Advocated by Australia, APEC was established in its first Ministerial meeting in Canberra, Australia 1989.
"Asia-Pacific Economic Cooperation (APEC) was established in 1989 in response to the growing interdependence among Asia-Pacific economies. It began as an informal dialogue group, APEC has since become the primary regional vehicle for promoting open trade and practical economic cooperation. Its goal is to advance Asia-Pacific economy and provide a sense of community. Today, APEC's 21 member economies had a combined gross domestic product of over $18 trillion and 44 % of the global trade."
- Economic growth
Financial Liberalisation refers to reduction of any sort of regulations on the financial industry of a given country.
Multilateralism is a diplomatic term that refers to cooperation among several nations.
Together with Taiwan and Hong Kong, China became an APEC member in 1991.
The Chinese economy is one with very regulated liberalisation, the government controls and restricts ability of anyone to invest in China, except for Direct Investment which is physical investments, and not financial. If a much regulated system like the Chinese financial system reduces some of its restrictions, the system is going through liberalisation.
Financial Liberalisation means lessening restrictions on various types of instruments of lending institutions. Such instruments can be traded. Examples of institutions are banks, countries treasury, money market funds, hedge funds, investment banks. Whenever we lift any restriction we are liberalising.
The U.S on the other hand has an extremely liberal system which they have liberalised over the last 3 decades. Many people seem to believe that the current crisis is a result on to much liberalisation, since it allowed the creation of risky financial loans, and the failings of rating of several financial institutions which created many of the problems that have caused the recession.
Industry policy in Australia has been subject to a major transformation over the last 30 years. Barrier protection to manufacturing industries, mainly via tariffs, has been reduced from 35% to 5% in 2000-01, thus moving Australia a long way towards the Asia-Pacific Economic Cooperation (APEC) goal of free trade access to developed countries by 2010.
The Tariff Board was established in 1921 under the Tariff Board Act 1921-1966. Its main responsibility was to advise the Government on questions of assistance to Australian industries. In particular, it was charged with reporting on 'the necessity for new, increased, or reduced duties' and on 'the necessity for granting money for the encouragement of any primary or secondary industry in Australia'. An example would be the bailing out funds provided to the car industry.
It is important that policy makers pay more attention to the alternative tools for achieving industry policy objectives, namely non-tariff barriers, anti-dumping measures and assistance through the Budget, sometimes referred to as State aid or Public support for Industry. Compared with other Western countries, Australia is an almost negligible user of non-tariff barriers.
“A company is anti-dumping if it is importing a product from overseas at prices lower than the normal value of production the item can be made in the domestic prices of the product or the cost of production on its own domestic market.” Example I would buy a car for half the retail price overseas that it would cost for and Australian company to product one.
There is an important distinction between the assistance provided to specific industries and the general assistance measures to support research & development, innovation and exports.
There is an alarming trend of long established manufacturing companies and retailers filing for bankruptcy in 2010 and we should all start asking the question. Are we heading in the right direction?
I don’t claim to be an Economics expert, I am just voicing some concerns that Australia is loosing too much of its manufacturing infrastructure and we should be focusing more on the domestic market before attending to the global market demands.