Open regionalism going global; APEC and the new Transatlantic Economic Partnership

Abstract

Since 1996, the European Union (EU) has launched several significant initiatives which seek to forge closer economic partnerships with various APEC participants. The 1996 Asia- Europe Meeting (ASEM) initiative has now been followed by the launch of a new Transatlantic Economic Partnership (TEP) to be forged between the EU and the United States. These links will influence the evolution of APEC, the North American Free Trade Agreement (NAFTA) as well as the potential Free Trade Area of the Americas (FTAA). This combination of initiatives could contribute towards the gradual emergence of a global marketplace. On the other hand, since the EU and APEC have adopted very different models of cooperation, these new experiments in inter-regional economic cooperation could also lead to new tensions within existing regional groups. The TEP represents a new approach to the EU’s economic relations with the rest of the world. It does not propose yet another traditional, preferential ‘free trade area” and deals with issues other than the reduction of border barriers to trade. The proposal also indicates clear awareness of the need for the TEP to co-exist and complement other international economic institutions. This combination of features creates an opportunity to encourage the leaders of both APEC and the EU to adopt some new guiding principles for the nature of new cooperative arrangements among groups of economies. Such principles would seek to ensure that new cooperative arrangements among economies were ‘open clubs’ which took adequate account of the interests of others; these principles can build on and generalise the fundamental principles of the World Trade Organisation (WTO) as well as on APEC’s principles of open regionalism, as expressed in the 1995 Osaka Action Agenda. They will also need to be applicable to the full range of international economic transactions, which now extend far beyond trade in goods and services. This paper proposes a set of guiding principles to facilitate closer economic integration among groups of economies are proposed in this paper; under the headings of: WTO-consistency, transparency, non-discrimination, accession and review.