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Apec wide free trade zone on the horizon

21 world leaders met in Hanoi last week to discuss new economic possibilities for the economies participating in the Asia Pacific Economic Cooperation forum. While the talks were informal in nature, the US has let it be known that they are very interested to formalize the APEC agreement into a more binding free trade zone, a so called Free Trade Area of the Asia Pacific, in short FTAAP.

Since talks about free trade at the Doha round came to a halt in July because of disagreements between the EU, US and developing countries over subsidies for the agriculture, the FTAAP is hailed as the an alternative solution. Fred Bergsten from the Institute for International Economics in Washington stresses that it is important for the global economy to have various outlets in which to discuss advances and strategies, just in case one discussion forum brakes down.

A FTAAP free trading zone comprising all the original 21 APEC states would be the largest free trade zone in human history, covering about 60% of global output. While at the moment there is too much political resistance from some of the most important member states like China, the idea has been put on the table. And as an idea alone it might be succeeding in reviving the stalled Doha talks.