There is no better time than now for APEC member economies to revive the work on integrating the Asia-Pacific, being the
most dynamic region in the world, and bringing new energy to the long-term prospect of a Free Trade Area of the
Asia-Pacific or FTAAP, according to a new policy brief.
“The pandemic and the aftermath of COVID-19 have only stressed the significance of regional economic integration,” said
Dr Denis Hew, Director of the APEC Policy Support Unit. “APEC policymakers need to address emerging trade-related issues
and challenges in order to realize deeper regional economic integration.”
“It is not enough for governments to take decisive action at the domestic level when the world faces a pandemic,” said
Carlos Kuriyama, a senior analyst with the APEC Policy Support Unit, author of the policy brief. “International
collaboration has to be part of the solution.”
“Most importantly, any regional integration scheme, including free and/or regional trade agreements, could assist to
overcome pandemic-related challenges,” Kuriyama added.
The report identified six main challenges affecting trade that are deemed most critical: 1) disruption in accessing
essential goods, 2) disruption in trade in services, 3) difficulties in supply chain logistics, 4) digital
transformation, 5) transparency, and 6) regulatory bottlenecks affecting trade in essential goods.
While some of these disruptions were far more severe during the first stage of the pandemic, the challenges persist. For
example, some of the export restrictions to essential goods are still in place, services trade has yet to recover to
pre-pandemic levels, and cross-border data restrictions have increased globally.
“There’s a need for us to resolve bottlenecks in supply chain logistics. Delays in vessel arrivals have increased in
almost 50 percent since the pandemic started and freight rates for 40-ft long containers have skyrocketed in more than
600 percent”, said Kuriyama
The policy brief highlighted that APEC, as an incubator of ideas, could take these challenges into account and
incorporate new topics related to trade in goods, services, trade facilitation and digital issues, among others, into
the FTAAP work program.
Kuriyama explained that member economies could come together to collectively commit to not implementing export
restrictions to essential goods and ensure their availability for commercial purchase. Another example is to ensure
airports, ports, customs and border facilities remain operational during pandemics.
“There is also a need for APEC economies to facilitate the movement of essential workers, including air crews and
maritime seafarers across borders,” he said. “Border cooperation and technical assistance needs to be strengthened by
adapting modern technologies and paperless procedures.”
Important to the future of work and trade is digitalization. The report notes that modern trade rules for data privacy,
data localization, cross-border data flows, and electronic commerce (consumer protection, electronic payments and
electronic signatures, among others) are needed to foster the digital economy.
“While the pandemic has accelerated structural changes in the economy, APEC is in a position to influence the global
trade agenda,” Kuriyama concluded. “APEC encourages the resilience of economies by undertaking collective initiatives,
including capacity-building activities, in areas of growing interest. We must seize this momentum to achieve a more
inclusive and sustainable future.”