key term - APEC

Definition

APEC, or the Asia-Pacific Economic Cooperation, is a regional economic forum established in 1989 that aims to promote free trade and economic cooperation among its member economies across the Asia-Pacific region. It includes 21 member economies, which account for about 60% of the global GDP and 47% of international trade, making it a significant player in global economic dynamics.

5 Must Know Facts For Your Next Test

1. APEC was founded in 1989 in response to growing interdependence among Asia-Pacific economies, originally starting with 12 members.
2. The APEC summit brings together leaders from member economies annually to discuss and promote trade liberalization and economic cooperation.
3. One of APEC's key initiatives is the 'Bogor Goals,' set in 1994, which aim for free and open trade and investment in the region by 2020 for developed economies and 2025 for developing economies.
4. APEC operates on a non-binding basis, meaning that decisions made during meetings are not legally enforceable but serve as guidelines for member economies.
5. In recent years, APEC has also focused on issues such as sustainable development, innovation, and inclusive growth to adapt to the changing global economic landscape.

Review Questions

• What are the primary goals of APEC and how do they benefit its member economies?
  • The primary goals of APEC include promoting free trade and economic cooperation among its member economies. This benefits the members by facilitating increased trade, reducing tariffs, and encouraging investment opportunities across the region. By working together, APEC members aim to create a more integrated economy that boosts growth and stability in the Asia-Pacific region.
• Analyze how APEC's non-binding structure impacts its effectiveness in achieving economic cooperation among member states.
  • APEC's non-binding structure allows member economies to participate without the pressure of legal obligations, which can foster open dialogue and collaboration. However, this lack of binding commitments can limit the effectiveness of APEC in enforcing compliance or addressing conflicts among members. As a result, while APEC promotes consensus-building and collective action, it may struggle to implement measures that require strict adherence.
• Evaluate the role of APEC in shaping global economic trends and its influence on international trade agreements beyond its member states.
  • APEC plays a crucial role in shaping global economic trends by fostering discussions on trade liberalization and collaboration that often extend beyond its member states. The forum serves as a platform for dialogue that can lead to multilateral trade agreements like FTAAP. By setting a precedent for economic cooperation, APEC influences how countries negotiate trade deals and align their economic policies, thereby impacting global trade dynamics significantly.

Related terms

FTAAP: The Free Trade Area of the Asia-Pacific, a proposed regional trade agreement intended to promote free trade across APEC member economies.

Bilateral Trade Agreements: Trade agreements between two countries that facilitate trade by reducing tariffs and other barriers to exchange.

Regional Integration: The process by which neighboring countries enter into agreements to enhance economic cooperation and reduce trade barriers among themselves.