Though battered and bruised by the banking crisis, the 17-year-old European Union is far from out. While its 500 million residents comprise just one-fourteenth of the world's population, the EU produced more than one-fourth of the global GDP in 2009. That makes the EU the world's largest economic entity. The EU also accounts for one-fifth of global imports-exports, while the euro is the second-most widely-held reserve currency in the world. The EU clearly punches above its weight.
That's the good news.
The bad news is that the EU's total GDP fell 11 percent last year, and is expected to fall another 2 percent this year, according to the IMF. Two of its members, Greece and Ireland, have had to get multi-billion-dollar bailouts, while two others, Portugal and Spain, teeter on the brink.
Meanwhile, Asia has come through relatively unscathed. The IMF projects Asia's GDP to grow 7.9 percent in 2010, and 6.7 percent in 2011.
Asia’s clean bill of health presents two major opportunities. The first is to re-ignite the drive towards closer economic cooperation that has been stalled since the late 1990s Asian Financial Crisis.
I was a panelist at the recent APEC Forum in Yokohama, Japan. It reinforced my impression that APEC remains a loose confederation. Members border the same ocean, but otherwise do not share many of the same economic interests.
In 1994, APEC set free and open trade and investments objectives for its member economies, known as the Bogor Goals. While encouraged by the great strides these economies have made toward the goals, I also agree with critics who say they are hampered by a lack of numerical targets to which nations can aspire, as well as the teeth to spur on laggards.
A more recent APEC proposal, the Free Trade Area of the Asia-Pacific (FTAAP), would create a free trade zone that would get rid of the current overlapping and conflicting free trade agreements between members.
Unfortunately, FTAAP remains in limbo, bogged down by protectionist policies, and a lack of political will among its members to overcome them.
I believe FTAAP is a positive way forward. It would boost trade and growth for everyone in the region.