2017/SOM1/IEG/005 Agenda Item: 6.1 Collective Strategic Study on Issues Related to the Realization of the Free Trade Area of the Asia- Pacific: Investment-Related Issues Purpose: Information Submitted by: Policy Support Unit, APEC Secretariat First Investment Experts Group Meeting Nha Trang, Viet Nam 23-24 February 2017
Collective Strategic Study on Issues Related to the Realization of the FTAAP: Investment-Related Issues 23-24 February 2017 APEC Investment Experts Group Nha Trang, Viet Nam Presented by: Carlos Kuriyama, Senior Analyst, APEC Secretariat, Policy Support Unit Copyright 2016 APEC Secretariat Objective of the FTAAP Study To present views on how APEC economies can best participate in and contribute to the eventual realization of the FTAAP The study does not constitute a commitment by APEC members to engage in negotiations, nor does it prejudice the scope or content of eventual negotiations 1
Structure of the FTAAP Study 1. Overview Report is available at: 2. Review of the APEC Region s Economy http://www.apec.org/~/med 3. Next Generation Trade and Investment Issues ia/files/groups/cti/2016/ap pendix%2006%20-4. Measures Affecting Trade and Investment %20FTAAP%20Study.pdf 5. Stocktake of Existing RTA/FTAs in the Asia-Pacific 6. Stocktake of APEC Initiatives and Outcomes Relevant to an FTAAP 7. Update of Other Analytical Work 8. Ongoing Regional Undertakings 9. Opportunities and Challenges The Study shows: - The robust nature of APEC s work to advance regional economic integration and promote high-quality FTAs - FTAAP could bring great opportunities to the Asia-Pacific region and positive externalities to the rest of the world Growing FDI Trends in APEC FDI Inflows FDI Outflows Source: UNCTAD. Extracted from APEC FTAAP Study Source: UNCTAD. Extracted from APEC FTAAP Study Upward trend for FDI flows, but volatility after the Global Financial Crisis (GFC). More volatility outside East Asia. By 2014, FDI flows were still below levels pre-gfc 2
Importance of Foreign Investment for APEC Region Contributed to the development of infrastructure Accelerated transfer of technology Boosted trading networks through investment in foreign affiliate companies Improved information flows between exporters and importers Encouraged specialization and shaped comparative advantages Lowered trade costs Enabled economies to move faster up the value chain ladder Positive correlation between trade and FDI in APEC. Contribution to jobs Key Policy Challenges on Investment Building momentum behind domestic economic reforms. Productivity-raising, competitive-enhancing micro-economic reforms are essential Open investment regimes need to be linked to growth, jobs and higher living standards Measures affecting investment remain. Building the habits of reform-oriented collaboration among APEC members to advance the agenda on investment liberalization 3
FTAAP Study s Recommendations on Investment-related Work Programs in APEC The recommendations are not prescriptive Emphasizes the need to assist APEC economies in identifying areas of convergence in investment practice and exchange experiences on the negotiation and implementation of IIAs Instructs officials to work on measures affecting trade and investment as identified in the Study that support the achievement of the Bogor Goals of free and open trade and investment Perceptions about restrictions facing foreign investors have increased in recent years The perception on the prevalence of foreign ownership has declined in APEC, particularly in APECdeveloping economies Source: World Economic Forum The perception that business rules are discouraging FDI has intensified in recent years. This is more prevalent within APECindustrialized economies. Source: World Economic Forum 4
but governments have been working to improve the investment climate FDI Restrictiveness Index: 0=no restrictions, 1=full restrictions. Fewer restrictions in manufacturing than in primary and services sectors Source: OECD. APEC PSU calculations. Information is available for only 8 APEC-Developing economies. Looking at statutory regulations, the restrictiveness in APEC-industrialized and selected APEC-developing economies has fallen between 1997 and 2014 Thank you APEC PSU Website: http://www.apec.org/apec/about_apec/psu.html Policy Support Unit APEC Secretariat 35 Heng Mui Keng Terrace Singapore 119616 Telephone: (65) 6891 9600 Fax: (65) 6891 9419 Email: psugroup@apec.org Copyright 2013 APEC Secretariat 5