Friday, November 19, 2010
APEC 2010: Interesting projection
Since the beginning in 1989 ,APEC has been an important source for new opportunities for global trade and economic development. The 21 economies which are part of this association, represent 56% of Global GDP and 46% of global trade. Such a share in global economic in motion ,certainly expand the boundaries for growth. Research by the APEC policy support unit (2009), shows that its members are three times more likely to export ,and two times more likely to import from fellow members than non member. Thus, lower transaction cost among APEC members, generate endogenous positive conditions to foster additionally trade and growth, making the APEC area, more active in terms of intra regional trade, than EU,NAFTA and the Asian -7 association .-
While there still a learning process about the complexities of global economy, trade association based not only on economic- financial flows, but also on geography has, proved to be very useful to open up new alternatives for growth. Global economy is not only about mobility of financial resources, risk exposures and its regulation, it is also about additional path for export and import of goods, raw materials and equipment.-
Besides, Global economy preferences for risk, is lower than the economies which are part of it, are willing to be worry . The level of debt of some European countries ,far from what it supposed to be a rule (3% of GDP ), increase the risk perception above what it is desirable for global economic financial and good flows, and it is better to make adjustments than to go away from them.-
An issue which is on its way to get through, is the project for a Free Trade Area of the Asia pacific, pushed on mainly by business leaders (APEC Business Advisory Council), who understand the fundamental of Global economy, better than Governments usually do.
There is currently a whole process of setting common standards for environment protection , intellectual property rights, rules of origin, and services ,which will set the ground for concrete steps toward the goal of such a Free Trade.-
The implications of the further strength of this initially called “Forum”, to become a Free Trade area, are both strategic and economics. Strategic , because assuming business lead the course for future international relations, and politics become constrained by economics, the stronger these associations are, the lower the risk of any single power prominence ,and the higher the chance of multilateral paths of cooperation. Economics, because it creates the conditions for endogenous source for economic growth , providing a sort of safety net for sharp fluctuations on global economic activity.-