Recently Problematic Apec Trade example essay topic

The program of alignment of the national product standards with the international standards is aimed to reduce the recently problematic APEC trade flows. At present, a lot of work is done under the adoption of Mutual recognition Arrangements (MR As), intended to ease the recognition of different certification systems and products produced by different economies by their trading partners. The most growing sector in the world economy is considered to be the services sector. The value of Australia's services trade has grown by 11 per cent per year for the last five years.

In 1996/97 it was valued at $24.3 billion. Consequently, Australia has much to gain from the APEC work program aimed at facilitation of trade in services. Of particular interest to Australia is the work intended to facilitate improved trade in professional services and the development of standardized principles and guidelines for APEC trade in services. In addition to the mentioned above, Australia is deeply interested in the protection of the intellectual property rights. It gained vital importance recently in such fields of economy as pharmaceuticals, film and music industries, computer software, and other goods covered by patents and various trade marks.

The third important plus in the APEC program is Economic and Technical Cooperation, now widely known as eco tech. As well as the others, the program has at its goals reduction of the costs and the improved efficient resource allocation. Eco tech covers for the most the following industries: energy, telecommunications, transport, infrastructure, human resources development, fisheries, tourism, industrial science and technology, trade and investment data and assistance to small and medium enterprises. The Minister of Trade summarized the goals of eco tech as follows, ... to achieve sustainable growth and equitable development in the Asia-Pacific region, and to assist developing economy members to participate fully in APECs trade liberalization agenda.

APECs eco tech and trade and investment liberalization and facilitation... agendas are thus complementary and supportive. Many eco tech activities, such as those designed to improve regional infrastructure in energy, transport and telecommunications are of direct relevance to business. As a rule, any economic step involves certain sacrifices. Membership in APEC will definitely bring some disadvantages to Australia as economic entity. Summarized, the detrimental effects of APEC on Australia have all chances to be the following: effects on employment, control of foreign investment, environmental issues, and technical standards.

There are seriously-grounded fears that if Australia reduces its tariffs and non-tariff trade barriers, it has real chances of losing other significant sectors of industry. Low wage levels in the developing economies of APEC members lure off the investors and move their manufacturing operations offshore. This will affect any industry involving large number of labor force. Having high level of unemployment at the moment, there is a considerable support by public that the tariffs reduction will cause the export of Australian jobs abroad. What is important to consider hear is the human and social cost of economic change. They can be difficult or impossible to quantify, but they bear an emotional effect that is usually easily taken up by media.

The control of foreign investment is another area of deep concern for opponents of the APEC integration process. If the country is closely integrated, it leads to the relaxation of foreign investment laws, which results in the weakening control over the plans of foreign investments. It is evident, that under such conditions, when the investor is not satisfied with the investment terms, nothing will stop him from moving his investments elsewhere. Rapid economic growth in Asia-Pacific region cannot leave harmless the environment. The major issues of concern being stressed recently are the depletion of forests, degradation of water supplies and growing pollution of the atmosphere. There is a substantial body of opinion that free trade is initially detrimental to the environment, mostly because it produces economic growth, which, in turn, produces higher consumption level, which in its turn increases pollution and faster depletion of the natural resources.

The consequences of this can be dramatic: because without the proper standards of environmental protection industries producing high levels of pollution will gain a comparative advantage by moving to a location where there are lower standards (and hence lower costs). The result of this would be faster degradation of the environment in the host economies and a rapid widening of the gap between the poorer and richer economies. One of the main effects of tariff liberalization is to bring non-tariff barriers to the forefront of international discussions. In relation to standards, the concerns in Australia arise on two levels. Firstly, there is the concern that adoption of generic standards for all APEC members will result in the adoption of the lowest common denominator as the standard for all. For a country such as Australia which adheres to strict internationally accepted standards in many fields, there is a natural reluctance to see lower standards adopted.

Secondly, there is dissatisfaction at the likely costs of adopting particular standards which may differ from the current Australian standard. There is no doubt that integration of Asia Pacific region and further developments of APEC are very promising for Australia in terms of economic growth. However, the promises will remain in the void without the work being done to implement them. All the legitimate concerns about the progress of APEC must be thoroughly recognized and discussed. Probably it is much better to consider all the pros and cons rather than ignore the difficulties.