Pre-Thanksgiving APEC Meeting Highlights Free Trade
Majority of chief executive officers have urged Asia-Pacific leaders to prioritize free-trade and eliminate every barrier thereof.
Establishing a free-trade agreement among the 21 economies of the Asia-Pacific region should be a top priority for the Asia-Pacific Economic Cooperation (APEC), whose summit is ongoing n Honolulu, Hawaii. Two-thirds of the CEOs surveyed by PwC said the APEC leaders should take a lead role in eliminating trade barriers.
The Asia-Pacific Economic Cooperation forum is the premier economic organisation in the Asia-Pacific region. Established in 1989 by 12 economies, APEC fosters growth and prosperity by facilitating economic cooperation and expanding trade and investment throughout the region. APEC’s 21 member economies today account for 55 percent of global GDP.
According to 63 percent of the more than 320 Asia-Pacific CEOs surveyed by PwC, eliminating building blocks to trade among their nations is ‘critical’ to the success of their companies.
“Doing business in domestic Asian markets is quickly becoming the main avenue for growth in the APEC economies,” said Dennis Nally, chairman of PwC International Ltd, who will speak at the opening session of the APEC CEO Summit.
“Free trade among all the nations in the region will reduce their reliance on low-cost manufacturing for export to more mature economies,: Nally added.
To drive growth, CEOs want to expand in Asia’s fast-growing consumer markets and to extend their presence in the evolving markets for services. More business leaders (44%) are making their largest investment over the next 3-5 years in China over any other APEC economy. Nearly one third of planned investments are targeted on expanding capabilities in services by investing in managerial, R&D and financial operations in China.
Other trade-related findings of the survey show that inter-regional trade pacts will play a key role in growth for APEC counties. According to 64 percent of CEOs surveyed, bilateral and regional trade agreements are more important to their company than multilateral agreements.
Protectionist tendencies by their trading partners are a significant barrier to their growth for nearly 30 percent of CEOs, the survey also showed.
More than 60 percent of CEOs say the Transpacific Partnership provides a viable pathway to free trade across the region.
“The change from ‘producer only’ economies to ‘producer and consumer’ markets across much of Asia -Pacific will require deeper capital markets and streamlined supply and distribution channels. That will require unfettered cooperation among the APEC nations and is something CEOs hope their political leaders address at the APEC summit,” Nally said.
Carried out by PwC International Survey Unit, the APEC CEO Survey 2011 was conducted between July and September 2011 covering CEOs and industry leaders in 26 countries, including all 21 APEC economies.