What Malaysia, New Zealand, Philippines, Singapore, Thailand, Canada, United

What is the Asia-Pacific Economic Cooperation
and why was it established?

The Asia-Paci?c Economic Cooperation, or APEC,
was established in 1989. It started as an informal ministerial level dialogue
group with 12 members comprising of Australia, Brunei Darussalam, Indonesia,
Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand,
Canada, and the United States. The APEC was initiated as an annual meeting of
foreign and trade ministers to sustain the momentum of market opening and economic
cooperation which are vital to the growth and prosperity of the Asia-Paci?c
region. The primary reason and purpose behind APEC’s establishment is the
desire to have a forum that caters to the enhancement of economic conditions of
states. This would entail the facilitation of economic growth, promotion of
cooperation among states, liberalization of trade, and creation of
opportunities for investments in the Asia-Paci?c community.

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Who are the members of APEC?

Currently, APEC consists of 21 member-economies
that have diverse economic capabilities. Member economies include both
developed and developing countries. The twenty-one (21) member economies are
Australia, Brunei Darussalam, Indonesia, Japan, South Korea, Malaysia, New
Zealand, Philippines, Singapore, Thailand, Canada, United States, Chinese
Taipei, People’s Republic of China, Hong Kong, Mexico, Papua New Guinea, Chile,
Peru, Russia, and Vietnam. Oftentimes, the members of APEC are referred to as
“economies”. The term “member economies” is used because APEC primarily
addresses issues concerning trade and economy. APEC members are considered to
be engaging with one another as economic entities.

 

What are the objectives of this group?

First of all, the objective of APEC is to sustain
the growth and development of the region for the common good its peoples and,
in this way, to contribute to the growth and development of the world economy.
Second, is to enhance the positive gains, both for the region and the world
economy, resulting from increasing economic interdependence, including by
encouraging the flow of goods, services, capital and technology. Third, to
develop and strengthen the open multilateral trading system in the interest of
Asia Pacific and all other economies. And lastly, to reduce barriers to trade
in goods and services and investment among participants in a manner consistent
with GATT principles, where applicable, and without detriment to other
economies.

 

 

What
is the issue reported in the article?

The
issue that reported in the article are to promote the achievements gained in
the APEC Year 2017, the President suggested enhancing cooperation in the fields
that Vietnam has proposed and adopted by APEC member economies, focusing on
inclusive economic, financial and social development, developing human
resources in the digital era, and strengthening food security in response to
climate change.

Added
to this are developing rural and urban areas, micro, small and medium-sized
enterprises, facilitating cross-border e-commerce and infrastructure
improvement, and developing the support industry and sustainable tourism.

 

Why
is the issue important for the group or for certain country?

Based
on the main title of the article it has says clearly that APEC 2017 wants to
create the new momentum for Vietnam’s deeper global integration. From the
article can be concluded that globalisation process is evolved here.
Globalization refers to the growing integration of trade and financial markets,
the spread of technological advancements, the receding geographical constraints
on social, cultural and migratory movements and the increased dissemination of
ideas and technologies. Economic globalization is a specific aspect of this
phenomenon that relates to the integration of production, distribution and the
consumption of goods and services in the world economy. Its expansion has
coincided with and been reinforced and driven by changes in societies across
the world and by political processes at the national, regional and global
levels.

On
the other hand, globalization results from the removal of barriers between
national economies to encourage the flow of goods, services, capital, and labour.  While the lowering or removal of tariffs and
quotas (see General Agreement on Trade and Tariffs, or GATT) that restrict free
and open trade among nations has helped globalize the world economy,
transportation and communication technologies have had the strongest impact on
accelerating the pace of globalization.

Thomas
L. Friedman describes the “flattening” of the world economy through
globalized trade, outsourcing, supply-chaining and political
liberalization.  The use of technologies
allows businesses, such as large multi-national corporations, to maintain
customers, suppliers and even competitors on a world-wide basis.  The breakdown of businesses into components
along its value-chain creates opportunities for multiple businesses located at
various spots on the globe to participate in the production of a single good or
service.  This global network, even for a
single enterprise, is part of globalization.

