Expansion of trade depends not just upon favorable trade rules, but financial and monetary integration between nations, as well as the availability of affordable transport fuels. I will argue that current APEC negotiations to increase trade within the Pacific region are a hollow exercise because the preconditions necessary for expanded commerce are disappearing. The peoples of this region therefore need to develop alternative economic plans and strategies.
1. The global economic context
The global economic context for the current APEC meetings is not being described publicly in plain, understandable terms by policy makers. That context consists of the slowing, ending, and reversal of the economic growth that was seen in most nations during the past few decades. This reversal of growth is happening due to the convergence of two factors: the deflation of history’s biggest credit bubble, and the depletion of the fuel that made the economic miracle of the 20th century possible. That fuel, of course, is oil.
The world’s petroleum is not about to run out, as the oil industry never tires of reminding us. However, we are indeed seeing flat-lining of production of the cheaply produced, easily accessible crude that has heretofore enabled continuing growth in world economic activity. World crude oil production has failed to increase significantly for the past seven years, while prices have doubled and tripled. The cost to the industry to develop new oil production capacity has soared from $20 per barrel just a few years ago to roughly $85 today. More
