Thursday, 30 May 2024 – In this hybrid seminar, Mr Carlos Kuriyama and Mr Emmanuel A. San Andres provided insights from recently concluded APEC meetings, including an analysis of the May 2024 issue of the APEC Regional Trend Analysis (ARTA). They also discussed key regional economic and trade-related trends.
SINGAPORE APEC STUDY CENTRE HYBRID SEMINAR
On 17-18 May 2024, the APEC Ministers Responsible for Trade convened in Arequipa, Peru, to deliberate on significant regional and global trade issues. Concurrently, on 17 May 2024, they held a joint meeting with the Ministers for Women to address the economic empowerment of women through trade in the Asia-Pacific region. During these discussions, the APEC Policy Support Unit (PSU) published the latest edition of ATRA. To further explore the topics of trade disengagement and geoeconomic fragmentation, the Singapore APEC Study Centre at the ISEAS – Yusof Ishak Institute organized a seminar featuring Mr Carlos Kuriyama, Director of the APEC Policy Support Unit, and Mr Emmanuel A. San Andres, Senior Analyst at PSU. The session was moderated by Dr Cassey Lee, Senior Fellow at ISEAS.
Mr Kuriyama began his presentation by outlining four key points from the ATRA report. First, APEC’s GDP growth surpassed global growth; second, near-term inflation is expected to moderate, although supply-side issues pose ongoing risks; third, persistent trade route disruptions and elevated freight costs remain; and fourth, gold demand has surged as a hedge against increasing global uncertainties. He then discussed both the upside opportunities and downside risks associated with GDP growth and economic outlook. Mr Kuriyama also noted that, despite currency depreciation trends, key interest rates across many APEC economies have remained steady even as inflation moderates. He highlighted the increase in trade-restrictive measures within APEC, with demand for goods subdued in both value and volume. However, he identified a bright spot in commercial service trade, particularly as tourism remains robust. Mr Kuriyama emphasized the importance of implementing a balanced mix of policies to navigate global uncertainties.
Mr San Andres began his presentation by showcasing a hypothetical analysis model predicting potential outcomes for APEC. This model was developed using a two-step econometric estimation, analyzing trade and price data for over 5,000 goods from 1995 to 2021. Two shocks were measured: first, a 10 per cent increase in prices of goods for economies impacted by trade-restrictive measures; and second, a 10 per cent decrease in prices of goods for economies benefitting from trade-facilitative measures. The results indicated a detrimental situation for most, except for inelastic essential goods in the former scenario, and widespread benefits in the latter. Concluding his presentation, Mr San Andres emphasised that economies need to rebuild trust among trading partners and strengthen institutions to enhance regional cooperation and economic integration.
Dr Lee initiated the Q&A session by inquiring about the impact of Foreign Direct Investment (FDI) flows on economic disparities among APEC economies. The speakers were also posed a range of other questions, including: whether the model suggests that governments will need to further increase debt levels; if policy shocks can differentiate between various types of trade restrictions and the duration of their impacts; the implications of a weakening APEC exchange rate against the USD; the effects of trade sanctions on trade blocs given their predominantly bilateral application; how APEC can reconcile the differing policies of its member economies; and their observations on the importance of bilateral Free Trade Agreements (FTAs).
