Washington, Feb 20: Noting that India offers a source of huge long-term economic gain with sustained free-market reforms, a US think tank has pressed US to back India’s membership of the Asia-Pacific Economic Cooperation (APEC) forum.
Formed in 1989, APEC is a forum for 21 Pacific Rim countries that seeks to promote free trade and economic cooperation throughout the Asia-Pacific region with the primary goal of supporting sustainable economic growth and prosperity.
“It has been a bad half-decade for American foreign economic policy,” Walter Lohman and Derek Scissors, director and senior research fellow, respectively, in Asia Economic Policy in the Asian Studies Centre at the Heritage Foundation wrote listing various failed US trade agreements.
“In such an environment, the US should worry a little less about short-term trade policy problems – there are plenty of those already – and more about long-term gains,” they wrote.
“With sustained free-market reforms, India offers a source of huge long-term economic gain,” Lohman and Scissors wrote suggesting “one step in a corresponding long-term approach to maximise this gain would be to invite India into the APEC forum”.
“India’s accession to APEC would have little short-term impact,” they wrote noting APEC, which offers broadest rhetorical support for open trade, has never required binding commitments from its members.
But “the stakes are higher in the long term”, Lohman and Scissors wrote suggesting “without the pressure for formal, negotiated market liberalisation at APEC, India is likely to be more cooperative there than within the WTO or bilaterally”.
“Over time, APEC’s information-sharing function will improve the quality of Indian participation in all economic dialogues and provide a baseline for free-market reforms,” they wrote.
“The upside potential is considerably larger than the downside risk,” Lohman and Scissors wrote noting “improving India’s participation in the international economy offers huge potential gains”.
US sponsorship of APEC membership for India could also further improve bilateral security relations, they wrote suggesting the US should advocate full membership for India by, at the latest, 2017.
“On balance, the geopolitical value to the US is significant, and the potential economic reward from a more open and, engaged India is worth the minimal risk to APEC,” the two scholars concluded.
(Arun Kumar can be contacted at firstname.lastname@example.org)