Executive summary

Asia-Pacific Economic co-operation (APEC) was established in 1989 to further enhance

economic growth and prosperity for the region. APEC is the premier forum for facilitating
economic growth, co-operation, trade and investment in the Asia-Pacific region.
APEC has 21 member countries, viz., Australia, Brunei, Canada, Chile, China, HongKong,
Indonesia, Japan, Republic of Korea, Malaysia, Mexoco, New Zealand, Paupa New Guinea,
Peru, Philippines, Russian Federation, Singapore, Chinese Taipei, Thailand, United States and
Vietnam. These 21 member countries account for 41% of the worlds population, about 55
percent of world GDP, and about 49 percent of world trade. it is also the most economically
dynamic region in the world having generated about 70 percent of global economic growth in its
first 10 years.
APEC is the only inter governmental grouping in the world operating on the basis of non-binding
commitments, open dialogue and equal respect for the views of all participants. Unlike the
WTO or other multilateral trade bodies, APEC has no treaty obligations required of its
participants. Decisions made within APEC are reached by consensus and commitments are
undertaken on a voluntary basis.
India has requested membership in APEC and has received initial support from US, Japan and
Australia. officials from the member countries are in the process of discussing whether to allow
India to join. There is a concern among Western Countries that Indias entry might tilt the
balance of power in favour of Asia.

CHAPTER 1
INTRODUCTION
INTRODUCTION

What is APEC?
Formed in 1989, the Asia-Pacific Economic Cooperation (APEC) is a non-binding
forum established to promote economic growth and encourage free trade among
the Pacific-Rim economies. The 21 members of APEC account for approximately
55 percent of the world Gross Domestic Product (GDP), 43 percent of world trade
and 2.7 billion people. In addition, the region is strategically important to the U.S.,
as 60 percent of U.S. exports are bound for APEC members. The dynamism of the
APEC region is reflected in its rapid growth rates: the annual average growth rate
of APEC economies is 7 percent, compared to 5 percent globally. Moreover, the
purchasing power parity of APEC economies has tripled since organizations
inception.

MEMBER ECONOMIES
Australia Brunei Canada Chinese Taipei Indonesia Japan Republic of Korea
Malaysia New Zealand Philippines Singapore Thailand United States Hong Kong,
China China Mexico Papua New Guinea Chile Peru Russia Viet Nam How APEC
operates Unlike other international organizations, APEC does not produce trade
agreements; instead, APEC facilitates discussion on economic integration. Many of
the discussionsand indeed, the agenda set by APECinfluence the policy of
member economies, whose leaders consider APEC recommendations in developing
domestic policy. In fact, members are working on multilateral trade agreements,
like the Trans Pacific Partnership (TPP) outside of APEC. In this way, APEC
summits, like this years meeting in Honolulu, act as a place of mediation, where
leaders are free to express their ideas without the pressure to create an agreement.

ABOUT THE REPORT

 Title of the study: - The present study is titled as A PROJECT REPORT

ON ASIA-PACIFIC ECONOMIC CO-OPERATION (APEC)
PROBLEMS AND PROSPECTS.

Objective of the study:- The following are the objective of the study:
To Understand The goals of apec.
To measures the problems of apec
To Study challenges of apec.

Period of the study:-The period of the present study is from OCT 2015.
Limitations of the Study:-The present study has got all the limitations of
explanatory study method.
Data and Methodology:-For the purpose of the present study I had referred
internet, books, newspaper to collect information.

CHAPTER 2

PROFILE
PROFILE OF APEC

Asia-Pacific Economic Cooperation (APEC) is a forum for 21 Pacific

Rim member economies that promotes trade throughout the Asia-Pacific region. It
was established in 1989 in response to the growing interdependence of Asia-Pacific
economies and the advent of regional trade blocs in other parts of the world; to
fears that highly industrialised Japan (a member of G8) would come to dominate
economic activity in the Asia-Pacific region; and to establish new markets for
agricultural products and raw materials beyond Europe.
An annual APEC Economic Leaders' Meeting is attended by the heads of
government of all APEC members except Taiwan (which is represented by
a ministerial-level official under the name Chinese Taipei as economic leader. The
location of the meeting rotates annually among the member economies, and a
famous tradition, followed for most (but not all) summits, involves the attending
leaders dressing in a national costume of the host country.

