COVID-19 Challenges Highlight the Need to Revive Economic Integration: APEC16/05/2022 46
There is no better time than now for APEC members to revive work on integrating the Asia-Pacific and bringing new energy to the long-term prospect of a Free Trade Area of the Asia-Pacific (FTAAP).
The APEC Policy Support Unit made the statement in a new policy brief.
"The pandemic and the aftermath of COVID-19 have only stressed the significance of regional economic integration," director of the APEC Policy Support Unit, Denis Hew, said, according to a release issued by the APEC Secretariat and received here on Saturday.
"APEC policy makers need to address emerging trade-related issues and challenges in order to realize deeper regional economic integration," Hew argued.
Meanwhile, a senior analyst with the APEC Policy Support Unit, Carlos Kuriyama, who is also the author of the policy brief, said that it is not enough for governments to take decisive action at the domestic level when the world faces a pandemic.
International collaboration has to be a part of the solution, he stressed.
"Most importantly, any regional integration scheme, including free and/or regional trade agreements, could assist to overcome pandemic-related challenges," Kuriyama added.
The report identifies six main challenges affecting trade that are deemed most critical, namely disruption in accessing essential goods, disruption in trade in services, difficulties in supply chain logistics, digital transformation, transparency, and regulatory bottlenecks affecting trade in essential goods.
While some of these disruptions were far more severe during the first stage of the pandemic, the challenges persist.
For example, some of the export restrictions on essential goods are still in place, the services trade has yet to recover to pre-pandemic levels, and cross-border data restrictions have increased globally.
"There’s a need for us to resolve bottlenecks in supply chain logistics. Delays in vessel arrivals have increased by almost 50 percent since the pandemic started and freight rates for 40-feet long containers have skyrocketed by more than 600 percent," Kuriyama said.
The policy brief highlighted that APEC, as an incubator of ideas, could take those challenges into account and incorporate new topics related to the trade in goods, services, trade facilitation and digital issues, among others, into the FTAAP work program.
Member economies could come together and collectively commit to not implement export restrictions on essential goods and ensure their availability for commercial purchase, Kuriyama suggested.
They could also ensure that airports, ports, customs, and border facilities remain operational during pandemics.
"There is also a need for APEC economies to facilitate the movement of essential workers, including aircrews and maritime seafarers across borders," he said.
"Border cooperation and technical assistance needs to be strengthened by adapting modern technologies and paperless procedures," he added.
Important to the future of work and trade is digitalization. According to the report, modern trade rules for data privacy, data localization, cross-border data flows, and electronic commerce -- such as consumer protection, electronic payments, and electronic signatures, among others -- are needed to foster the digital economy.
"While the pandemic has accelerated structural changes in the economy, APEC is in a position to influence the global trade agenda," Kuriyama said.
"APEC encourages the resilience of economies by undertaking collective initiatives, including capacity-building activities, in areas of growing interest. We must seize this momentum to achieve a more inclusive and sustainable future," he added.