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Commentary

Apec and its (ir)relevance

12:08 AM December 02, 2015

As if to spur our objective of aspiring for a better and more competitive economic position to which the rest of the world will look up, the Philippines hosted the Asia-Pacific Economic Cooperation leaders’ summit for the second time in the past two decades. Since its birth more than 26 years ago, and from a measly membership of 12 Asia-Pacific economies, the Apec has grown to a strong 21 members whose main goal is to promote full cooperation in all aspects of development not only within the region but the rest of the world as well.

Stimulating development is the constant drive of many regional and world economic forums, much like what the Apec has been doing. Thus, the Apec is nothing more than a blown-up, overrated free-trade scheme. In effect, it is a second-rate copycat of the bilateral trade agreements that countries maintain with their allies—agreements that, because bilateral, are more specialized and more intimate in scope, and are given higher priorities than the much bigger but “less specialized” Apec.

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The truth of the matter is that the Apec merely duplicates the function of other trade and economic organizational forums in terms of trading advantages and benefits. It boils down to the implementation of a freer market, or an open-port policy, that all these forums have long been espousing, under which members’ goods are free to enter the trading partners’ territory sans tariffs and duties that normally hinder liberalized cross-border transactions. So what do Apec member-economies stand to lose without the Apec? Literally, none, because in the modern world, all kinds of diplomatic alliances have existed and still exist, such as the Multilateral and Bilateral Trade Agreements, General Agreements on Tariff and Trade or the GATT, Asean Economic Integration, not to mention full globalization, plus the Apec. Each of these is a mere duplicate function of the other—trade diplomacy and a freer market that can exist and has been existing prior to the Apec’s inception.

Much has been said about the Apec’s benefit as far as regional growth is concerned: “Its 21 member-economies are home to around 2.8 billion people and represent approximately 57 percent of world GDP and 47 percent of world trade in 2012.” Its regional influence is expected to be enormous—but has the region, particularly the slowly emerging economies like the Philippines, benefited from its influence?

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For more than 26 years, barriers to trade have been mowed down by the Apec, but such actions benefited only the traditionally developed countries and discriminated against the developing countries, almost all of whom are ill-prepared to compete with the giants of the trading world. It need not be said that multilateral agreements are meant to spice up and magnify the advantages of these advanced economies, to the trading disadvantage of the “emerging economies.” Weaker markets like the Philippines are put at the losing end, in effect being told: “If you have nothing competitive to sell to the world market, you might as well buy”—an implicit way of making us a dumping ground of foreign goods, to the detriment of the local economy.

Of course, the prestige of being part of a “bigger world” is a bragging right of Apec members. But to aspire for something bigger that will change the landscape of the local economy and gear it toward the direction of economic development is wishful thinking. The Apec is a mere deodorant meant to sanitize its own stench.

Of course, we should acknowledge the fact that a trading agreement such as the Apec has built an aura of camaraderie among member-economies. But besides the camaraderie that is granted according to a member’s regional stature comes the priority or interest of the country it represents and swore to protect. This interest transcends personal and diplomatic protocol. Therefore, the free trade that the Apec primarily promotes merely comes second to the local trading policy, because it may run counter to what the trading agreement entails.

Apart from the remunerations supposed to be drawn from being a member of the Apec (which up to now remain unfelt), what are the concrete outputs that Filipinos can draw from it? Have their lives changed? What about the Philippines’ self-rated poverty, afflicting about 50 percent of the population, that has remained unchanged? Or the incidence of hunger that grew in the third quarter, plus the unemployment that has lingered and remained high by any standard despite the economy’s growth? In the many years of the Apec’s existence, the incidence of hunger and unemployment in the Philippines has remained undisturbed, and in fact has worsened. And diplomacy in this economic forum does not guarantee mutual respect, as China has displayed in connection with its inroads in Philippine territory.

To say that the Apec is inevitably needed in the modern world is to make an overstatement. Much has been said about its achievements, but it has done practically nothing for its members’ economic uplift. What it has established is mere lip service intended to promote the interests of its affluent members. If there were investment goodwill earned, it has yet to boil down to the benefit of the grassroots.

The yearly summit that has become a permanent Apec fixture is meant to “cosmeticize” the real intention of “interest countries,” to the disadvantage of “lesser” members who voluntary fall prey to the whims and caprices of this commercial alliance.

EJ Lopez is an associate professor of economics and current chair of the University of Santo Tomas’ Department of Economics.

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TAGS: Apec 2015, asia pacific economic cooperation, Globalization, Growth, trade forums
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