The Asia-Pacific Economic Cooperation APEC and Pacific Multilateralism

Term Paper, 2016
17 Pages, Grade: 1.0




APEC’s Mission
Exhibit 2 Structural Reform Areas, Source: APEC website
APEC’s Organizational Structure
Comparing APEC to other Pacific Multilateral Organizations
Analysis of APEC’s Strength and Weaknesses
Pillar One: Business Facilitation
Pillar Two: Trade and Investment Liberalization and Facilitation
Pillar Three: Economic and Technical Co-operation

Conclusion: APEC Going Forward

Works Cited


The “Asia-Pacific Economic Cooperation” (APEC) was established in 1989, and holds 21 so called member economies, all located on the Pacific Rim. Each member represents a particular economic region rather than individual states which is illustrated in Exhibit 1. APEC’s main goal is promoting “sustainable economic growth and prosperity in the Asia-Pacific region” (Achievements and Benefits, 2016). This is supposed to be reached primarily by the establishment of the Free Trade Area of the Asia-Pacific (FTAAP). However, APEC is working on many different topics and various alliances have been formed in order to enable free trade and investment, good cooperation among members, regional economic integration, enhancing human security and facilitating a favorable sustainable business environment in the Asia-Pacific (About APEC, 2016).

The organization works as a cooperative and multilateral economic trade forum. A defining characteristic of APEC is that it is the only international intergovernmental bundling in the world aiming to reduce trade barriers to trade and investment without postulating legal binding contracts and therefore encourages participation and structural flexibility (About APEC, 2016).

APEC has enjoyed great success as an international forum for discussion among the world’s leaders in politics, business and academia. However it has made limited progress in regional integration and cooperation in areas such as financial infrastructure with a slow response time to emerging world trends.

Abbildung in dieser Leseprobe nicht enthalten

Exhibit 1, Map of APEC’s member economies, Source: APEC website

APEC’s Mission

After its inception, members quickly recognized the difficulty of implementing policies between states of varying economic development levels. So it was 1994 in Boga, Indonesia when leaders committed to achieve free trade and investment in the Asia Pacific no later than 2020 by forming three pillars, which were defined as the Bogar Goals (Scope of Work, 2016) .

The Business Faciliation pillar aims to reduce time, cost and uncertainty of doing business through an open, multilateral international system .Overall it is looking to enable the development and harmonization of policies to improve market access and efficiency, and maintain public interest such as safeguarding health and safety (Scope of Work, 2016).

In 2004 the agenda addressed domestic policies and behind-the-border impediments, for greater macroeconomic stability, higher productivity and in the long-term increased living standards (Structural Reform, 2016). This is to be achieved by implementing structural reforms in five prioritized areas which are displayed in Exhibit 2. Thereafter APEC created another strategy for structural reforms to facilitate sustainable growth and enable transparency, competition, better functioning markets and also included a social aspect in developing opportunities for women (Structural Reform, 2016).

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Exhibit 2 Structural Reform Areas, Source: APEC website

The Trade and Investment Liberalization pillar refers to the need for action in reducing tariff and non-tariff barriers to trade and investment, which enables markets access across economies in the region. The will lead to job creation, income growth and overall economic growth. More specifically this pillar aims to create systems with common standards, enabling faster and easier customs procedures to ease the movement of goods across the region. This is well reflected through the online centralized export and import system, nicknamed Single Window, which APEC created. Moreover APEC provides guidance for bilateral and regional trade agreements with the long-term goal of establishing FTAAP (Scope of Work, 2016).

The last pillar Economic and Technical Cooperation (ECOTECH) aims to advance trade, investment and economic growth in a sustainable way. The major focus thereby lies in strengthening anti-corruption, cross-border education, skills training, emergency preparedness, energy security, enviromental protection, defense against pandemics and infrastructure development all around the region (Scope of Work, 2016).

