REPUBLIKA.CO.ID, JAKARTA -- Executive Director of APEC Secretariat, Alan Bollard said that a Free Trade Area of the Asia-Pacific that included all APEC economies was a beacon on the horizon but it could be time to better define this policy. With less than two weeks before APEC Trade Ministers meet in Qingdao, China, the APEC Business Advisory Council (ABAC) gathered in Santiago, Chile to agree on a set of recommendations to help keep the economy on track.

During the plenary, ABAC members heard an analysis of the regional economic outlook, how APEC could help the World Trade Organization to reduce trade barriers and to identify pathways to a Free Trade Area of the Asia-Pacific to improve market access and export growth. The need for greater economic reform was a further point of emphasis.

ABAC members agreed with the APEC Policy Support Unit’s regional economic trends analysis and recognized that even though APEC economies are forecast to grow in 2014, there was a cause for some concern.

“Medium-term GDP forecasts for APEC economies have actually been revised down from 5 percent to between 4-4.5 percent over the next five years. The consequence of that downward revision in growth would actually translate into a 4 trillion USD deficit in economic outlook for APEC economies over the medium-term,” explained John Denton who chairs ABAC’s Finance and Economics Working Group.

It is an alarming figure in its own right and one that reinforces the need for policy reforms to promote greater regional integration and connectivity to improve economic growth and development which are the priorities for the APEC Business Advisory Council. For example, Chile has experienced a slowdown in the growth of its economy since last year. To address this issue, the government has deepened the liberalization of free trade and commerce, pursued economic reforms and investments in education.

ABAC member in Chile, Rafael Guilisasti said that the new cycle was driven by a slowdown in the prices of some raw materials, heavy investment in human capital and supporting the development of new industries. Investments in education bring a lot of opportunity for economy, particularly exchanges between universities to narrow the gap in preparing human resources.

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