 

Several
organizations have either been created or have evolved into key roles in the
process of globalization.  The World Bank
and the International Monetary Fund, for instance, deal primarily with issues
of free trade in developing economies and with international monetary policy,
including debt and trade balances between developing and industrialized
countries.  The World Trade Organization,
along with the General Agreement on Trade and Tariffs (GATT), has been involved
with removing trade barriers and reducing the cost of trading.

Besides
that, globalization also has influenced global growth and sustainable
development. Driven by the mobility of goods, services, capital, labour and
technology, it has unleashed a wide array of opportunities, as well as new
challenges for realizing sustainable development. Globalization has brought a
large array of new opportunities and benefits. For example, information and
communications technologies (ICTs) have enabled the acceleration of the global
integration of production processes.

Although
globalisation is probably helping to create more wealth in developing countries
– it is not helping to close the gap between the world’s poorest countries and
the world’s richest. On the other hand, globalization is also often blamed for
the loss of employment in developed nations, as corporations ship manufacturing
facilities and jobs overseas in order to save costs; critics say it weakens
national sovereignty as well.

 

History
of globalisation

“Globalisation”
has become the buzzword of the last two decades. The sudden increase in the
exchange of knowledge, trade and capital around the world, driven by
technological innovation, from the internet to shipping containers, thrust the
term into the limelight.

Some
see globalisation as a good thing. According to Amartya Sen, a Nobel-Prize
winning economist, globalisation “has enriched the world scientifically and
culturally, and benefited many people economically as well”. The United Nations
has even predicted that the forces of globalisation may have the power to
eradicate poverty in the 21st century.

Others
disagree. Globalisation has been attacked by critics of free market economics,
like the economists Joseph Stiglitz and Ha-Joon Chang, for perpetuating
inequality in the world rather than reducing it. Some agree that they may have
a point. The International Monetary Fund admitted in 2007 that inequality
levels may have been increased by the introduction of new technology and the
investment of foreign capital in developing countries. Others, in developed
nations, distrust globalisation as well. They fear that it often allows
employers to move jobs away to cheaper places. In France, “globalisation” and “délocalisation”
have become derogatory terms for free market policies. An April 2012 survey by
IFOP, a pollster, found that only 22% of French people thought globalisation a
“good thing” for their country.

However,
economic historians reckon the question of whether the benefits of
globalisation outweigh the downsides is more complicated than this. For them,
the answer depends on when you say the process of globalisation started. But
why does it matter whether globalisation started 20, 200, or even 2,000 years
ago? Their answer is that it is impossible to say how much of a “good thing” a
process is in history without first defining for how long it has been going on.

Early
economists would certainly have been familiar with the general concept that
markets and people around the world were becoming more integrated over time.
Although Adam Smith himself never used the word, globalisation is a key theme
in the Wealth of Nations. His description of economic development has as its
underlying principle the integration of markets over time. As the division of
labour enables output to expand, the search for specialisation expands trade,
and gradually, brings communities from disparate parts of the world together.
The trend is nearly as old as civilisation. Primitive divisions of labour,
between “hunters” and “shepherds”, grew as villages and trading networks
expanded to include wider specialisations. Eventually armourers to craft bows
and arrows, carpenters to build houses, and seamstress to make clothing all
appeared as specialist artisans, trading their wares for food produced by the
hunters and shepherds. As villages, towns, countries and continents started
trading goods that they were efficient at making for ones they were not,
markets became more integrated, as specialisation and trade increased. This
process that Smith describes starts to sound rather like “globalisation”, even
if it was more limited in geographical area than what most people think of the
term today.

Smith
had a particular example in mind when he talked about market integration
between continents: Europe and America. The discovery of Native Americans by
European traders enabled a new division of labour between the two continents.
He mentions as an example, that the native Americans, who specialised in
hunting, traded animal skins for “blankets, fire-arms, and brandy” made
thousands of miles away in the old world.

Some
modern economic historians dispute Smith’s argument that the discovery of the
Americas, by Christopher Columbus in 1492, accelerated the process of
globalisation. Kevin O’Rourke and Jeffrey Williamson argued in a 2002 paper
that globalisation only really began in the nineteenth century when a sudden
drop in transport costs allowed the prices of commodities in Europe and Asia to
converge. Columbus’ discovery of America and Vasco Da Gama’s discovery of the
route to Asia around the Cape of Good Hope had very little impact on commodity
prices, they argue.