Goals of APEC
APECs mission is to create greater prosperity for the people of the region. This
is done through cooperation that is balanced and voluntary, which in turn spurs
economic growth. The Bogor Goals, adopted in 1994, call for open and free trade
in the region by 2020 and are framed by three principles:
International Trade and Investment Liberalization working toward multilateral
trade agreements within APEC and expanding with non-APEC members. APEC is
committed to working within the current global framework, by aligning itself with
World Trade Organization principles.
Business Facilitation reducing administrative barriers to trade by streamlining
customs and standards. Through the Trade Facilitation Action Plan, APEC has
worked to reduce the cost of business transactions.
Economic and Technical Cooperation improving human capital and building
infrastructure through education, study centers and the support of small and
medium enterprises. The sharing and advancement of technology is also a major
part of APECs work

CRITICISM
APEC has been criticised for promoting free trade agreements that would trammel
national and local laws, which regulate and ensure labor rights, environmental
protection and safe and affordable access to medicine.According to the
organization, it is "the premier forum for facilitating economic growth,

cooperation, trade and investment in the Asia-Pacific region" established to

"further enhance economic growth and prosperity for the region and to strengthen
the Asia-Pacific community".] However, whether it has accomplished anything
constructive remains debatable, especially from the viewpoints of European
countries that cannot take part in APEC and Pacific Island nations that cannot
participate but will suffer its consequences.
How APEC operates
Unlike other international organizations, APEC does not produce trade agreements;
instead, APEC facilitates discussion on economic integration. Many of the
discussionsand indeed, the agenda set by APECinfluence the policy of
member economies, whose leaders consider APEC recommendations in developing
domestic policy. In fact, members are working on multilateral trade agreements,
like the Trans Pacific Partnership (TPP) outside of APEC. In this way, APEC
summits, like this years meeting in Honolulu, act as a place of mediation, where
leaders are free to express their ideas without the pressure to create an agreement.

HISTORY

In January 1989, Australian Prime Minister Bob Hawke called for more effective
economic cooperation across the Pacific Rim region. This led to the first meeting
of APEC in the Australian capital of Canberra in November, chaired by Australian
Foreign Affairs Minister Gareth Evans. Attended by ministers from twelve
countries, the meeting concluded with commitments for future annual meetings
in Singaporeand Korea.
Countries of the Association of Southeast Asian Nations (ASEAN) opposed the
initial proposal, instead proposing the East Asia Economic Caucus which would
exclude non-Asian countries such as the United States, Canada, Australia,
and New Zealand. This plan was opposed and strongly criticised by Japan and the
United States.
The first APEC Economic Leaders' Meeting occurred in 1993 when U.S.
President Bill Clinton, after discussions with Australian Prime Minister Paul
Keating, invited the heads of government from member economies to a summit
on Blake Island. He believed it would help bring the stalled Uruguay Round of
trade talks back on track. At the meeting, some leaders called for continued
reduction of barriers to trade and investment, envisioning a community in the AsiaPacific region that might promote prosperity through cooperation. The APEC

Secretariat, based in Singapore, was established to coordinate the activities of the

organisation.
During the meeting in 1994 in Bogor, Indonesia, APEC leaders adopted the Bogor
Goals that aim for free and open trade and investment in the Asia-Pacific by 2010
for industrialised economies and by 2020 for developing economies. In 1995,
APEC established a business advisory body named the APEC Business Advisory
Council (ABAC), composed of three business executives from each member
economy.
In April 2001, the APEC, in collaboration with five other international
organisations (Eurostat, IEA, OLADE, OPEC and the UNSD) launched the Joint
Oil Data Exercise, which became rapidely the Joint Organization Data Initiative
(JODI).

