APEC Mulls Pacific-Wide Free Trade Zone
14th Nov 2006, 18:04 GMT
With global trade talks suspended, the APEC club of 21 Pacific Rim economies is exploring the possibility of creating a massive free-trade zone stretching across the Pacific Ocean, but analysts warn it is a monumental task fraught with political and technical difficulties. The Asia-Pacific Economic Cooperation forum's business advisory council has urged APEC leaders to seriously consider the idea at their annual summit this weekend as a way to consolidate a plethora of free-trade deals in the region, particularly after the collapse of World Trade Organization talks in July. A sprawling APEC-wide free-trade area, stretching from the U.S. to China and from Australia to Chile, would envelope nearly half of global trade, 40 percent of the world's population and 56 percent of its gross domestic product. The APEC Business Advisory Council in a report last month to APEC leaders said the "spaghetti bowl" of bilateral and regional free-trade agreements made doing business more complex and costly and added layers of paperwork for trade transactions. Instead of having standardized rules, bilateral agreements produce different sets of requirements for trade to different countries, it said. At least 40 free-trade pacts have been signed or are being negotiated among APEC members, the council said. It said it was time for APEC to consider harmonizing all the existing trade arrangements under a region-wide pact, dubbed the Free-Trade Area of the Asia-Pacific, but acknowledged there were "practical difficulties" in negotiating such an agreement. "ABAC believes that an FTAAP offers the highest degree of achieving such convergence and consolidation," the report said. According to a draft of a final communique obtained by The Associated Press, APEC leaders do plan to "actively consider" such a free-trade zone as a future goal, although they said it may not be a viable near-term objective. But restarting the WTO talks is first priority, business executives say, and APEC...
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