PM Lee: Apec needs service integration
REGIONAL economies should be integrated further by liberalising the services industry, Prime Minister Lee Hsien Loong said in Manila yesterday morning at a session of the Asia-Pacific Economic Cooperation (Apec) Leaders' meeting.
Acknowledging that full liberalisation will not be easy and will require "stepping stones and pathways", he suggested that the Apec economies focus on sectors that will smoothen the flow of trade such as telecommunications and logistics.
For instance, improving supply chains through speedier air transport will benefit businesses that deal with perishable goods.
Liberalising modern services that can be done digitally - such as financial, insurance, legal and accounting services - will also enable businesses to more easily operate.
But Mr Lee added that this did not mean a total removal of domestic regulation. The setting of rules according to each nation's own priorities was still needed.
"We are talking about efficiency, transparency and consistency in implementing regulations, and not allowing regulations to become a non-transparent opaque way of cooperation," he said.
He also commended the host country, the Philippines, for developing the Apec Services Cooperation Framework, which will eventually establish a roadmap for comprehensive services liberalisation in the future.
Also making a push for services integration at the session were United States President Barack Obama and South Korean President Park Geun Hye.
Similarly, in an interview with The Straits Times before the summit, Apec secretariat executive director Alan Bollard pointed out that proponents of free trade have traditionally concentrated on merchandise and manufacturing.
"In those areas we lead the world in terms of integration but in services we don't," he said, pointing to Europe as a good example of service liberalisation.
Services now account for more than half of Apec's gross domestic product and jobs in the region.
On the topic of trade agreements, Mr Lee noted that it was a "milestone year for regional economic integration".
Among the achievements this year were the conclusion of the wide-ranging Trans-Pacific Partnership (TPP) and the Australia-Japan Free Trade Agreement entering into force.
Asean leaders will also make announcements on the Asean Economic Community, which will boost economic cooperation in South-east Asia, during their summit in Kuala Lumpur over the next few days.
"I hope we can keep up the momentum, because they are pathways to realising an eventual Free Trade Area of the Asia-Pacific (FTAAP), which will give Apec substance, purpose and also benefit our countries," he said.
Mr Lee also expressed hope that an ongoing study on the FTAAP will point the way towards the Apec goal and spell out the economic goals.
Dr Bollard told The Straits Times last week that an interim report will be presented at this summit while the full version will be available at next year's meeting in Peru.
In his remarks, Mr Lee said there were multiple routes to realising the FTAAP. This included the Regional Comprehensive Economic Partnership, which has not "fully fulfilled its potential".
This 16-nation agreement involves all 10 Asean members and China, Japan, South Korea, India, Australia and New Zealand.
"We should double our efforts to level the RCEP up to other pathways like the TPP, both in pace and in substance, so that we can achieve truly regional economic integration," he said.