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Finance

What is APEC?

By O. Wallace
Updated Feb 21, 2024
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The Asian-Pacific Economic Cooperation (APEC) is a cooperative effort of 21 countries with a common goal of improving free trade in this region. First established in 1989 with 12 member countries in Canberra, Australia, APEC has made great strides in facilitating and improving trade among its member countries. In the first decade after its creation, the economies of the member nations accounted for 70% of global growth economically. Its members are, alphabetically, Australia, Brunei Darussalam, Canada, Chile, People's Republic of China, Hong Kong, China; Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Republic of the Philippines, The Russian Federation, Singapore, Chinese Taipei, Thailand, United States of America, and Vietnam.

APEC’s 21 members represent 41% of the global population, 49% of international trade and 56% of the world’s Gross Domestic Product (GDP). There is no treaty to sign, rather APEC functions by consensus and cooperation. It adheres to the “Bogor Goals,” established in 1994 in Bogor, Indonesia. These goals are to have free and open trade and increased foreign investment in member economies by 2010 for developed economies, and 2020 for developing economies.

APEC works to establish anti-“protectionist” policies in member nations by reducing tariffs and doing away with other free-trade obstructions. By pooling resources, member nations can share information, and increase the wealth for businesses and individuals. APEC benefits citizens of member nations by creating more opportunity in the workplace, less expensive goods and services and increasing the ability to participate in the international market.

There are three main areas APEC focuses on:

Trade and Investment Liberalization: In this area, APEC works to reduce tariffs and remove other obstructions to free trade.

Business Facilitation: In this area, the goal is to facilitate business interactions between member nations by reducing the cost of doing business, sharing trade information and improving the relationships of importers and exporters.

Economic and Technical Cooperation (ECOTECH):This program includes opportunities for member nations to improve training and education in international trade.

APEC has met every year since 1993, and in addition to its goals, discusses evolving issues such as women in APEC, terrorism, transparency standards, corruption and pandemics that potentially affect trade. Every year, one member country plays host to the meeting. APEC is funded by a relatively small annual contribution from each member country, totaling approximately $3.38 million US Dollars (USD) per year. These funds pay for APEC programs as well as a small Secretariat located in Singapore. Leadership in the Secretariat rotates, depending on who is hosting the meeting that year— the Executive Director is from the host country that year, and the Deputy Executive Director is from next year’s host country.

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Discussion Comments

By anon276560 — On Jun 25, 2012

Where does it get its funds from? I need to know.

By Mor — On May 31, 2012

@pleonasm - It's not usually APEC that gets protested, although the individual leaders at the APEC meeting might draw a crowd.

APEC itself, while it does seem to have been good for the members, is usually criticized more because it doesn't really seem to achieve all that much.

In fact what APEC seems to be most famous for is that photo they take at almost every meeting, with all the country leaders dressed up in something relating to the host country. For example, in Peru they all wore ponchos.

But in 2011, at the request of President Obama, they decided to scrap the tradition. I can see his point, as a picture of world leaders in silly shirts when the world is going through a recession might not go down well.

But at the same time, I think it's a shame that they don't get to demonstrate humanity and the ability to laugh at themselves. Personally, I'd rather have someone in charge with a sense of humor than not.

By pleonasm — On May 30, 2012

I'm actually surprised that the APEC countries don't account for more of the world's population and trade goods, considering that it includes Russia, China and the United States.

But I've never paid all that much attention to it before. Every now and then you'll hear about the APEC leaders meeting, and maybe about some protests that are going on because of that, but economics always seems like such a difficult subject to understand.

It's good that they are increasing wealth and trade for all the countries involved, but I do wonder whether they take human rights records and things into account when countries agree to be involved in free trade with each other. There are a few on that list that seem like they wouldn't want to be involved with the others. I guess it would be difficult to resist though if everyone else in the region was participating.

By indigomoth — On May 29, 2012

One interesting thing about APEC is that the member states have all agreed to allow business people from the countries to have a special travel business card.

All you have to do is prove that you're involved in business, that you have to travel a lot between the member states and that you're of good character.

Then, they will issue you a card that means you don't have to get visas to visit any of the member countries, or even stand in line in immigration when you arrive off the plane.

You can just go straight on through, which is a real plus when you're visiting several countries in a row.

It almost makes me want to become a business person so that I can have the card! I'm not sure at what level you'd have to be though, since I'm sure they probably don't issue them to people who are just selling jewelry out the back of their car.

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