News Analysis: FTAAP pathway to regional economic integration

BEIJING, Nov. 20 (Xinhua) - Chinese President Xi Jinping called for acceleration of the Free Trade Area of the Asia-Pacific (FTAAP) on Friday, amid increasing worry about fragmentation as several regional free trade arrangements crop up.

First mooted by a Japanese economist Kiyoshi Kojima as early as 1966, the FTAAP was agreed as a long-term vision by APEC leaders in 2006.

Yet, not until last year during the Beijing APEC summit was the vision finally put into concrete action through the Beijing road map, with members agreeing to conduct a collective strategic study on FTAAP.

The study, led by China and the United States with participation from all APEC economies, is currently in the phase of substantive drafting, according to Chinese Vice Foreign Minister Li Baodong.

He said that the study will assess the potential impact and benefit of FTAAP, analyze possible pathways for its realization and be submitted to the leaders by the end of 2016 along with recommendations.

The FTAAP will be the continuation of the Bogor Goals, a cornerstone of APEC's agenda that aimed to liberalize trade and investment in the Asia-Pacific's industrialised economies by 2010, and by 2020 for developing economies, said Tang Guoqiang, chairman of China National Committee for Pacific Economic Cooperation.

As an important driving force for the promotion of free trade and investment, FTAAP will also take us closer to the Bogor Goals and shows the way for Asia-Pacific economic and trade cooperation beyond 2020, said Zhang Jun, Director-General of the Department of International Economic Affairs of the Foreign Ministry.

Experts say that the FTAAP is an effective way to reduce the "spaghetti bowl effect" of the various overlapping regional trade arrangements and fragmentation risk.

"A unified trade framework is obviously the most efficient, and many research papers have shown that the realization of FTAAP will bring more economic benefits to countries in the region than existing trade arrangements like the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP)," said Liu Chenyang, director of APEC research center of Nankai University.

In regards to the relationship between the existing regional trade arrangements and FTAAP, Zhang said they neither contradict nor try to supplant one another, but are closely related, even complementary.

"The FTAAP is much broader in scale and more inclusive, compared with TPP and RECP," said Chito Romana, a veteran Pilipino journalist who lived and worked in China for more than three decades.

However, one of the challenges is how to make rules and regulations that are acceptable to all countries in the region, and how to ensure that the benefits of all parties, including both the private and public sectors, can be realized through such a broad free trade arrangement, he said.

The U.S.-led TPP trade deal, involving 12 countries in the Asia Pacific region, excludes countries like China due to its so-called "high-standards" which China fails to meet.

"The characteristic of inclusiveness and high-standards is actually not mutually exclusive. As we can see from the past 25 plus years, countries in the region are actually quite committed to a more integrated regional economy and are willing to adapt to higher standards." Liu said.

Yet, it is also important to maintain the balance and take care of all the countries' interests and needs, and a feasible way would be gradually raising standards with all members' participation, he added.

During the APEC CEO Summit, Xi called for equal-footed participation and extensive consultation for making free trade arrangements open and inclusive.

"It is crucial that cooperation should be promoted based on common interests, rather than letting multilateralism take the upper hand and allowing one particular country write the rules for international trade and investment in the 21st century." Liu said.

As the Asia-Pacific region covers a broad spectrum of economies with different levels of development, such a huge free trade arrangement as FTAAP cannot be completed in one go.

"China would like to work together with other economies, in the spirit of mutual trust, inclusiveness and win-win cooperation, to accelerate the realization of the Asia-Pacific free trade area." said Zhang Jun. Endi