Differing interests of members may come in the way of clinching deals

China's push for the initiative to establish a free trade zone in the Asia-Pacific region during the Asia-Pacific Economic Cooperation meeting highlighted Beijing's desire to use a regional trade agreement to fully exploit the region's economic power, experts said.

While trade officials have said that the proposal does not target any existing multilateral negotiations, the move can be seen as China's response to the rise of a series of bilateral free trade agreements and super-scale regional economic frameworks such as the United States-led Trans-Pacific Partnership Agreement, given that the Doha Round has achieved little progress in recent years, analysts said.

"It is a necessary effort as countries are now exploring different ways to spur growth in trade and investment. It is China's response to existing regional trade agreements," said Lu Yan, a researcher at the China Academy of International Trade and Economic Cooperation.

"While it is uncertain whether these different and competing trade blocs will eventually lead to the same goal, the ultimate purpose is to create an open, inclusive and transparent trade and investment environment in the region," Lu said.

The different development levels and national conditions of the APEC members will also make it a daunting task to achieve an overarching FTA in the region, analysts said.

"The political desire of each member state is crucial, otherwise pushing forward FTA negotiations in the region can be very difficult," Lu said.

Carlos Gutierrez, former US secretary of commerce, warned that national interests in some strategically important industries can stand in the way of reaching agreements.

"Every country has a very special industry (to protect). That special industry usually gets in the way of the agreements When you get into that detail, agreements break down," he said.

The APEC members represent 40 percent of the world's population, 44 percent of international trade and more than half of the global GDP.

If realized, the Asia-Pacific FTA would cover the world's largest free trade area.

But Gutierrez said the bigger the proposed trade bloc, the more difficult for member states to fully establish an agreement.

"It is important that we are not creating competing trading blocs. Unless we are careful, that can happen," he added.

The proposal to establish an Asia-Pacific free trade area was first raised in 2006 at the APEC meeting in Hanoi, Vietnam. The initiative has been discussed in every APEC forum since then but no major breakthrough has been achieved.

Premier Li Keqiang proposed in April at the Boao Forum for Asia that countries should consider studying the feasibility of establishing the FTAAP as soon as possible.

While a complete and imminent agreement is highly unlikely, there is the possibility of a more pragmatic and less ambitious trade agreement being reached at the APEC meeting in Beijing, analysts said.

Contact the writers at lixiang@chinadaily.com.cn and gaoyuan@chinadaily.com.cn