Although these pillars illustrate a structure for the accomplishment of APEC’s Bogar Goals, members soon realized that they had to establish mechanisms to ensure its progress given its long-term nature. Therefore APEC generateted the Osaka Action Agenda which consists of Individual and Collective Action Plans as well as an overarching common strategies for the organization’s projects (Action Plans, 2016).

The Individual Action Plans (IAPs) and the Collective Action Plans (CAPs) define actions and report progress on projects undertaken by members to achieve APEC’s goals for the region. IAPs report the goals and timelines that member economies set for themselves on a voluntary and non-binding basis. Therefore IAPs provide the opportunity to follow the progress of a particular member economies by their comparison over the years. In contrary CAPs focuses on reporting progress of joint goals between the member economies. In general however these action plans focus on a wide range of policies to promote free trade such as tariff elimination, intellectual property rights, government procurement etc. (Action Plans, 2016).

According to the APEC Roadmap, all action plans should be comprehensive, regionally and internationally consistent by World Trade Organization (WTO) standards, transparent, promote cooperation among members and be flexible given each members different level of economic liberalisation (Action Plans, 2016).

APEC’s Organizational Structure

APEC is set apart from others international economic trade forums as it is the only international organization in the world that attempts to reduce trade barriers and promote economic coordination between countries without legally binding agreements (How APEC Operates, 2016). In a globalized world dominated by Free Trade Agreements (FTA) it is a rarity to find such a characteristic in a multinational body as it does not provide much protection for emerging economies. This is especially important given the diversity among its members in terms of size, economic level and even culture in some cases however this is remedied by its organizational structure.

APEC has a bottom-top organizational structure which is illustrated in Exhibit 3. The top comprises of meetings that APEC hosts for setting policy through member discussion since APEC operates on a voluntary and cooperative basis (Asia-Pacific Economic Cooperation

(APEC), 2016). The Economic Leaders’ Meeting (ELM) is held annually and is supported with Ministerial Meetings and Senior Officials Meetings which are held multiple times a year to discuss budgets, goals, and reports etc. that are then used as supporting material during the ELM. These meetings then encourage dialogue between member states and provide them the opportunity to discuss any progress for their respective IAPs and CAPs.

It is important to note that by having both an individual and collective option, member states can pursue economic growth on their own or they can coordinate with other countries. In this sense APEC has a parental role for these countries, making sure they are continuously aiming for economic improvement by providing them the structure and tools to accomplish their economic goals. Simultaneously this removes legal repercussions or political impediments as barriers for member participation since states can simply decide not to continue with an action plan if the political, social and economic costs become too high.

The Committees and Working Group constitute the bottom of the organizational structure and reviews project implementation and progress, with each focusing on a specific topic that align with APEC’s pillars (Asia-Pacific Economic Cooperation (APEC), 2016).

Projects undertaken by APEC as a whole can range from initiatives to build more sustainable business environments, encourage women in the workforce, invest in solar-powered emergency shelter solutions and technical infrastructure integration (APEC Project Database, 2016). The diversity in the organization’s projects demonstrate it is more than just a trade agreement but also a forum for international cooperation dependent on common priorities of its member states.

Each member contributes annually to the APEC’s $5 million US budget and also provides support in the form of staff to the Secretariat which is located in Singapore (Achievements and Benefits, 2016). However each member determines its own contribution, re-enforcing the voluntary aspect of APEC.


Excerpt out of 17 pages


The Asia-Pacific Economic Cooperation APEC and Pacific Multilateralism
University of Chile  (Facultad de Economía y Negocios)
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ISBN (eBook)
ISBN (Book)
Aus der Reihe: stipendiaten-wissen
APEC, Pazifik, Multilateralismus, Freihandel, Trade Agreement
Quote paper
Tristan Lizardo (Author), 2016, The Asia-Pacific Economic Cooperation APEC and Pacific Multilateralism, Munich, GRIN Verlag,


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