But
there is one important market that Messrs O’Rourke and Williamson ignore in
their analysis: that for silver. As European currencies were generally based on
the value of silver, any change in its value would have had big effects on the
European price level. Smith himself argued this was one of the greatest
economic changes that resulted from the discovery of the Americas:

 

The
discovery of the abundant mines of America, reduced, in the sixteenth century,
the value of gold and silver in Europe to about a third of what it had been
before. As it cost less labour to bring those metals from the mine to the
market, so, when they were brought thither, they could purchase or command less
labour; and this revolution in their value, though perhaps the greatest, is by
no means the only one of which history gives some account.

The
influx of about 150,000 tonnes of silver from Mexico and Bolivia by the Spanish
and Portuguese Empires after 1500 reversed the downwards price trends of the
medieval period. Instead, prices rose dramatically in Europe by a factor of six
or seven times over the next 150 years as more silver chased the same amount of
goods in Europe (see chart).

The
impact of what historians have called the resulting “price revolution”
dramatically changed the face of Europe. Historians attribute everything from
the dominance of the Spanish Empire in Europe to the sudden increase in witch
hunts around the sixteenth century to the destabilising effects of inflation on
European society. And if it were not for the sudden increase of silver imports
from Europe to China and India during this period, European inflation would
have been much worse than it was. Price rises only stopped in about 1650 when
the price of silver coinage in Europe fell to such a low level that it was no
longer profitable to import it from the Americas.

The
rapid convergence of the silver market in early modern period is only one
example of “globalisation”, some historians argue. The German historical
economist, Andre Gunder Frank, has argued that the start of globalisation can
be traced back to the growth of trade and market integration between the Sumer
and Indus civilisations of the third millennium BC. Trade links between China
and Europe first grew during the Hellenistic Age, with further increases in
global market convergence occuring when transport costs dropped in the
sixteenth century and more rapidly in the modern era of globalisation, which
Mssrs O’Rourke and Williamson describe as after 1750. Global historians such as
Tony Hopkins and Christopher Bayly have also stressed the importance of the
exchange of not only trade but also ideas and knowledge during periods of
pre-modern globalisation.

Globalisation
has not always been a one-way process. There is evidence that there was also
market disintegration (or deglobalisation) in periods as varied as the Dark
Ages, the seventeenth century, and the interwar period in the twentieth. And
there is some evidence that globalisation has retreated in the current crisis
since 2007. But it is clear that globalisation is not simply a process that
started in the last two decades or even the last two centuries. It has a
history that stretches thousands of years, starting with Smith’s primitive
hunter-gatherers trading with the next village, and eventually developing into
the globally interconnected societies of today. Whether you think globalisation
is a “good thing” or not, it appears to be an essential element of the economic
history of mankind. Sources:
https://www.economist.com/blogs/freeexchange/2013/09/economic-history-1

 

Reasons
for globalisation

There
are several key factors which have influenced the process of globalisation:

1.      Improvements
in transportation – larger cargo ships mean that the cost of transporting goods
between countries has decreased. Economies of scale mean the cost per item can
reduce when operating on a larger scale. Transport improvements also mean that
goods and people can travel more quickly.

2.      Freedom
of trade – organisations like the World Trade Organisation (WTO) promote free
trade between countries, which help to remove barriers between countries.

3.      Improvements
of communications – the internet and mobile technology has allowed greater
communication between people in different countries.

4.      Labour
availability and skills – countries such as India have lower labour costs
(about a third of that of the UK) and also high skill levels. Labour intensive
industries such as clothing can take advantage of cheaper labour costs and reduced
legal restrictions in LEDCs.

 

Another
why it matters?

Globalization
is the key to growing businesses in the 21st Century. At the same time,
globalization has led economic decision-making away from local control.  As a result, decisions about a company’s
plans, including expansions, relocations, or closings are increasingly made
independently of the considerations of local markets or local managers.

 

Positive
impacts of globalisation

Globalisation
is having a dramatic effect – for good or ill – on world economies and on
people’s lives.

Some
of the positive impacts are:

Ø  Inward
investment by TNCs helps countries by providing new jobs and skills for local
people.

Ø  TNCs
bring wealth and foreign currency to local economies when they buy local
resources, products and services. The extra money created by this investment
can be spent on education, health and infrastructure.

