Asia Pacific Economic Cooperation (APEC), founded by a dozen countries in 1989,has become a forum of twenty-one countries that address economic issues in the Asia-Pacific region. This diverse group includes the US, Canada, China, Taiwan (officially Chinese Taipei). Hong Kong, Japan, Australia, New Zealand, the Philippines, Thailand, Singapore, Indonesia, Malaysia, Brunei, South Korea, Papua New Guinea, Mexico, Chile, Peru, Russia, and Vietnam.
Together, the APEC countries account for over 50 per cent of the world’s merchandise trade, half the global GNP, and two-fifths of the world population. Operating from a modest secretariat in Singapore, APEC sponsors regular meetings and annual summits of senior government officials and heads of state. APEC operates by consensus rather than through binding agreements and the type of legalism evident in the North American Free Trade Agreement. In this process of “concerted unilateralism”, APEC members define broad regional goals but leave the specific aspects of implementation to each nation.
APEC consists of three occasionally overlapping processes. The first is economic and technical cooperation promoting economic and human resource development, or “Eco-tech”, Second is trade and investment liberalization, an agenda that emerged at its 1993 meeting when US president Clinton invited the 18 APEC leaders to Blake Island, Washington, for the first-ever APEC Economic Leaders Meeting. The Borgor Declaration, adopted in 1994, proclaimed the elimination of all trade and investment barriers by 2010 for APEC’s wealthiest countries and by 2010 for its poorest ones. Subsequent meetings led to a refinement of these goals in terms of individual and Collective Action Plans that were to provide the actual liberalization commitments.
At the 1997 Vancouver meeting, APEC leaders agreed to negotiate specific, mandatory trade liberalization targets in nine sectors on a first-track basis covering $ 1.5 trillion in trade (known as Early Voluntary Sectoral Liberalization). Those sectors included: chemicals, fisheries, forestry, energy goods and services, environmental goods and services, gems and jeweler, medical equipment, toys, and a telecommunications mutual recognition agreement. While the last was approved in June 1998, Japan’s opposition to liberalization in fishers and forestry effectively torpedoed the broader initiative.
At the 1998 Kuala Lumpur Meeting, leaders agreed to bring the proposals to the World Trade Organisation’s next round of negotiations in 2000, largely as a face-saving initiative. The third-and weakest-process is the sustainable development agenda, which also emerged within APEC in 1993.To date, this process has been characterized by a flurry of small-scale, capacity-building projects and little else beyond statements of principles and a meeting on marine resources earlier this year.
The weakness of the sustainable development agenda has five major causes: poor leadership by the wealthier countries, most prominently the United States: popular oppositions to APEC’s free trade agenda; the failure to connect the trade, investment, and environmental tracks; the weakness of pro-sustainable development forces within negotiating governments (most of which are dominated by commercial interests); and the inability of pro-sustainable development forces from civil society to penetrate the national and regional processes of policy formulation.
The challenge of working with diverse economies and varying perspectives on trade and investment regulation gives APEC a certain informality and lack of cohesiveness, Although the APEC forum has declared its support for free trade, many members oppose mandatory implementation schedules for comprehensive tariff and quota reduction, indeed, some countries-principally Malaysia and Japan-have insisted that the liberalization goals be non-binding and have opposed the US demand that all economic sectors be opened to foreign trade and investment. Countries that oppose the US in its drive to convert APEC into another free trade area would prefer that APEC remain a consultative organization that facilitates technical cooperation on economic matters.