His Excellency Benigno S. Aquino III
President of the Philippines
During the APEC CEO Summit
[November 12, 2010, Yokohama, Japan]
The first persons I learned my ideology from, undoubtedly, were my parents. My father, he said the very first freedom that is essential is freedom from hunger. The attainment of wide and varied markets is obviously the fastest means in achieving freedom from hunger, and our administration’s goal is primarily the attainment of that first freedom.
Two decades after its founding, APEC has grown to twenty-one economies covering five continents and populated by close to half of the world’s population. Economic activity and growth in this part of the world has expanded rapidly beyond the expectations of its founding members.
Since 1994 when APEC leaders adopted the “Bogor Goals” of achieving free trade and investments and regional economic integration, member economies of APEC have reduced barriers to trade and investments, promoting the free flow of goods, services, and capital. Much has been accomplished since then. Today, nearly half of global trade takes place in the Asia-Pacific and 56% of the world’s GDP comes from here.
My own country, the Philippines, is a beneficiary from the more open environment for trade and investments. Economic growth is expected to exceed the initial 6.2% projection, and it will continue next year. Our stock market has been the best performing in Asia this year, and our recent local currency global bond offering, totaling the equivalent of 1 billion US dollars, was 13 times oversubscribed.
However, our story of resilience and growth is just one of many in the Asia-Pacific. All the economies have their own story to tell, but the common theme is that the free flow of trade and investments is the engine of economic growth and development.
Regional Economic Integration has always been the goal of APEC, with the “Bogor Goals” of free and open trade and investments for developed economies by 2010, and developing countries by 2020. Tremendous gains have been achieved in the past decade, but there is still much work ahead.
The fulfillment of a Free Trade Area of the Asia-Pacific (FTAAP) is now being seriously discussed.
But within and among APEC member countries, regional free trade groupings already exist, such as the ASEAN Free Trade Area or AFTA. AFTA was complemented by free-trade agreements between ASEAN and China, Japan, South Korea, and Australia and New Zealand. There now exists an ASEAN Plus Three, an ASEAN Plus Six, and even the Trans Pacific Partnership (TPP), which has attracted several APEC economies, including the Philippines.
We can view the different APEC economies as individual building blocks, which need to be assembled to create a single Free Trade Area of the Asia Pacific or FTAAP. But with the Free Trade Agreements already in place, such as ASEAN Plus Three, ASEAN Plus Six, and The TPP, we can see that some of these individual building blocks have already assembled into larger structures. Perhaps it would be more practical to add on to these groupings instead of assembling the individual building blocks from scratch. If we proceed in this manner, and add to what is already in place within APEC economies, there would be no need to start from scratch to build a FTAAP.
Of course challenges remain before we can see the full realization of these ideas. Different levels of economic development between APEC member countries, different political systems, cultures, languages, and interests means progress will take time. But if we build upon the gains in the past decade, then the vision of a free-trade area in the Asia Pacific can be achieved sooner rather than later.
Integration, however, will require internal adjustments, especially for developing economies. As economies open up, there will be winners and losers, at least in the short term. The risks and the downsides must be anticipated and managed. Capacities must be built. More importantly, economic integration should be used to narrow economic disparities among member economies and make growth sustainable and more inclusive.
In this aspect, APEC has shown its relevance and responsiveness to the social dimensions of globalization. Human resource development, economic and technical cooperation, and human security are key areas of cooperation in the region. The issues of food security and the threat of climate change are issues confronting not just APEC, but the world.
This is the challenge that we face in the Philippines as we commit to free trade. At the beginning of this year, we have reduced to zero 98 percent of tariff lines for ASEAN members and economies with which ASEAN has free trade agreements. But we have also put in place programs to make growth more inclusive by investing in education, health care, and a conditional cash transfer program for the poorest segments of our population. But we still need help building our capacities. The private sector needs to be more competitive, while the public sector’s ability to facilitate trade must be improved.
The private sector has an important role to play in all of this. As the potential winners in a wider economic integration, private enterprise can help nudge the process forward by helping identify and manage the risks, while at the same time reminding policymakers of the benefits of integration.
In closing, allow me to invite you to come and take a look and participate in what we are doing in the Philippines, to improve the business environment and make it a more reliable and profitable investment destination. We are open for business and we look forward to a mutually beneficial relationship with you.
Thank you, and good afternoon.