CHAPTER 3
THEORATICAL VIEW
CURRENT ACHIVEMENTS
Current Achievements in APEC It may be true that no spectacular announcement
has come out of APEC after the Manila Action Plan for APEC (MAPA) in 1996.
But this might be because the onset of the financial turned economic crisis that
started with Thailand in July 1997 had a lot to do with it. Not counting the
Malaysia year of the APEC Summit in 1998, APEC tried to get back to serious
business of free trade and competition during the New Zealand year of APEC
Summit in 1999. Again the political event in East Timor had stolen the thunder
from APEC. The Millennium APEC Summit in Brunei was a relatively quiet event
as expectations were raised with upcoming China Summit in 2001. The nice thing
about these two summits in Brunei and China was that both APEC members had
cooperated to make human resources development and human capacity building
the themes that captured the imagination of many people on what the future of
APEC should be: the strength in the economic and technical cooperation aspect of
APEC on par with the preponderance of trade and investment liberalisation and
facilitation. From then on, APEC is known for doing two things at its Summit (at

least from the point of view of the general public who hear the news from most
news media), one is to say that it supports the Doha Development Round of
multilateral trade negotiations, and the other is that it supports the counterterrorism moves led by the US.

To be fair, APEC has done more than these two things. Below are some of the
latest developments from various fora in APEC:
(1) Since 2001, APEC Ministers have agreed to adopt the Pathfinder Initiatives in
the Shanghai Accord whereby members who are ready to move closer to the Bogor
Goals can do so under the APEC principles of voluntarism, comprehensiveness,
consensus-based decision-making, flexibility, transparency, open regionalism and
differentiated timetables for developed and developing economies.
(2) The Shanghai Accord also included provisions on trade facilitations where
members have agreed to work towards reducing transaction costs in trade by 5 per
cent across the APEC region by 2006. These provisions later became the APEC
Trade Facilitation Plan (TFAP) in 2002. Similarly, the APEC Transparency
Standards were adopted in 2003 that have strengthened the facilitation aspects of
APEC.

(3) APEC Structural Reform Action Plan was discussed in Chile in 2004, which,
once completed, should greatly enhance trade and investment in the region.
Agreement has been reached where Trade Policy Dialogue on a key priority related
to trade and investment (impediments and solutions) will be held in SOM II in
2005.
(4) In Chile in 2004, two more interesting outcomes were achieved. One is the
formal inclusion of the issues of Regional Trading Arrangements (RTAs) and Free
Trade 3 Agreements (FTAs) in the APEC region in the APEC agenda for the first
time, and the other is the highlighting of the transparency and anti-corruption
aspects of the APEC trade.
(5) On ECOTECH issues, APEC members have agreed to upgrade the designation
of the ECOTECH Subcommittee to ECOTECH Committee (while retaining the
acronym ESC and the original mandate). The ESC has also opened up the channel
in which several international financial institutions (IFIs), especially the World
Bank and Asian Development Bank, could work with APEC through the ESC.
(6) Other APEC fora have continued their active participation on APEC matters.
The APEC Business Advisory Council (ABAC) continues to support the Pathfinder
Initiatives, the reduction in transaction cost, the APEC Transparency Principles and

Corporate Good Governance. Several APEC Working Groups have enjoyed several
new activities in the post-crisis situations in the APEC region.

There are many more detailed activities that can be classified as achievements in
APEC, particularly in such collective action plans as standards and conformance,
customs

procedures,

competition

policy

and

deregulation,

government

procurement, and mobility of business people, but these achievements may not be
sufficient to play a major role, or be a major factor to move APEC closer to the
Bogor Goals of free trade and investment in the Asia Pacific region by 2010 and
2020. It is the bigger question: How can we move closer to the Bogor Goals? that
figures prominently in the minds of many APEC watchers. And it is the difficulties
facing APEC in the next several years that have prompted the question: Whither
APEC 2005? In an influential Third Policy Report of the APEC International
Assessment Network (APIAN), Richard Feinberg has echoed the fear of many
APEC academics that APEC, despite its many accomplishments, has been losing
ground (Feinberg, 2003, p. 8). It was mentioned that 13 years after the first
Ministerial Meeting and 10 years after its first Leaders Meeting, APECs capacity
to adapt is lacking behind the accelerating rate of change that now characterises the
global political economy. This Third APIAN Report then suggests five areas of
reform, namely management reform, governance reform, stakeholder relations

reform, product reform, and financial reform, that should bring about its lost
competitiveness, and return APEC to a better position to fulfil its promise and to
restore dynamism and confidence to the Asia Pacific region. 2 These recommended
reforms are still valid today.

