APEC – a chance to discuss big issues

Twenty-one leaders joined the APEC summit last week in Manila to discuss how regional cooperation can contribute to the well-being of the member countries and stay relevant. The APEC meeting was held only a few days before the ASEAN summit which paves the way for the ASEAN Economic Community, further integrating Southeast Asian nations.

APEC is not, however, designed to form legally-binding cooperation; APEC summits are meant to provide a forum for leaders to discuss issues of regional concern. The theme for this year, “Building Inclusive Economy, Building a Better World”, reflects the global situation. The economic wealth of the past decades, propelled by technological advances, has not been fairly disseminated. In the past decade, the top earners have captured a disproportionately large share of the total income in many markets economies, including the Philippines, at the expense of the majority of people at the lower end of the earning scale. To build sustainable and balanced economies, APEC should discuss how countries can create an environment that allows to proportionately spread wealth to every member of society.

For instance, APEC guidelines should give more encouragement to small and medium enterprises, instead of letting the richest and best connected reap unfair benefit at the expense of free competition (in the Philippines, it is high time that the Philippine Competition Commission is formed and starts working on and then implementing the IRR). The agricultural sector and environmental protection should be developed in parallel with the growth of industries to form a solid socio-economic foundation.

The timing of APEC this year should provide an opportunity for countries to inquire about the prospective Trans-Pacific Partnership Agreement (TPP), which includes many APEC members, and the planned Regional Comprehensive Economic Partnership (RCEP), which will include ASEAN and its six free-trade partners – Australia, China, India, Japan, South Korean and New Zealand. APEC leaders should show the political will so that prospective free-trade agreements will not turn out to be barriers against non-member countries – it would run against the spirit of APEC, which aims to promote inclusive economies, not to discriminate against nations outside the trade bloc.

The APEC summit faces the challenge of staying relevant amid the legally-binding regional agreements such as the ASEAN Economic Community, TPP and RCEP. APEC accommodates many working groups which function at senior official levels (and which have met in various parts of the Philippines during this year). There are questions as to whether it is necessary to host an expensive annual gathering of prime ministers and presidents (crippling business in Metro Manila for at least a week) which does not produce concrete policies that legally bind the participating countries. But its loose cooperation format can be a plus as it may encourage leaders to show their political will and exchange views earnestly, covering the enhancement of economic integration, fostering SME participation in both the regional and global economy, investing in human capital development and building sustainable and resilient communities.