Asia-Pacific Economic Cooperation (APEC) | IAS Target IAS Target

Asia-Pacific Economic Cooperation

Asia-Pacific Economic Cooperation (APEC) is an inter-governmental forum for Pacific Rim member economies that promotes free trade throughout the Asia-Pacific region. India is not a part of this group. Inspired from the success of the Association of Southeast Asian Nations (ASEAN)’s, the APEC 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; and to establish new markets for agricultural products and raw materials beyond Europe. In APEC, all economies have an equal say and decision-making is reached by consensus.
  • The founding members were:

    Australia; Brunei Darussalam; Canada; Indonesia; Japan; Korea; Malaysia; New Zealand; the Philippines; Singapore; Thailand; and the United States.

  • Other members joined later:

    • Chile joined in 1994
    • China; Hong Kong, China and Chinese Taipei joined in 1991.
    • Mexico and Papua New Guinea in 1993.
    • And in 1998, Peru Russia and Vietnam joined.

Headquartered Singapore
Establishment 1989
Members 21
Observer of APEC ASEAN secretariat, pacific economic cooperation council, pacific islands forum secretariat

Some facts about APEC

  • Real GDP USD 42 trillion (2015)
  • Around 2.8 billion people
  • Further, per capita income in the region rise significantly

Objectives:

  • To support sustainable economic growth, economic-technical cooperation and prosperity in the Asia-Pacific region.
  • Enhance security and defence cooperation
  • Promote free and open trade and investment
  • Promote and accelerate regional economic connectivity and integration among member countries
  • Focusing on growth that is sustainable, inclusive but not adversely impact environment. So focus also on climate change for environmental health.

Challenges

  • Lack of implementation
  • Development gap
  • Exclusion of India
  • Creation of Sub-Regional Agreements
  • Unclear goal and agenda
  • Trade war
  • Free trade areas
  • Non-binding nature

India and APEC

  • India has requested membership in APEC and received initial support from the United States, Japan, Australia, and Papua New Guinea. Although, India did not join APEC, because India doesn’t border the Pacific Ocean, which all current members do.
  • The US recently renamed its Pacific Command to the Indo-Pacific Command as it seeks to give teeth to its Indo-Pacific policy. So APEC become important in India's strategic policy matter
  • India was invited to be an observer for the first time in November 2011.
  • Speculation of different trilateral groupings in the Indo-Pacific theatre, like the India-Japan-US, India-Australia-Indonesia, and India-Australia-Japan, etc
  • Singapore, Vietnam, and now Indonesia are key partners in the region for India. This will also involve the Quad and taking this new grouping to the region.

India not part of APEC, and reason given:

  • India not share pacific ocean border
  • Non-consensus among member countries
  • India's large trade deficit
  • India economy not integrated in the global system (given in 2007)

Recent APEC meeting result

  • Source of disputes Trump's USA 1st policy, China's BRI, trade dispute, etc
  • Trade war threat also loom after both largest economies started tax on other countries import
  • Breaking with more than a quarter-century of history, the Asia-Pacific Economic Cooperation (APEC) organisation wrapped up its summit with no joint communiqué issued