Worldwide: APEC Hits 25 As The Region’s Free Trade Grows

Last Updated: 13 November 2014
Article by Paolo Tavolato

A harbinger of Asian free trade, APEC is celebrating 25 years of economic cooperation as it meets in Beijing this week. Our Head of APAC looks at the importance of the organisation to the region.

APEC was established amid the fall of the Berlin Wall and the end of Cold War. Its vision was to eliminate trade barriers and strengthen economic cooperation in the Asia Pacific (APAC) region as international trade started to expand rapidly. The forum was founded on the basis of non-binding commitments and all agreements are reached by consensus among its members.

APEC refers its members as "economies" instead of countries due to the presence of Taiwan (known as Chinese Taipei) and Hong Kong (referred to as Hong Kong, China). Its members also include Australia, Brunei, Canada, Chile, China, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Thailand, the  United States and Vietnam. Together, they represent 40% of the world's population.

The region consists of some of the most dynamic and promising economies in the world. It is widely known as the engine of world's economy as it accounts for 57% of total global GDP and 46% of world trade. APEC's members are not only the world's "factory floor" but they are also its most important sources of service, technology, investment and product markets.

For its first 25 years, APEC has been primarily focusing on facilitation of trade policy. As APEC's members slowly taking the centre stage of the world's economy, it is the right time for it to play a more active role in economy integration and financial cooperation for the common good of its members and the rest of the world.

This year's APEC meetings are expected to achieve major breakthrough on two topics; let's look at them in more detail.

Advancing Regional Economic Integration

As the host country, China is taking the lead to push for the establishment of the Free Trade Area of the Asia-Pacific (FTAAP) by 2025. The vision of the FTAAP is to integrate APEC's 21 member economies and create a single "free and open" market for trades and investments. It aspires to open up new opportunities and create important scale benefits for companies looking to invest in the region. It is estimated that the FTAAP would lift the global economy by US$2.4tn and lead to a 12% increase in world trade.

The FTAAP is seen as China's counter measure for the  Trans-Pacific Partnership (TPP), a US-led free-trade agreement being negotiated by 12 of APEC's 21 members excluding China. However, the exclusion of China from the TPP is considered impractical for many as APAC's economies are getting more and more integrated with China. The International Monetary Fund (IMF) notes that more than 50% of the region's economic growth is actually driven by China (with every one percentage point of China's growth driving the region's economy by 0.3 percentage points). In 2013, 60% of China's total foreign trade was with its fellow APEC members, while 69% of its outbound foreign direct investment (FDI) flowed to in-region too.

Currently, up to 46 FTAs have been implemented in the APAC region while more than 12 are being negotiated.Some commentators consider the FTAAP as the solution to the region's "spaghetti bowl" of overlapping FTAs that is harming trade with growing complexity and costs for exporters and importers. Although it is undeniable that FTAs are boosting regional growth, it has also brought complication including different tariff schemes, complicated rules of origin and even trade discrimination over countries excluded from the agreements.

Strengthening Comprehensive Development in Infrastructure and Connectivity

The majority of APEC's economies are developing nations; the growth rate of their economy is heavily dependent on the connectivity of their physical infrastructure while the most pressing problem is a lack of funds. In view of this, 20 Asian countries agreed to set up the Asian Infrastructure Investment Bank (AIIB) to work alongside the World Bank and the Asian Development Bank (ADB) in improving investment flows to regional infrastructure.

The establishment of the AIIB is viewed as a challenge to the regional role of the ADB. But in reality ADB's current capacity is insufficient to support Asia's dire need of funds for infrastructure development and investment. Asia needs to invest around US$8trn on physical infrastructure over the next 10 years to sustain its growth. However, the ADB can only furnish about US$13bn of fresh funds in new lending every year. As a result, the region's infrastructure financing is facing continuous and growing deficiency despite 48 years of hard work by the ADB.

Also, financial cooperation in the APAC region has been heavily focused on disaster emergency support and poverty eradication instead of national development.

The AIIB is founded with the mission to fill the gap as it would focus mainly on infrastructure financing. Unlike the ADB and the World Bank, AIIB's loan is unlikely to be attached political conditions due to China - its main contributor - having a non-interference policy on other countries' internal affairs.

Read more on doing business in APAC.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions