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APEC should stick to basic principles of multilateralism, liberalization: Aussie economist

Xinhua | Updated: 2017-11-04 10:06

CANBERRA — In the office of Peter Drysdale, the emeritus professor of economics of the Australian National University (ANU), one can hardly miss a car plate, which reads "APEC Daddy."

Drysdale dismissed it as a joke from his students, but it is actually a tribute when one aware that it is widely recognized that Drysdale's books served as the intellectual foundation of the Asia Pacific Economic Cooperation (APEC).

When this year's APEC?meeting is about to open next week in Vietnam's central port city of Da Nang, Drysdale urged the participating leaders to reiterate with clarity and resoluteness APEC's guiding principles of open regionalism, open international economy and multilateralism.

"That's the most important thing for APEC in Vietnam," he said. "The test for this APEC is whether to declare firmly for open regionalism, and multilateral trading arrangement, so the kind upon which APEC prosperity is built."

APEC was established as a platform to collectively reinforce liberalization, and as a platform to keep the support at that time for the World Trade Organization (WTO) and again through the Uraguay Round of trade negotiations successful. Drysdale said it remains a cornerstone of the prosperity of the whole Asian economy.

"If we retreat from those principles, if we allow to be pushed away from the principles, if we show weakness in defending those principles, then we challenge our own prosperity, we challenge our own peaceful inter-dependence. So that's why APEC is so important."

He noted that the US economic data are picking up, recovery is underway, but the recovery is still very slow and fragile. Under this circumstance, the politics of the industrialized countries especially in North America and Europe pose great challenges to those APEC principles.

"China's stance is incredibly important at this particular time not only for APEC but also for itself because as part of its reform agenda, to achieve its full economic potential, it'll have to undertake significant reforms."

He believed China is committed to deepening its reform.

"Big reforms in China would be in the service sector, the financial sector. Those are the things that are important for China, they are also important for the rest of us done in the context of these regional initiatives through APEC and also through the ASEAN+6 (ASEAN plus China, Japan, South Korea, Australia, New Zealand and India) process, the East Asia summit process," said Drysdale.

"That will make a very very important contribution by China with other countries to protection and development of an open global system."

Drysdale said APEC is the framework that these pathways can be sensibly realized. At the Belt and Road Forum for International Cooperation in Beijing in May, China had made clear that it was opening an invitation for others to find a pathway forward for the agenda for investing in connectivity and infrastructure. The Belt and Road Initiative and the Asian Infrastructure Investment Bank are all a part of it.

"We've come a long way in APEC since in 1989 the first APEC meeting was held in Canberra across the lake. We come a long way in many respects. First of all, China has become a member of APEC."

He said 30 years ago, many economies in the Asia Pacific region, China among them, were very closed economies. The vision of open regionalism and integration looked very remote at that time, but now it is a part of reality.

"It's changed the vision we need going forward. We do need to do more things to protect the system, not because we want any less liberalization or integration, building connectivity between the region's economies, but because especially the industrialized countries need to manage their distribution of the gains from openness better."

He pointed out that the core problem in the industrialized countries is that some people have been left behind as the distribution of the gains from international trade and commerce have not been equitably distributed across the communities, some people's income have grown very rapidly and some people's have not grown at all.

But in countries which manage the process better - Australia manages it better than most of the industrialized countries - people's income have increased right across the board, Drysdale said. So there are still commitments to openness.

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