Revisiting sectoral liberalization: An alternative to the Free Trade Area of the Asia-Pacific? Implications for the Philippines

This paper develops a modality of liberalization for APEC, based on a sectoral level, as an alternative to the Free Trade Area of the Asia-Pacific (FTAAP). This model, originally developed by Wonnacott (1994), argues for the liberalization, on a Most Favoured Nation (MFN) basis, of sectors where APEC members are principal suppliers. The main advantage of this option is that it skirts the free rider problem that usually afflicts MFN liberalization. While this approach would benefit APEC as a group, it impacts different members differently. The paper examines the implications of such a liberalization modality in APEC on the Philippines, as a case study.