APEC is becoming increasingly significant in addressing contemporary trade and investment issues, with a strong focus on regional economic integration. Despite challenges like US tariffs and rising protectionism, APEC remains steadfast in advocating for economic openness while promoting inclusion and sustainability across its member economies. As part of its 2025 agenda, APEC embraces digital technology and services to address regulatory variations and differing standards that impact trade, aiming to foster greater cooperation and sustainable growth throughout the Asia Pacific region.
The Asia-Pacific Economic Cooperation (APEC) has never been more important. It is organised around the right set of principles. It has the right modus operandi for modern issues in trade and investment, particularly in services. It has the right membership to engage the debate on the value of openness. And it has the right level of participation to get things done.
The scene for APEC in 2025 was well established under the leadership of Peru in 2024, with the opening meetings of the year in South Korea having concluded in March.
The APEC leaders’ 2024 concluding statement in Peru referred to their ambitions for deeper regional economic integration, a traditional focus in APEC. For the group, the significance of this topic is not diminished. The leaders attached a separate statement calling for more progress on the development of the concept of a Free Trade Area of the Asia-Pacific.
This is an important outcome, achieved despite the observation that various constituencies in some high income economies in APEC now question the value of openness, given its costs of adjustment and its apparent lack of contributions to growth.
Amid current challenges facing international economic collaboration and trade, including US President Donald Trump’s tariffs, APEC’s role in articulating the continuing relevance of economic integration — and how to get there — is more important than ever.
The meeting of trade ministers planned for May 2025 is critical. There are very few other occasions for the group to meet this year. A key task will be for the rest of the region to make clear the destructive feedback loops that follow from the regime shift in the United States’ approach to trade. The meeting also offers the chance for the region to refine its cooperative options for responding and identify new opportunities for deepening their own integration.
APEC also has a long history of attention to inclusion, another topic which was on the agenda in Peru. It has long been an interest of leaders — the 1994 Bogor Declaration referred to the goal of equitable growth some 30 years ago. Over the decades, APEC’s work on inclusion has encompassed the interests of a variety of groups in society based on location, sex and health, and more recently in relation to ageing populations. Under Peru’s leadership in 2024, APEC produced a roadmap on the informal economy to enhance inclusion and productivity growth.
Reflecting other interests of their domestic constituencies, APEC leaders sought progress on responding to climate change and achieving sustainable growth.
Sustainability has been on the APEC agenda for some time, but even more so since the adoption of the Putrajaya Vision 2040 in 2020. It has tackled the perception that trade and the environment are necessarily at odds. It developed pioneering lists of environmental goods and services and considered how trade measures can be used to address environmental challenges such as climate change. It has sought to remove impediments to the supply of sustainable finance and to tackle others to build greener economies. In 2023, APEC agreed on non-binding guidelines aimed at reducing barriers to trade in marine debris clean-up services.
APEC’s work on environmental issues is more important than ever, given concerns that climate change effects could impede development.
Integration, inclusion and sustainability add up to a large agenda which will require attention to challenging trade-offs. But APEC is well-placed to respond, through its combined experience and its processes.
The other big agenda item is the application of digital technology. APEC leaders in Peru reiterated the value of the APEC Internet and Digital Economy Roadmap, noted the key potential of AI, stressed the importance of infrastructure and skills for participation and noted the link between digital technology and inclusion and sustainability. APEC’s collaborative way of working can help to deal with issues such as regulatory divergence and variations in standards, which have big effects on trade.
In sectoral terms, these developments matter hugely for services. The most rapidly growing part of world trade in recent years has been digitally deliverable services. The sector offers opportunities for employment and growth across all economies, not just the large or wealthy ones. But tackling the impediments to trade, especially those relating to regulation, will be critical.
Important APEC tools which can help deliver this agenda are up for renewal next year, including the APEC Services Competitiveness Roadmap — which runs out in 2025 — and the APEC Agenda on Structural Reform. The Internet and Digital Economy Roadmap also runs out in 2025. Progress on these APEC roadmaps and work programs is an indicator to watch in the context of the pressures on economic collaboration and trade.
Given its history of innovation, focus on inclusion, role in standard setting and investment in infrastructure, South Korea has much to offer this year. It will also host a Structural Reform Ministerial meeting as well as a Digital Ministerial meeting, which offers the scope to continue to talk about a framework for digital trade, as well as digital inclusion. At the same time, the APEC process provides space for economies to move forward in their own way — consistent with an overall agreed approach — which will be significant for digital policy development.
Source: East Asia Forum
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<p>Time: 2024 By: Ministry of Industry and Trade</p>