EXPECTED CHANGE FOR THE BETTER

Based on my personal observation, my research, and my personal experience
working inside the APEC process for a few years, I believe that there are many
more changes beyond what APIAN has recommended that can bring about better
and more progressive APEC. In 2005, Korea has adopted the need for change as
one of its thematic focus.3 In this paper, I want to concentrate on the following five
areas:
Greater Concentration on Free Trade and Investment Agenda
I have noticed that the enthusiasm in the aftermath of the success in the
Information Technology Agreement at the end of 1996 was very pervasive.
Although this agreement came under the auspices and jurisdiction of the World
Trade Organisation, it was well known that the APEC Leaders decision to support
this had played a very important and decisive role in its being accepted at the first
WTO Ministerial Meeting in Singapore in December 1996. No wonder this

enthusiasm had overflowed onto 1997, and partly resulted in the creation of EVSL.
If the crisis did not break out in 1997 in East Asia, perhaps the EVSL could have a
better chance of success. But, in the end, it would not be: the East Asian crisis had
put APEC in the doldrums. The debacle and failure to reach any agreement in the
next WTO Ministerial Meeting in Seattle in 1999 could have heightened the
posture of APEC as the major pro free trade forum in existence then, but APEC
could not make use of this opportunity as a result of the continuing crisis in its East
Asia and indeed later in Russia and Latin America. Then came the event of
September 11, 2001 that forced the change in APECs focus for the remainder of
2001. The APEC Summit in Shanghai was dominated by the counterterrorism
agenda, which stayed on for the next two years until 2003. East Asia was again
buffeted with another crisis in 2003, but this time, it was the health crisis, the
Severe Acute Respiratory Syndrome or SARS. Now two powerful events, security
and health, have caused the diversion of interests within APEC away from its
traditional focus and concentration on global trade and investment issues. Not that
these issues were not important: they were. But, the trade-off in time and energy
away from international trade and investment had weakened the mission of APEC.
By transforming APEC into an allencompassing forum that deals with any world
events that some APEC leaders would like to bring into the attention of APEC has
served to dilute the focus and concentration on its intended role in regional and

global trade and investment. 4 So, while leaders of the APEC economies are quite
inclined to put current events in the APEC agenda, they may have actually
chiselled away the meaningfulness of APEC as a unique trade and investment
forum. It is probably better for current and future APEC leaders to resist the
temptation of putting political, economic, and social commitments that go beyond
the traditional confine of APEC activities on its annual Summit agenda. By not
crowding non-trade, non-investment issues onto APEC Summit matters, APEC
members can concentrate more on various ways in which they can further the
causes for free trade, or various ways in which they can solve some of the trade
problems facing many APEC members at present. In short, APEC leaders should
stick with its traditional mission, and use other fora to discuss or solve other
political, economic, social, or health problems.

More Realistic Acceptance of RTAs/FTAs in the

APEC Context
But even with global trade and investment focus, the nature and characteristics of
todays trade and investment have changed drastically in the last several years.
Perhaps as a result of the failure or lack of progress of the WTO-sponsored new
round of multilateral trade negotiations, many APEC members have realised that
they could no longer wait for the successful conclusion of this WTO new round of
trade negotiations. They need to move inexorably forward as their lives depend on
world open trade systems. So, these outward-looking APEC members started to
enter into bilateral trade deals with likeminded members within as well as outside
APEC in the rapidly growing free trade agreements (FTAs). With the support the
US and Japan, two largest members of APEC who have swung from
multilateralism only to bilateralism along with multilateralism, the movements
towards increased bilateral FTAs in APEC along its traditional support of WTOtyped multilateral trade agreements and APEC-own open regionalism seem
unstoppable.
Literature abounds on the pros and cons of multilateral trading arrangements
versus bilateral trading arrangements. Findlay (2001), for example, sums up the

