APEC Regional Integration
Asia-Pacific Economic Cooperation (APEC) is the premier opportunity for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region. APEC promotes global business and there are several advantages and disadvantages of this regional integration. APEC was established in 1989 at the suggestion of Australia, to further enhance economic growth, prosperity and strength for the Pacific Rim area. APEC consists of twenty-one countries. Decisions made within APEC are reached by consensus and commitments that are undertaken on a voluntary basis. APEC has no treaty obligations required of its participants and it represents the most economically dynamic region in the world having produced nearly seventy percent of the global economic growth in its first ten years (APEC, 2006). APEC works in large areas of trade and investments to help the member economies grow and prosper.
The goal of regional integration is to encourage the reduction of barriers to trade that prevent the free flow of goods, services, and production factors between countries. Reducing trade barriers requires agreements between trading nations. In theory, several levels of economic integration can help to achieve these goals – free trade areas, customs unions, common markets, economic unions, and political unions (OECD, 2006).
In free trade areas, any barriers to free trade that restrict trade such as tariffs, quotas, or subsidies do no exist. However, member nations are free to establish trade polices with non-member nations. In a customs union, barriers to free trade do not exist between member nations while the union establishes a common external policy for trade with non-member nations. Common markets do not have any barriers to trade, have a commo ...