Analysts Cite "Strong Growth Potential" of United States' Economy in Review of Progress Toward APEC Goals

An independent review of United States' progress in meeting APEC's goals for free and open trade and investment has acknowledged the economy's strong growth potential, in spite of a substantial deficit in its current account.

The "Study Report on the United States' 2007 Inpidual Action Plan (IAP)" to achieve its commitment to APEC goals was prepared by analysts from Singapore and Japan.

The report considered a number of areas comprising American efforts to reach APEC Bogor Goals, which set a target of free and open trade by 2010 for industrialized economies and 2020 for developing economies.

While recent negative effects of the sub-prime mortgage market suggest that US economic growth should be moderate in 2008, analysts believe this will not affect the "economic expansion of the U.S. economy in the medium-term."

Overall, US trade has increased in recent years and has contributed significantly to its economic growth. Due to its open trade policy, the US economy enjoys healthy foreign investment activity: "The Unites States is also the largest host to foreign investment in the world."

It is also a major investor in the global economy. In 2006, for example, US outflows of foreign direct investment to Europe and Asia Pacific were twice as high as they were just six years earlier.

Out of the total of nine bilateral and regional trade agreements in action in 2007, most of the agreements entered into force in the mid-2000s. Explains the report, "The positive complementary effects of FTA on the exports of United States is clearly indicated in the increasing trend of exports to FTA completed countries."

The United States has made steady progress in trade liberalization to achieve the Bogor Goals. "In fact, the United States maintains very low tariff and non-tariff barriers," say analysts. "The US regime in trade in services is one of the most open regimes in the world."

The full report will be available online after the Senior Officials' Meeting on 3 March.

All APEC Member Economies implement IAPs to guide their efforts in achieving APEC's Bogor goals. The IAP review process provides each Member Economy with the occasion to have their progress toward these goals assessed by independent experts. Three APEC Member Economies are having their IAPs reviewed at the APEC meetings currently being held in Lima. This process involves a presentation by the fore-mentioned experts to a meeting of Member Economies, followed by an opportunity to query the economy under review for details of their IAP.