decade, the global and regional, geopolitical and economic environments are beset by a mix of disruptive forces. Their collective impact is without precedent in the previous thirty years of APEC’s existence. To uneven economic growth, a downturn in world trade and a surge in protectionist trends, must be added deep concerns about rising inequality within many societies and disenchantment over the benefits it has been argued all would gain from globalization and closer integration.

The defining task for APEC in this volatile context is to respond in ways that hold real meaning and demonstrate that the institution is able to move with the times. Assessing concerns about free trade and regional economic cooperation is therefore crucial. It is assumed one enduring fundamental consideration for member economies is that they will wish APEC to remain a non-negotiating and consensus-based forum. The likelihood that APEC will continue to hold that status indefinitely lends even greater weight to efforts to maintain and strengthen its role as ‘an incubator of credible and innovative ideas and proposals for the future’.

The PECC signature project will bring diagnostic rigor to answering the question inherent in an APEC stock-take: where expected deliverables have been only partially achieved to date, to what extent could this be attributed to shortcomings in policy settings? Or could under-achievement be blamed not on conceptual underpinnings but rather issues to do with faulty regime design and implementation? How might policy settings need to be adjusted in future to address the challenges posed by the combination of disruptive forces now faced by the region? In that regard, the anticipated broad-based review of APEC’s post-2020 aspirations, modus operandi and priorities, of which PECC’s input will be a significant part, should be the catalyst for enhanced region-wide and economy-specific policy settings designed to achieve more equitable and inclusive trade, economic growth and employment opportunities. 

 

NEW GROWTH DRIVERS

It is important that PECC members agree on the parameters of the signature project, given that the scope of APEC’s mandate now extends far beyond the realization of ‘free and open trade and investment’ that lies at the heart of the Bogor Goals. It was inevitable, as Asia-Pacific economic integration proceeded, that increasing complexity would appear as ‘new generation’ issues emerged to be dealt with.

As a consequence, it has become increasingly difficult to grasp the full policy dimensions of APEC’s agenda without acknowledging the place and commercial impacts in modern economies of core aspects such as digital trade and e-commerce, competitive markets, connectivity and connectedness, disruptive technology, interrelated growth, innovation, the functioning of supply chains and production networks, regulatory coherence, and the role of the services sector. In the critically important policy field of structural and regulatory reform, what future weighting should be given to the evolution of competition policy, and to new approaches to the regulation of health, safety and the environment and to other societal objectives such as security?

The signature project will be tasked to identify the cluster of key drivers of future regional growth that is inclusive and sustainable. Present trends suggest that group of key factors will highlight, among other stimulants, the increasing significance of the digital economy, investment, services, and the impact of non-tariff measures. Acknowledging the influence of those factors in the signature project, will enhance the commercial relevance of PECC’s contribution and its appeal to the business community.

The challenge of understanding what the central features of APEC’s work streams will be in future and where they interact, is compounded because the relationship among the critical growth factors is not static. It evolves over time, and the relative importance of different elements is not fixed but fluid. That point draws attention to an important consideration about this PECC project; namely, the need to avoid the temptation of concentrating largely or solely upon the present and the known. Instead, the project will have to maintain a balanced focus between what is current, how today’s situation might respond to change forces over the decade beyond 2020, and finally attempt as realistic as possible a forecast of how the contours of the region’s economic and social landscape may have been reshaped by, say, 2045. The latter, most distant and ambitious forward projection, will seriously test the ability of member committees to envision the long-term pervasive effects of transformative technology (the ‘internet of things’) now beginning to dominate work stations and the marketplace.

The success of the project and scoping out an agenda for APEC to meet the challenges will depend on active participation by all PECC member committees. It will be essential that, when approached by the project managers or designated representative, PECC member committees are willing to give their considered assessment of how the core interests and ambitions of their host economy may reasonably be expected to evolve over the next two to three decades.  

 

PROJECT MANAGEMENT

Under the joint leadership of the PECC member committees of Malaysia and New Zealand, PECC has formed a task force dedicated to this project. The group consists of people also drawn from other committees but not exclusively so. They provide a balance between relevant skills and experience acquired in academia and those derived from substantial and long-standing engagement in the policy community or regional commerce. 

A questionnaire to member committees and selected individuals will deliver the essential base material for the interviews and initial findings planned in phase one of the project described below, and provide the framework for a preliminary report by the task force.

 

SCHEDULE

Phase One: Information Gathering and Consultations (June-December 2017)

The project ‘champions,’ MANCPEC and NZPECC, in collaboration with task force members and in liaison with the PECC Secretariat, will construct a questionnaire to be filled in by colleagues from member committees and other appropriate experts identified by PECC. It will be followed by a series of interviews conducted by electronic means with selected individuals from within and outside member committees.

Drawing on the information and insights obtained from that process, a summary of the questionnaire and interview results will be prepared and made available to member committees and selected individuals for comment. The summary of responses and the comments will serve as the basis for the draft report to be prepared as Phase two of the project.

Phase Two: Preparation, Discussion and Approval of Draft Report (January-July 2018)

Based on the further work envisaged and feedback received, the co-champions and the task force members will prepare a draft report. A coordination meeting to prepare the draft report will be held in January or February 2018 in Kuala Lumpur. The draft report will outline the process followed, and highlight principal conclusions.  It will be submitted to all member committees for review and comment. The Final Report will then be completed and presented to the PECC Standing Committee for consideration and approval.

Phase Three: Presentation of Report and Stakeholder Engagement (July-November 2018)

In accordance with normal PECC practice the Final Report will be submitted to APEC SOM and Ministers. If requested, an oral presentation will be made to SOM and/or to relevant Ministers. Simultaneously, PECC member committees will submit a copy of the Final Report to their relevant domestic stakeholders, e.g. political leaders, media and the public.

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Discussion Forum

Going It Alone in the Asia-Pacific: Regional Trade Agreements Without the United States
Peter A. Petri (PIIE), Michael G. Plummer (Johns Hopkins University and East-West Center), Shujiro Urata (Waseda University) and Fan Zhai (Former Managing Director, China Investment Corporation)


The Linkage between Services and Manufacturing in the US economy
Sherry M. Stephenson, Senior Fellow, International Centre for Trade and Sustainable Development


Digital DNA: Disruption and the Challenges for Global Governance
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Jonathan D. Aronson (University of Southern California)


Growth in a Time of Change
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After the TPP: What’s Next for Canada in Asia?
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