APEC 2008: Foreign Minister Foxley announces P7

(David Azócar from Lima) Chile’s foreign minister, Alejandro Foxley, announced that negotiations will begin to include Peru, the United States and Australia in the P4 as of March 2009. The old P4, therefore, will now be known as the P7. Minister Foxley’s announcement came at APEC Peru’s 2008 Closing Ceremony of the 20th Summit of Ministers. The Chile Asia-Pacific portal therefore spoke with the minister and Carlos Furche, General Director of Chile’s DIRECON, regarding recent changes in the trans-Pacific partnership (TPP), formerly known as P4.

Chile, Singapore and New Zealand decided to establish a bloc in 2005 designed to strengthen the three nations’ economic synergy and cooperation.  Shortly thereafter, the small but wealthy state of Brunei Darussalam joined the TPP.  It has only taken three years for nations as diverse as Peru, Australia and the United States to show a deep interest in the bloc.

In response to questions regarding the choice of the new nations that will integrate into the TPP, Foreign Minister Foxley stated, “With this agreement we seek to fuse several FTAs and finally begin to create a large-scale free trade zone”, referring to the integration of three new members to the Transpacific Strategic Economic Partnership. The first round of negotiations will take place in March 2009. They will be held in Singapore, host country to APEC’s next summit.

The minister added, "We believe that, in future, APEC should be a very important player as regards offering positive responses to issues such as the world’s economy falling into recession. The nations that have the best economic performance are located in the Pacific. Therefore, we need to assure closer economic and political ties to the region, which can be converted into millions of new jobs. This agreement is a great step forward.”

For his part, Carlos Furche, who serves as Director General of International Economic Relations (DIRECON), emphasized the importance of the recent TPP expansion.  He feels the new members are evidence of a growing consensus which feels free trade is the best solution to the current financial crisis. "40% of Chile's exports ship to Asia. If we add US exports to this figure, almost two-thirds of Chilean exports ship to these markets. Therefore, I think this is particularly relevant to Chile in its role as an articulator of agreements on both sides of the Pacific.”

The director added, "The formation of large areas of economic zones facilitates investment. This is exactly what we expect from the P7. But we will only know how much coverage we have, on the issues of employability and new investments, when we begin to seriously negotiate the issue next year.”

The new strategic economic partnership promises to extend liberalization to a market of nearly 380 million inhabitants and a GDP of over nearly $15 billion.