positive and negative effects of a preferential trading arrangements of which an

FTA is included vis-- vis a multilateral trading arrangement as follows:
Positive effects of FTA
There is what is known as the dynamic time path effects whereby preferential
arrangements build the momentum for further multilateral liberalisation.
Preferential agreements helps lock in policy change. Policy change which is
announced by which is not credible will not have any impact. The commitments
made in a preferential agreement provide one way of adding to the credibility of
policy change, since backsliding will be punished by loss of the advantages
provided by the agreement.
Preferential agreements may lead producers in economies with high external
tariffs to argue for lowering those tariffs, especially the ones applying to
intermediate goods.
Preferential agreements can be used as a threat to promote the multilateral
process. They can help participants go further than they could in the multilateral
system. They can establish deal with new policy issues and with emerging
impediments to trade and investment. Also, a preferential approach is said to help
the process of education about free trade and its benefits.

Negative effects of FTA At least five negative views on FTAs could be listed:
Benefits from preferential agreements can also come from a general
liberalisation of trade, and will also be larger in that case
. Members of preferential agreements are more likely to raise barriers to nonmembers, even when external tariffs are low.
Preferential structure may bring about or create rents members. But once they get
used to the benefits from these rents, members do not want to give them up as they
cannot be compensated by the move to freer trade. This is the snout in the trough
phenomenon as Findlay has called it.
Negotiation of preferential agreements uses up scarce policy making and
negotiating capacity and diverts attention in the policy making system

Revival of Interests in ECOTECH

It is my belief that one of the most important developments in APEC in the post
1997 period has been the rise of interests on economic and technical cooperation

(ECOTECH) among APEC members. Although such interests were shown much
earlier in the APEC process, 9 it was not until APEC members had agreed to set up
the ECOTECH
Subcommittee (ESC) in 1997 that ECOTECH activities got started in earnest. After
a couple of years, the ESC had found its handles on how to advance its ECOTECH
agenda, and as mentioned earlier, the China year of APEC Summit in 2001 could
be considered the most successful year for ECOTECH in APEC. There are many
changes and developments that could be called successful outcomes of ECOTECH
at the end of 2001. The followings are some of such outcomes.

Human Capacity Building Efforts

Human resources development and human capacity building have become one of
the most important, if not the most important, topics in ECOTECH activities since
1998. The interest in human resources development (HRD) was also manifested in
the frequency of meetings of the HRD Working Group as well as the number of
projects undertaken by economies and APEC fora during these periods. 11 As
mentioned earlier, in 2000 and 2001, Brunei and China had joined force to promote
the APEC activities on human capacity building. The Beijing Initiatives on Human
Capacity Building has become a policy statement of APEC that aims at increase

the ability and capability of developing members of APEC to catch up with their
more developed members, and for the latter to share best practices on human
resources development with their less developed partners
Operation of APEC
The APEC secretariat is based in Singapore and it operates as the core support
mechanism for the APEC process.

It provides co-ordination, technical and

advisory support as well as information management, communications and public

outreach services.
The APEC secretariat performs a central project management role, assisting APEC
Member Economics and APEC for a with overseeing more than 230 APEC funded
projects. APECs annual budget is also administered by the APEC secretariat.
The APEC secretariat is headed by an executive Director and a Deputy Executive
Director. These positions are filled by officers of Ambassadorial rank from the
current and incoming host economics respectively. The positions rotate annually.
The APEC secretariat is staffed by a small team of 22 Program Directors. In
addition around d 27 permanent staff fulfill specialist and support functions at the
APEC secretariat. Its headquarter is in Singapore.

Achievement and Benefits

Economic Growth: Since its inception in 1989, the APEC region has been the
most economically dynamic part of the world. During its first decade, APEC
member countries generated about 70 percent of global economic growth.
APEC member economies work together to sustain this economic growth through
a commitment to open trade, investment and economic reform. By progressively
reducing tariffs and other barriers to trade.

