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What is APEC?

Formed in 1989, the Asia-Pacific Economic Cooperation is a group of 21 local economies located within the Pacific Rim that promotes free trade and sustainable development. Similarly to the EU (European Union), APEC exists to reduce tariffs and improve trading efficiency within member economies.

What countries are currently APEC members?

The idea for APEC was inspired by the post-ministerial ASEAN conferences that took place in the mid 1980s. These conferences proved how valuable having representatives of neighbouring countries coming together to discuss and debate trade and other matters could be. 

The founding members were Australia, Brunei, Canada, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and the United States. In the years since, China, Hong Kong, Taiwan, Mexico, Papua New Guinea, Chile, Peru, Russia and Vietnam have also joined.

Note that it’s largely due to the inclusion of China and its disputes over the status of Taiwan and Hong Kong that APEC refers to its members not as states, but as economies. 

What are APEC’s goals?

The primary goal of APEC is to establish free trade and investment within the region. It aims to achieve this through three central pillars first established in 1995 after the annual meeting in Osaka, Japan. These three pillars comprise the “Osaka Action Agenda”.

  • Trade and investment liberalisation: Every member economy agrees voluntarily to liberalise one of 15 states’ areas of trade and investment.

  • Trade facilitation: Aims to simplify and reduce the cost of business within the region, this pillar largely deals with areas such as energy, telecommunications, fisheries, government procedure and general trade.

  • Economic and technical cooperation: Often shortened to “Ecotech”, this refers to member economies working to improve the “economic and social wellbeing of all people” by instilling a culture of cooperation in all economic and technical areas.

There are currently around 250 listed activities that have slowed significantly since the turn of the century. This is due in part to all 21 member economies often being unable to reach a unanimous decision.

What has APEC achieved so far?

In the 30-plus years since it was launched, APEC has not only improved local trading in the Asia-Pacific region but has helped to close the gap between developing and developed countries, helped combat climate change and even dismantle terrorist networks. Above all else, though, it’s a forum that promotes free trade, economic transparency and integration.

Where does APEC meet?

Every year the meeting is rotated among members’ economies. The first meeting was held in Canberra, Australia, in November 1989 and led by then Prime Minister Bob Hawke. The most recent meeting was in Kuala Lumpur, Malaysia, in November 2020 and led by Prime Minister Muhyiddin Yassin. The next meeting is due to be held in Auckland, New Zealand, in November 2021 and will be hosted virtually by Prime Minister Jacinda Ardern, due to the ongoing COVID-19 pandemic.

APEC sub-groups

Several micro causes and sub-groups have spun off in recent years and aim to advocate and bring awareness to more specific issues. These include, but are not limited to gender issues, intellectual property rights and preparedness for natural disasters, which is of particular concern to many Asian economies.

Could APEC expand in the future?

More than a dozen economies have already applied for membership, including Sri Lanka, Bangladesh, Pakistan, Columbia and Costa Rica. India has formally requested membership status and received support from the US, Japan and Australia. However, its application was denied because India doesn’t border the Pacific Ocean. It was invited to observe the meeting in Honolulu, Hawaii, in 2011 hosted by then US President Barack Obama.

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If you’re interested in learning more about the financial logistics of dealing and trading within APEC member economies, then get in touch with our expert. Find out how GoCardless can help you with ad hoc payments or recurring payments.

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