The Asia-Pacific Economic Cooperation (apec)

APEC

By

Matt Tudor

University of Phoenix

March 13, 2007

Table of Contents

Introduction ……………………………………………………………………………3

Brief History …………………………………………………………………………...3

Role of regional integration …………………………………………………………..4

Advantages …………………………………………………………………………….5

Disadvantages …………………………………………………………………………6

Conclusion …………………………………………………………………………….7

References …………………………………………………………………………….8

Introduction

The Asia-Pacific Economic Cooperation (APEC) was created back in 1989 with 12 original members. As of today, the membership has increased to 21 members making APEC one of the largest regional organizations. The goal of this organization is to cooperate with other countries through trade and foreign relations in order to better the global economy. There are drawbacks to organizations such as APEC because sometimes countries do not always agree or get along with each other. A good example is the United States and China, which will be addressed later.

Brief History

APEC was founded back in 1989 by 12 countries who wanted open-trade in the Asia-Pacific region. This list has grown to 21 members who include Australia, Brunei, Canada, Chile, China, China's Hong Kong, Chinese Taipei, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Thailand, the United States and Vietnam. Since its inception in 1989 “

APEC has represented the most economically dynamic region in the world …accounting for more than one third of the world's population (2.6 billion people), approximately 60 percent of world GDP (19, 254 billion U.S. dollars), about 47 percent of world trade, and having generated nearly 70 percent of global economic growth in its first 10 years,” (Xinhua News, 2006). The main scope of this organization is to promote free trade and cooperation among members in the fields of economy, trade, investment and technology. In 1994, a meeting took place in Bogor, Indonesia specifying goals for industrial achievements. These goals are known as the “Bogor Goals,” which lay the framework for free and open trade and investment among developed countries by 2010 and developing countries by 2020.

Role of regional integration

The role of regional cooperation is to build economic relationships with other countries in a geographic region. This economic relationship between countries will provide a cheaper trade rate which in turn benefits the consumer with lower prices. APEC has three focuses known as the “Three Pillars.” The first pillar is Trade and Investment Liberalization. This reduces the tariffs that are emplaced on imported goods and eventually will become non-existent. By reducing these tariffs and eliminating them, the trade market will open up and increase trading among different countries and increase economic growth for the APEC members.

The second pillar is Business Facilitation which “focuses on reducing the costs of business transactions, improving access to trade information and aligning policy and business strategies to facilitate growth, and free and open trade,” (APEC, 2007). This pillar is designed to help the importation and exportation industry in the APEC region to increase facilitation efficiency and reduce the costs of production. Again, this will increase trading among the members leading to cheaper goods and services and increasing career opportunities created by an expanded economy.

The third pillar is Economic and Technical Cooperation otherwise known as ECOTECH. The purpose of this pillar is to provide training and cooperation among the APEC members to build capacities and take advantage of global trade.