APEC member economies have

become more efficient and exports have expanded substantially.

A Highlight of APECs Achievement in the First Ten Years

The Important achievements of APEC during the first 10 years are :
(i)

Exports increased by 113 percent to over US $ 2.5 trillion.

(ii)

Foreign direct investment grew by 210 percent overall, and by 475 percent

in lower income APEC countries.

(iii)

Real gross national product grow by about a third overall, and by 74 percent

in lower income APEC economies.

(iv)

Gross domestic product per person in lower income APEC economies grew

by 61 percent.

Benefits to the people in APEC Region : Consumers in Asia-Pacific have both

directly and indirectly benefited from the collective and individual actions of
APEC member countries.

Important direct benefits are increased job

opportunities, more training programmes, stronger social safety nets and poverty
alleviation. Broadly APEC member countries on average enjoy lower cost of
living since reduced trade barriers and a more economically competitive region led
to lowering of prices of goods and services that everyone needs daily.

Improvements in Information and Telecommunications: In 1990, an average of

only 0.6% of those living in APEC member countries were cellular subscribers and
only 0.08 percent used internet. Within a space of 15 years those figures rose to 55
percent and 30 percent, respectively. Since 1990, APEC has been committed to
facilitating development of an information infrastructure across Asia-Pacific.

Benefits to Low Income APEC Countries: Economic growth leads to social

advancement. During the first decade of APECs existence the low income APEC
countries had the following benefits:
(i)

The United Nations Development Programme (UNDP) Human

Development Index for lower income APEC countries improved by about
18 percent.

(ii)

Poverty in East Asian APEC countries has fallen by about a third (165
million people), mostly on account of strong economic growth.

(iii)

About 195 million new jobs have been created in APEC member
countries, including 174 million in lower income countries.

(iv)

Infant mortality has fallen and life expectancy has improved in lower
income APEC countries on account of significant improvement in access
to sanitation and safe water, and expanding public expenditure on health.

(v)

There has been heavy investment in human capital with rising education
enrolment ratios and growth expenditures on education.

PROBLEMS FACE BY APEC:

It was hard to imagine that only less than ten years after its creation in 1989,
APEC would face a pertinent question about its continued existence like this. Is it
that APEC was moving too fast? Or could it be that the spectacular success of
APEC in the first 5-6 years of its existence had raised the level of expectation that
is too difficult for APEC members to fulfil or keep up? This last point is not
difficult to see. After an uncertain start regarding whether the 'Pacific' side of the
current APEC members, especially the US, should be involved and included in this
new regional grouping, APEC had found its innovative niche of 'open regionalism'
where voluntary and unilateral liberalisation in trade and investment has become
its well known hallmark. (Whither APEC 2005problems and prospects of APEC
,halfweay through BOGOR goals by Medhi Krongkaew p 1)The advent of the
'informal' Economic Leaders Meeting in 1993 by the US in Seattle had given
APEC its international profile that challenges the annual G-7 world economic
leaders meeting.
This was followed by the Bogor Goals in 1994, the Osaka Action Agenda in 1995,
and the Manila Action Plan in 1996. By then, in 1995, the World Trade
Organisation (WTO) has come into being, with its first impressive success on
global Information Technology Agreements (ITA) at the end of 1996. But even

with this first success of the WTO, it is hard to see that this has in any significant
way diminished the importance and promise of APEC. And it should not be, as the
overall tone of the book was that there was still good future ahead of APEC. Now
in 2005, this same question was asked again of APEC: To what situation is APEC
heading? Or, what will become of APEC now or a few years from now? This time,
however, it looks as though the problems facing APEC are more serious. Nothing
equally spectacular as the Bogor Goals or the Osaka Action Agenda has come out
of APEC since 1997. 1 To make the matters worse, East Asia was caught in
debilitating economic crisis in 1997 and 1998, rendering the Leaders Meeting in
1998 a very strained and awkward event. and moreover with the attacks on USA 20
September 11,2001 the profile on APEC has further been dampened and it is time
to think for the APEC leaders as to what the future of APEC is to be .

