While waiting for the forthcoming APEC meeting in Manila, I thought it would be important to determine which issues would have significant impact on the Philippines. APEC’s original purpose was to promote free trade throughout the Asia-Pacific region.
The founders were also motivated by three other factors. First, there was a felt need to respond to the advent of regional blocs, especially the European Common Market (ECM) in other parts of the world. Second, the rise of the ECM meant that former British Commonwealth countries – like Australia, New Zealand and Canada – and other Asia-Pacific nations felt there was a need to establish new markets for agricultural products and raw materials beyond Europe.
Third, there were fears that Japan would dominate economic activity in the Asia Pacific region. That was the era when the world thought Japan would become the next world economic superpower. Japanese investors were buying prime real estate in New York City and world renowned golf courses in America. Japanese companies were dominating industries like automotive, steel, electronics and engineering. Japanese zaibatsus were considered as role models for management styles. Japanese tourists dominated the world travel industry and were the biggest consumers of luxury brands. After that initial surge, its economy begun to stagnate. Today, Japan is still the third largest economy in the world; but, it never fulfilled the dream of becoming the world’s biggest economic superpower.
The APEC has now evolved into a forum for the leaders of the member countries to discuss economic issues publicly and geopolitical issues privately.
The coming APEC meeting in the Philippines comes at a very critical juncture in Asia Pacific geopolitics. There will be several important issues that will become major topics. I will be looking at three areas which, I believe, will be of vital interest to the Philippines.
TPP versus RCEP
The original purpose of the APEC was to promote free trade among its member countries. However, just this year, two regional trade agreements, with overlapping memberships, have emerged in the region. Both have basically the same goals – trade liberalization and economic integration. The two trade pacts have two very significant differences which could lead to competition between them.
The first is the Trans Pacific Partnership (TPP) which is the result of an agreement between 12 countries – Australia, New Zealand, Singapore, Malaysia, Brunei, Vietnam, Japan, Canada, United States, Mexico, Peru and Chile.
The Regional Cooperative Economic Agreement (RCEP) is still under negotiation. Even though the details are not yet known, there seems to be a framework that has emerged. The RCEP is intended to put together in a single agreement the countries which have existing free trade agreements with the ASEAN and China into a single trade pact.
The Philippines, as a member of ASEAN, is part of the negotiations regarding the RCEP. The Philippines also has officially announced that it intends to join the TPP.
There are two major differences between the two trade pacts. First, the TPP calls for deeper integration – than the RCEP – by promoting free trade in goods, services and investments. The TPP also includes agreements on other areas like labor standards, wider internet access, protecting copyrights and patents, promoting anti-corruption practices, and organizing third party dispute mechanisms. The RCEP is a more limited agreement, similar to the World Trade organization ( WTO), focusing mainly on trade in goods and several types of services and investments. These are two different models of trade agreements.
The other major difference is that the TPP includes the United States and excludes China. The RCEP includes China and excludes the United States.
During the APEC meeting, the topic of TPP and the RCEP will definitely be discussed. The question is whether there will be some type of consensus that will allow the TPP and the RCEP to co-exist or whether APEC countries will ultimately have to decide which economic bloc they will join.
Freedom of navigation
I am certain that the APEC heads of state will discuss recent increase in tensions between the United States and China. The ongoing naval exercises of the US and Japan in the West Philippine Sea will also highlight the dramatic change in Japanese security policy shifting from a purely defensive posture to becoming more involved in international security affairs especially in the Asia Pacific region.
The Philippines will also have the opportunity to brief APEC leaders on its recent victory in its case before the Permanent Court of Arbitration. Hopefully, this triumph might encourage other nations, with similar territorial claims versus China, to resort to international arbitration as a moral and legitimate means of asserting territorial sovereignty when confronted by a country which resorts to superior force to enforce its territorial claims.
These discussions can also lead, hopefully, to some consensus on the definition of freedom of navigation which may allow Filipino fishermen to return to their historic fishing grounds in the Scarborough Shoal without harassment from China’s warships.
The future of ASEAN
It is very clear that these disputes with China have now led observers to question the survival of ASEAN as an integrated body of nations. The recent failure of the ASEAN ministers of defense to even arrive at a joint statement regarding freedom of navigation in the West Philippine Sea is one such evidence. Perhaps, the most realistic expectation is that the ASEAN may have to be satisfied being simply the equivalent of the United Nations in Southeast Asia – a coordinating body and forum for its member countries. It may be more realistic to put aside the dream of a united ASEAN until a more opportune time in the future.
Writing class for kids and teens
Write and Craft Your Book on November 14 (1:30-4:30 pm) at Fully Booked Bonifacio High Street.
Adult writing class series continues
The Personal Essay with Paulynn Paredes Sicam on November 21, 2015 (1:30-5:30pm) at Fully Booked Bonifacio High Street. Paulynn Paredes Sicam is a journalist and editor. She writes a weekly column for the Philippine STAR.
For registration and fee details contact 0917-6240196/ writethingsph@gmail.com
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