At the 22nd APEC Economic Leaders’ Meeting recently convened in Beijing, the member economies decided to approve a roadmap for APEC’s contribution to the realization of the Free Trade Area of the Asia-Pacific, marking the official launch of the FTAAP process.

The FTAAP can promote economic cooperation in the Asian-Pacific region under the framework of APEC and provides a third option to potentially resolve the conflict between two major proposed free trade agreements—the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership Agreement.

It also maintains China’s leading role in the process. China’s initiative to develop a roadmap for FTAAP offers a wider range of options for economic integration in the region in addition to the Regional Comprehensive Economic Partnership and the China–Japan-South Korea FTA.

The FTAAP can start with the issues on which member economies have reached or are able to reach a consensus while prioritizing the areas that are in the interest of most members. Once a solid foundation is achieved on this basis, economic integration can gradually be advanced from there.

Though a timetable has not been agreed upon, the implementation of the FTAAP should be started at least by the deadline of the adopted Bogor Goals that aim for free and open trade and investment in the Asia-Pacific by 2020. And the feasibility research and negotiations on the FTAAP should be completed sometimes in the next five years.

Other problems remain to be solved, such as sub-regional trade arrangements, public-private partnerships as well as economic and technological cooperation. For instance, cooperation on technical innovation, assistance and transfer should be promoted to narrow the gaps in economic and social development among all members.

In addition, other measures are needed. On the borders, trade and investment barriers should be removed to increase market access. With regard to cross-border trade and investment, costs should be lowered and association in the region should be promoted. Within the borders of potential member states, further integration of regulations and structural reforms are necessary to provide better conditions for business.

Furthermore, given the complexity of geopolitics in the region and the existing network of FTAs, there are still divergences of opinion and stumbling blocks in terms of feasibility research and follow-up work. The attitude of the United States in particular is significant because it regards the Trans-Pacific Partnership as the basis for the FTAAP, which is meant to offer an independent path to regional economic integration free of the influences of other major powers.

The United States contends that the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership are incompatible with the FTAAP in their present forms.

It holds that negotiations on the Trans-Pacific Partnership are likely to conclude around the end of this year. Nonetheless, the Regional Comprehensive Economic Partnership is in its initial stage of negotiations, and its member states include the least-developed countries as well as India, which tends to be intransigent in international trade negotiations, adding to uncertainty about whether or not agreements can be reached by 2015.

By virtue of the Trans-Pacific Partnership, the United States hopes to press other economies of APEC into accepting the new rules for trade and investment based on the global value chain. This indicates that the United States does not oppose the establishment of the FTAAP. But it insists that FTAAP should conform to the high standards of the Trans-Pacific Partnership, especially in terms of transparency, competition and exchange rates, whereas developing economies, China included, are cautious about these clauses.

Another uncertainty of promoting the FTAAP is how to deal with the relations among the three regional trade agreements. The common development of the FTAAP’s predecessor trade agreements through competition, complementation and more effective negotiations among members is the key to realizing the FTAAP.

Translated by Ren Jingyun