Since the early 1990s, international trade growth has persistently eclipsed foreign investment growth in the Asia-Pacific. Over this time Asia-Pacific trade in goods and services expanded on average at 7.1% per annum nearly twice as fast as GDP growth at 3.7%. This trade growth has reflected APEC’s priority in liberalising international trade over foreign investment.
However, in the past decade international trade growth in the region has slowed, corresponding more closely with GDP growth. This presents an opportunity for foreign investment in APEC to make up for the trade slowdown and play at least as important a role in economic development. Greater cross border investment within APEC and between APEC and the rest of the world can and should play a greater role in regional economic development.