Ø  The
sharing of ideas, experiences and lifestyles of people and cultures. People can
experience foods and other products not previously available in their
countries.c

Ø  Globalisation
increases awareness of events in far-away parts of the world. For example, the
UK was quickly made aware of the 2004 tsunami tidal wave and sent help rapidly
in response.

Ø  Globalisation
may help to make people more aware of global issues such as deforestation and
global warming – and alert them to the need for sustainable development.

 

Negative
impacts of globalisation

Critics
include groups such as environmentalists, anti-poverty campaigners and trade
unionists.

Some
of the negative impacts include:

Ø  Globalisation
operates mostly in the interests of the richest countries, which continue to
dominate world trade at the expense of developing countries. The role of LEDCs
in the world market is mostly to provide the North and West with cheap labour
and raw materials.

Ø  There
are no guarantees that the wealth from inward investment will benefit the local
community. Often, profits are sent back to the MEDC where the TNC is based.
Transnational companies, with their massive economies of scale, may drive local
companies out of business. If it becomes cheaper to operate in another country,
the TNC might close down the factory and make local people redundant.

Ø  An
absence of strictly enforced international laws means that TNCs may operate in
LEDCs in a way that would not be allowed in an MEDC. They may pollute the
environment, run risks with safety or impose poor working conditions and low
wages on local workers.

Ø  Globalisation
is viewed by many as a threat to the world’s cultural diversity. It is feared
it might drown out local economies, traditions and languages and simply re-cast
the whole world in the mould of the capitalist North and West. An example of
this is that a Hollywood film is far more likely to be successful worldwide than
one made in India or China, which also have thriving film industries.

Ø  Industry
may begin to thrive in LEDCs at the expense of jobs in manufacturing in the UK
and other MEDCs, especially in textiles.

Anti-globalisation
campaigners sometimes try to draw people’s attention to these points by
demonstrating against the World Trade Organisation. The World Trade
Organisation is an inter-government organisation that promotes the free flow of
trade around the world.

 

Support
and criticism

Financial
liberals usually argue that better tiers of political and financial freedom
inside the form of unfastened change within the advanced world are leads to
themselves, producing better stages of usual cloth wealth. Globalization is
seen because the useful unfold of liberty and capitalism. Jagdish Bhagwati, a
former adviser to the U.N. On globalization, holds that, even though there are
obvious troubles with overly rapid development, globalization is a complete
high-quality force that lifts international locations out of poverty with the
aid of causing a virtuous economic cycle related to faster economic growth.
Economist Paul Krugman is the staunch supporter of globalization and loses
trade with a file of disagreeing with many critics of globalization. He argues
that lots of them lack a basic know-how of comparative benefit and its
significance in the modern-day world.

Conclusion

The
best challenges to the well-being of human beings and the planet are global in
nature and consequently require global answers, which need to be embedded in a
framework of effective and applicable worldwide establishments. Globalization
can permit inclusive increase and poverty discount and contribute to the
achievement of sustainable improvement. However, important challenges continue
to be when it comes to the 3 megatrends of shifts in production and labour
markets, speedy advances in era and climate exchange. Next, sustainable
improvement and peace and protection are inextricably related. To foster peace,
globalization desires to be equitable and sustainable, making sure that no
person is left at the back of. At the same time, non-violent societies
constitute a precondition for the economic increase and human well-being.
Moreover, there may be a need for inclusive, obvious and powerful multilateral
methods to manage globalization and its demanding situations. International
institutional and normative frameworks also are important to ensure that
globalization is of gain to all nations and go away no person at the back of.
The United international locations and different worldwide institutions have a
robust role to play in setting the norms and “policies of the sport” to ensure
that globalization works for all. The 2030 timetable, the Addis Ababa motion
schedule and the Paris agreement on climate exchange represent a normative road
map to deal with some of the challenges associated with globalization. As the
demanding situations and context for globalization are particular to each United
States, differentiated strategies based on countrywide contexts are required.
Beyond international and nearby coverage frameworks, USA-degree policies which
might be based on robust national establishments and governance systems play a
necessary role. The United international locations can support the Member
States in devising U. S. A .-particular policy processes to globalization.

References

https://www.economist.com/blogs/freeexchange/2013/09/economic-history-1

http://www.economist.com/node/748671

https://www.wto.org/english/news_e/pres97_e/ecosoc.htm

https://www.wto.org/english/news_e/pres95_e/pr025_e.htm