MAJOR PROBLEMS FACED BY APEC SINCE FORMATION

The world is a global and social one that can bring cooperation among members of
the society irrespective their indifferences that range from political, economy,
religious, culture and traditions to name a few.
Therefore member countries in the Asia and Pacific thought it wise to form an
economic cooperation with the general aim of promoting world trade; reduce
trade barrier, open investment opportunities, ease the exchange of goods,
services, resources and technical know-how, and strengthen economic and
technical cooperation among its members.
Thus, this brought about the formation of the Asia-Pacific Economic cooperation,
(APEC), with the sole aim of fostering economic ties and cooperation among its
members.
As the name implied it is a regional cooperation that comprise of 90% Asian
countries economies and also 10% of other members within the Pacific region.
APEC member-economies include the major economies of the region and the most
dynamic and fastest-growing economies in the world. The 21 economies together
constitute more than half of the world's annual output and almost half of the
world's total merchandise trade, this is seen by many critics and economics as
threat to non-FTA members.Maybe APEC is too large, too diverse. It's different

from the European Community which can deepen cooperation because the
countries have a real historical identity," says Thai political scientist Prapas
Thepchatri. "I'm afraid APEC has no identity, no vision to move forward to
become what? An Asian-Pacific community? That's maybe too abstract."

APEC CHALLENGES
In spite the contributions of APEC to the economic development and
sustainability of the Pacific Rim, it is also confronted by a number of
challenges. This calls for continued initiatives in order to improve the
economic situation and to be able to help the organization establish a
brighter economic condition in the future. One of the challenges identified to
confront the organization is on how it is going to manage globalization as
such is seen to have a significant effect on its member countries. The
organization is also facing the challenge of how it will be able to effectively
manage regional and bilateral free trade agreements which is very critical in
the trading activities of member countries.
Another challenge which should be overcome by APEC is its initiative to be
able to create a free and open trading to its region. Until now, efforts to be
able to help achieve such objective are seen to have remained ill defined.
There is a need for APEC to realize that it needs modifications with regards
to agenda-setting mechanism and procedures. The organization would need
to set it eyes towards goals for the longer years and bring the goals into
reality such as the achievement of free trade.
This year, APEC faces a greater challenge as the deadline is already set for
the achievement of the Bogor goals, which is the establishment of free trade.

This is apart from other challenges which will confront the organization in
succeeding years such as the threat from protectionism and lack of trust on
financial institutions. To be able to recover from the financial crisis which
hit the economy in the previous years, there is a great challenge not only to
attract dynamic investments to boost the economic situation on the Pacific
but also to bring back the trust into institutions of finance. By this way, it is
acknowledged that a better business will be on its way. Furthermore, the
member countries are also challenged to be able to improve its current
standings on the World Bank's Ease of Doing Business Index. Through this,
it is anticipated that more investments will come in as a means of improving
financial condition. Several APEC economies are already included in the top
five an din the top twenty of the list which is a good indication of the fruitful
years to come for the region. A challenge is also posed to address the
growing disparities between the urban and rural regions especially with
regards to levels of education, social inclusion, and health care provision.

CHAPTER 5
CONCLUSION

CONCLUSION
APECs focus has shifted recently to place greater emphasis on behind-the-border
structural policies in promoting regional economic integration, in addition to
APECs traditional focus on at-the-border trade and investment liberalisation and
facilitation, and macroeconomic and financial policies.
Results presented in this project suggest that behind-the-border policy settings,
including the quality of regulations and costs of doing business, impact on the rate
of economic growth convergence in the APEC region.
We conclude therefore that APECs recent emphasis on improving the quality of
behind-the-border policies, most notably through the work of APECs Economic
Committee and the implementation of LAISR, complements APECs traditional
emphasis on trade and financial policy issues and provides a more coherent
economic agenda and a more coherent approach to its goals of regional economic
integration and economic growth.

BIBILOGRAPHY

www.google.co.in
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