More time needed to establish Asia-Pacific free trade zone

Beijing (China)—At the forthcoming informal meeting of leaders of the Asia-Pacific Economic Cooperation (APEC), the proposal to establish an Asia-Pacific free trade zone will be particularly noteworthy. The United States and some other developed countries have shown a great willingness to endorse this proposal. However, most developing countries show little enthusiasm for the plan.
It was in 1995 that the idea of an Asia-Pacific free trade zone was first discussed at a meeting of the APEC Eminent Persons Group. In May 2004 the APEC Business Advisory Council (ABAC) formally proposed establishing an Asia-Pacific free trade zone.
In addition to adapting to changes in the international situation and regional economic development, there are also some political and strategic considerations to be taken into account in this proposal. As it is difficult to promote voluntary trade and the investment liberalization of APEC, developed nations are trying to replace the voluntary commitment and peer pressure mechanism with a new negotiation mechanism that is more binding. As the world's only superpower, the United States is worried that they may be excluded from the process of economic integration in East Asia, and that they may one day meet resistance in Asia. According to its Institute for International Economics, after the establishment of the East Asia Free Trade Zone, the United States is likely to record a trade loss of $25 billion every year. For the US, this is the "danger of demarcation in the Pacific". With the year 2010 approaching, developed country members are under increasing pressure to liberalize trade and investment.
Although the idea of an Asia-Pacific free trade zone has been raised, there is still a long way to go before it is actually realized. This is firstly because APEC hasn't yet reached any consensus on the establishment of an Asia-Pacific free trade zone. The United States, Canada, Australia, Chile, New Zealand, Singapore and some other APEC members support the plan, while China, Japan, Malaysia, Indonesia and other members have expressed reservations. Most developing members worry that such a goal will impact on WTO global trade negotiations. Developing economies need to prepare even longer for the competition. Furthermore, the level of economic development among members varies greatly. Each country has different interests and these are not easy to coordinate.
The second reason for delay is that it remains unclear whether or not a free trade zone would actually help resolve the issue of trade barriers on sensitive products. APEC has been promoting voluntary commitment, unilateral trade and investment liberalization. If progress is made in a new round of multilateral talks, would it still be worthwhile proceeding with negotiations to establish a free trade zone? If an agreement cannot be reached within the multilateral trading system on sensitive areas--such as farm products--it will be even more difficult to complete this task within the framework of the Asia-Pacific free trade zone.
Thirdly, the issue of leadership poses challenges. Due to a disparity in the level of development among APEC member countries, different political systems and historical viewpoints, neither the EU model nor the North American model is a viable option for APEC. It has been the experience of all the other free trade zones that the bigger powers usually have more bargaining power when it comes to determining a model for the region's development. Developing countries are consequently likely to worry that developed countries will take command of the free trade zone.
Finally, it is not easy to standardize an agreement for so many countries. There are currently more than 20 free trade zones and regional trade agreements between APEC nations. More such arrangements are currently being negotiated. However, many of the free trade arrangements overlap, which increases the costs of coordination.

—Daily Mail, People’s Daily news exchange item