THE TEMASEK REVIEW

By Shamim Adam from Bloomberg

The Asia-Pacific Economic Cooperation will focus on “longer-term” issues such as promoting trade and market opening as the group’s members emerge from recession, Singapore Prime Minister Lee Hsien Loong said.

The 21-member grouping has a long-term vision of creating a free trade area in the Asia Pacific and will use existing trade accords as a springboard to achieving this goal, Lee said today. The Southeast Asian island will host the summit of APEC leaders Nov. 14 and Nov. 15.

“We will be discussing how to advance APEC’s core mission which is to advance free trade and open markets in the Asia- Pacific,” Lee, 57, told reporters in Singapore. “The idea is to consolidate a network of free trade agreements which have sprung up and to reduce the administrative complexities and overheads of businesses.”

APEC members, whose economies account for more than half of global gross domestic product, in 1994 signed the “Bogor Declaration” pledging to create free and open trade in the group’s developed economies by 2010 and in its emerging economies by 2020.

“Countries have made some progress towards the Bogor goals but we haven’t quite yet achieved everything,” Lee said. “Within the last couple of years, because of the economic circumstances, some backward steps have been taken as conditions have been hard and people have had to make concessions because of political pressures.”

APEC will also discuss efforts to reach a new agreement to cut tariffs and subsidies in the World Trade Organization as part of the so-called Doha Round, Lee said. Talks aimed at reaching a global accord have been stalled for eight years as international leaders warn rising protectionism may deepen the world’s economic slump.

Global Outlook

The global economic outlook remains uncertain and the consensus among policy makers, including leaders at the Group of 20 nations, is that stimulus measures can’t be withdrawn suddenly, Lee said. Still, the global economy is out of its “trough,” he said.

APEC said in July growing protectionist sentiment was threatening the world’s recovery from its deepest slump since the Great Depression. Completion of the WTO trade talks is necessary to prevent protectionism from re-emerging, Lee said.

The Doha Round began in 2001 with a focus on dismantling obstacles to trade for poor nations by striking an accord that will cut agriculture subsidies and tariffs on industrial goods. Discussions have been dogged by disagreements over issues including how much the U.S. and the European Union should reduce aid to their farmers and the extent to which developing countries such as India, China and South Africa should lower tariffs.

Energy, Transport

APEC’s leaders will also discuss improving energy efficiency, connectivity in transport and logistics, and regulatory reforms to make it easier to do business across borders, Lee said. APEC hasn’t discussed extending a moratorium on allowing new members, he added.

Singapore is “very concerned about security” at the APEC summit this month, Lee said, adding that he expects a smooth and peaceful meeting.

APEC members, including the U.S., China, Russia and Japan, account for about 44 percent of world trade and 54 percent of global gross domestic product, according to the organization’s Web site.

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