APEC MEMBERS ENJOY DE FACTO INTEGRATION

SINGAPORE, Nov 9 (Bernama) -- Economies in the Asia-Pacific Economic
Cooperation (Apec) do more trading with each other although the organisation
does not have a binding trade agreement, according to an independent research
completed last month.

"The impact of Apec membership on trade is comparable to that of a free
trade agreement, even without a binding agreement," said the ongoing Apec
meeting secretariat, which revealed the research findings here Monday.

The independent research team had tackled the much-debated question: Does
Apec really make a difference to trade?

The report's analysis revealed that Apec members traded with each other more
than they did with other free trading agreement partners and much more with
trading partners who were both members of Apec and members of the World Trade
Organisation (WTO).

This demonstrated the high level of de facto integration between members of
Apec, even under non-binding arrangements, the secretariat said quoting the
analysts.

After taking into account the usual factors that influence trade such as
size of economy, distance between economies, WTO membership and being in an FTA
with a trading partner, the research said Apec members were three times more
likely to export to another member than to a non-member and two times more
likely to import from another member than from a non-member.

The findings were further supported by a five-fold increase in trade within
Apec since its establishment in 1989 and the 67 per cent share that
intra-regional trade comprised of total APEC trade.

Notably, this was a larger intra-regional share of trade than that in the
European Union.

This provided analytical evidence that Apec achieved results, said Philip
Gaetjens, Director of the APEC Policy Support Unit, the team responsible for
the report.

"It shows that regional integration is strong and has prospered under a
voluntary and non-binding approach to enhancing trade," he added.

Apec member economies have virtually eliminated tariffs and continue to find
ways to reduce trade barriers.

Apec has been exploring the possibility of a Free Trade Area in the
Asia-Pacific (FTAAP).
-- BERNAMA