APEC Open Regionalism and its Impact on the World Economy: A Computable General Equilibrium Analysis

Abstract

T HE Asia-Pacific Economic Cooperation (APEC) forum, a loose-knit, 21member regional institution, could assume a more pivotal role in the integration of the Pacific Rim, a market for more than 60 per cent of US agriculture and food exports, and play a central role in promoting global liberalisation (Bergsten, 1997). In 1994, APEC announced its ‘Bogor Declaration’, a plan to achieve free trade in 2010 for developed members and in 2020 for other members. It also pledged that it would pursue such a regional free trade arrangement by promoting ‘open regionalism,’ calling for ‘not only’ ‘the actual reduction of barriers among APEC economies but also between APEC economies and non-APEC economies.’ Such an approach, it is argued, promotes economic benefits not only for APEC members, but also could serve as a ‘building block’ for pursuing the goal of global free trade. Members’ liberalisation plans (known as Individual Action Plans) under the Bogor Declaration were first tabled at the Manila Ministerial Meeting in November 1996 for implementation beginning in 1997. These country plans were updated at each successive Ministerial meeting since then. Peer pressure is used to assure comparability in commitments among the 21 economies as members pursue ‘concerted unilateral liberalisation,’ but in consultation with and under the scrutiny of other members. APEC members called for comprehensive treatment, including controversial sectors like agriculture, but