Great Minds Think Alike

2014 APEC Summit revealed strategic aspirations of all major regional players. Countries push and bid on different initiatives of regional free trade integration, thus creating a massive stumbling block – a choice between American TPP and Chinese FTAAP. RIAC team has asked experts from China and Singapore to comment on the recent summit and give their expert opinion.

2014 APEC Summit revealed strategic aspirations of all major regional players. Countries push and bid on different initiatives of regional free trade integration, thus creating a massive stumbling block – a choice between American TPP and Chinese FTAAP. RIAC team has asked experts from China and Singapore to comment on the recent summit and give their expert opinion.

Xu Wenhong

Dr. of Science, Research Fellow from the Institute of Russian, East European and Central Asian Studies at the Chinese Academy of Social Science, Visiting Scholar at Stanford University

At the APEC Beijing Summit 2014, the different understandings of FTAAP and TPP had become the key issues that attracted worldwide attention. If compared to TPP, FTAAP is a pan Asian-Pacific, inclusive free trade plan, where all major players on Asian-Pacific market (e.g. Japan, South Korea, Russia etc.) are included. While TPP does not embrace China and Russia. On top of that, Japan has some disagreements with the US on “fully open agro-products market”.

Dr Xu Wenhong

At the APEC summit 2014 in Beijing, the FTAAP achieved important breakthroughs. South Korea gave FTAAP a big push by signing the preliminary agreement of the Sino-Korean FTA. If Japan does not join FTAAP, then it could not compete with Korean products on huge Chinese market and that might be a big loss for Japan. So, sooner or later, Japan will have to join the FTAAP. Russia is also willing to explore the East-Asian market. Great minds think alike, as least on these issues.

Chinese leader Xi Jinping said, “The endorsement of the roadmap for promoting the Free Trade Area of the Asia-Pacific (FTAAP) process at Beijing APEC Summit was a decision to be written into history books”.

Dr Ooi Kee Beng

Deputy Director, Institute of Southeast Asian Studies (ISEAS), Singapore

Dr Ooi Kee Beng

At the APEC Summit 2014 Beijing showed that it was holding the initiative where regional mechanisms of trade integration was concerned. While Washington is making slow progress on the TPP with its tough conditions, the Chinese are moving smoothly on several aspects of the FTAAP. President Xi Jinping’s strong stance for a Free Trade Agreement for Asia-Pacific was appropriately brought up and advocated at the Summit given that the original goals of APEC are to promote free trade throughout the region. This move followed closely the launch of the China-led Asian Infrastructure Investment Bank (AIIB) in October 2014 which saw 21 countries backing what most see as a direct challenge to the USA-led World Bank and the Japan-led Asian Development Bank. Major players such as Japan, South Korea and Australia stayed away from Beijing on that occasion as expected, but nine out of the ten ASEAN countries signed up. Even India came on board as the second largest shareholder.

President Xi’s announcement at a post-APEC investment forum to improve connectivity in all possible ways along traditional continental and maritime “Silk Roads” was another strong strategic move and made this year’s APEC Summit a game changer.