Analysis: APEC Members Enjoy de Facto Integration

Issued by the APEC Secretariat

9 November 2009 – The impact of APEC membership on trade is comparable to that of a free trade agreement, even without a binding agreement.

In a report completed last month, an independent research team has tackled the much-debated question: Does APEC really make a difference to trade?

The report’s analysis reveals that APEC members trade with each other more than they do with other free trading agreement partners and much more with trading partners who are both members of APEC and members of the World Trade Organisation. This, say analysts, demonstrates the high level of de facto integration between members of APEC, even under non-binding arrangements.

After taking into account the usual factors that influence trade – like size of economy, distance between economies, WTO membership and being in an FTA with a trading partner – APEC members are 3 times more likely to export to another member than to a non-member and two times more likely to import from another member than from a non-member.

Findings are further supported by a five-fold increase in trade within APEC since its establishment in 1989 and the 67 percent share that intra-regional trade comprises of total APEC trade. Notably, this is a larger intra-regional share of trade than that in the EU-27.

“This provides analytical evidence that APEC achieves results, explains Philip Gaetjens, Director of the APEC Policy Support Unit, the team responsible for the report.

“It shows that regional integration is strong and has prospered under a voluntary and non-binding approach to enhancing trade.”

Member economies have virtually eliminated tariffs and continue to find ways to reduce trade barriers. APEC has been exploring the possibility of a Free Trade Area in the Asia-Pacific (FTAAP).

ENDS

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