Apec Conference sees in Trans-Pacific Agreement a model

Asia Key to Global Economic Recovery

CAUTIOUS but optimistic. This has been the defining mode here in Singapore as top leaders and officials from 21 countries congregated to discuss global economic recovery, trade, investment and the breaking of all sorts of barriers, political included.

The Apec 2009 conference kicked in on Sunday, November 8. It will conclude on the 15th, following a highly anticipated, and final meeting that will bring together leaders from the 21 member economies. The Asia-Pacific Economic Cooperation's 20th meet is of immense importance since it comes at the heels of global economic slowdown, which, in some countries, including the United States culminated to a major recession.

Economic recovery at a global scale is in fact taking shape, as has been the key assurance in the past few days. But words of caution are also heard, loud and clear, and repeatedly so.

Singapore, which has traditionally connected Asia to the rest of the world, as a major finance and trade hub is trying to do what it does best, bring movers and shakers of world economies in a unifying and conducive platform, without as little controversy as possible. The Singapore platform, as a microcosm of Asia, this time is much more influential than ever, as most Asian countries, unlike the rest of the world, managed to emerge from the rubble of the crisis, without much damage.

Top Singaporean officials here speak with much poise and confidence.

Singapore Prime Minister Lee Hsien Loong this morning delivered the keynote address of the Apec CEO Summit, a three-day gathering of powerful players in world economies. He spoke about the need for major reforms and called for efficient governmental monitoring of financial institutions.

``Governments need to interfere more'', he said, to ensure that the financial system in their member economies is stable and sustainable. If these words were uttered in the pre-crisis years, many would have screamed ``protectionism''. A few dare to say so these days.

The Prime Minister is optimistic at many levels, but Asia itself is a major source for his upbeat predictions. ``I believe that in the long term Asia will do well,'' he said.

He spoke of the need for further integration and breaking of trade barriers between member economies, citing the Trans-Pacific Strategic Economic Partnership Agreement (the Trans-Pacific Agreement, formerly known as P4) as a possible model that could be emulated in a future free trade arrangement between all member economies.

The agreement was signed by New Zealand, Chile, Singapore and Brunei in 2005. It also included a binding Environment Cooperation Agreement and a Labour Cooperation Memorandum of Understanding.

Although some trade experts contend that a de facto free trade agreement is already in place, some here want to see an official and binding treaty. A model is already in place, they assert, and should be thoroughly studied and, perhaps, duplicated.

Most of the 21 Apec members are already members of various other economic bodies, such as Asean, the G20, and many more. These might be ``messy structures'', said the Singaporean Prime Minister, but the ``wise thing is not to tidy up everything'', quickly and hastily. ``The region has evolved,'' he asserted, in reference to Asia, and messiness, is a byproduct of economic evolution. Asia ``must allow for things to change incrementally'', he added.

Prime Minister Lee addressed the issue of stimulus packages, infused by many governments around the world to save their sinking economies and bankrupt financial institutions. ``Fiscal stimulus packages are less difficult to arrange,'' he said, in reference to the recovery efforts. ``The difficult part is (the) monetary part'' of the recovery, for it creates trade and financial bubbles that would, sooner or later burst. For Asia, this could be a problem.

He also urged better harmonisation between banks around the world, so that deposits and withdrawals are not done in uncoordinated ways, thus creating financial chaos. Asian countries with relatively small economies are certainly more vulnerable to these sorts of crises, as was seen during the Asia economic crisis in 1997.

The CEO Summit followed the conclusion of the Apec Ministerial Meeting (AMM) here on Thursday. In his opening remarks at the final press conference, George Yeo, Minister for Foreign Affairs of Singapore narrowed down the overall objectives of Apec to two: ``One, never to allow a line to be drawn down the middle of the Pacific, and two, to bring China into the global system. So China, together with Taiwan and Hong Kong, were brought into Apec in 1991, joined the WTO, and now we have across the Pacific, US and China, in the same room, around the same table, and between the two of them, perhaps forming a single most important relationship in the world today.''

China is the buzzword in the global recovery efforts, thus at the Apec meet as well. However, the crisis also invited new names and more regional and international players to the fold, such as the G20, as opposed to the once uncontested G7. The G20, said the minister of foreign affairs is ``the most important economic organisation in the world today''. Such a realisation is ``perhaps a statement about the importance of Apec, 21 economies, but 10 of the leaders who are meeting here this weekend were at Pittsburgh. So the Pittsburgh agenda, the G20 agenda, has been brought into the Apec agenda''.

Thanks to the overlapping of memberships into various other powerful economic bodies, Apec is very vital a player in shaping the roadmap for economic recovery, which makes their 20th conference the more consequential.

The Brunei Times