APEC The Challenges of Asia Pacific Economic Cooperation

APEC: The Challenges of Asia Pacific Economic Cooperation
Author(s): Martin Rudner

Source: Modern Asian Studies, Vol. 29, No. 2 (May, 1995), pp. 403-437
Published by: Cambridge University Press
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Modern Asian Studies
29,
2
(1995), pp. 403-437.
Printed in Great Britain Modern Asian Studies
29,
2
(1995), pp. 403-437.
Printed in Great Britain Modern Asian Studies
29,
2
(1995), pp. 403-437.
Printed in Great Britain
APEC:
The
Challenges of
Asia
Pacific
Economic
Cooperation
MARTIN RUDNER
Norman Paterson School
of
International
Affairs
Carleton
University,
Ottawa
International trade
figures prominently
in the economic
growth
strat-
egies
of East and Southeast Asian countries.
Despite
the economic
recession
experienced
across much of the world since the
early I99oS,
the
pace
of economic
growth
was sustained
virtually
unabated in the
countries of East and Southeast Asia.'
During
the entire decade of
the
g98os
the East and Southeast Asian economies
grew
more than
twice as
rapidly
as the rest of the world
economy. Along
with this
growth performance,
international trade in the East and Southeast
Asian
region
increased at about twice the rate of
Europe
and North
America. Merchandise
exports
in East and Southeast Asia increased
at an annual
average
rate of
Io%
per
annum between
1965
and
I989.
In
1990
and
1991
aggregate
merchandise
exports
from Asia's
Newly
Industrializing
Economies
(South Korea,
Singapore,
Taiwan and
Hong Kong) grew by
9.o% and
1.4%,
while the four ASEAN
(Association
of Southeast Asian
Nations) developing
countries
(Indonesia, Malaysia,
the
Philippines, Singapore
and
Thailand)
recorded
average
increases of
12.9%
and
I4.3%, respectively.2
Expanding
merchandise
exports
were
accompanied by surging capital
inflows and
rising
investment
rates,
culminating
in accelerated
The countries of the East and Southeast
Asia,
for
purposes
of this
paper,
include
Japan,
the
Republic
of
(South) Korea, China,
Taiwan
(Republic
of
China), Hong
Kong
and the six members of the Association of Southeast Asian Nations
(ASEAN):
Brunei, Indonesia, Malaysia,
the
Philippines, Singapore,
and Thailand.
2
World
Bank,
The
Challenge of Development,
World
Development
Report
Igg9, published
for the World Bank
by
Oxford
University Press, I99 ,
Table
14;
Asian
Development
Outlook
iggi,
Table AI
3.
ASEAN consists of the four
developing countries, Indonesia,
Malaysia,
the
Philippines
and
Thailand, together
with oil-rich Brunei and
Singapore,
classed
among
the Asian NIEs. The
grouping
of data is this
study
sometimes
addresses ASEAN as a
whole,
or it
may
differentiate between ASEAN countries at
various levels of
development,
as is relevant and
appropriate.
oo26-749X/95/$5.oo
+.oo ?
I995 Cambridge University
Press
403
APEC:
The
Challenges of
Asia
Pacific
Economic
Cooperation
MARTIN RUDNER
of
International
Affairs
Carleton
University,
Ottawa
International trade
figures prominently
in the economic
growth
strat-
egies
Despite
the economic
recession
experienced
early I99oS,
the
pace
of economic
growth
was sustained
virtually
unabated in the
During
the
g98os
grew
more than
twice as
rapidly
economy. Along
with this
growth performance,
Asian
region
Europe
and North
exports
at an annual
average
rate of
Io%
per
annum between
1965
and
I989.
In
1990
and
1991
aggregate
merchandise
exports
from Asia's
Newly
Industrializing
Economies
(South Korea,
Singapore,
Taiwan and
Hong Kong) grew by
9.o% and
1.4%,
(Association
of Southeast Asian
Nations) developing
countries
the
and
Thailand)
recorded
average
increases of
12.9%
and
Expanding
merchandise
exports
were
inflows and
rising
investment
rates,
culminating
in accelerated
Asia,
for
purposes
of this
paper,
include
Japan,
the
Republic
of
Taiwan
(Republic
of
China), Hong
Kong
(ASEAN):
the
and Thailand.
2
World
Bank,
The
World
Development
Report
Igg9, published
for the World Bank
by
Oxford
Table
14;
Asian
Development
Outlook
iggi,
Table AI
3.
Malaysia,
the
Philippines
and
Thailand, together
Singapore,
classed
among
the Asian NIEs. The
grouping
of data is this
study
sometimes
whole,
or it
may
various levels of
development,
as is relevant and
appropriate.
oo26-749X/95/$5.oo
+.oo ?
Press
403
APEC:
The
Challenges of
Asia
Pacific
Economic
Cooperation
MARTIN RUDNER
of
International
Affairs
Carleton
University,
Ottawa
International trade
figures prominently
in the economic
growth
strat-
egies
Despite
the economic
recession
experienced
early I99oS,
the
pace
of economic
growth
was sustained
virtually
unabated in the
During
the
g98os
grew
more than
twice as
rapidly
economy. Along
with this
growth performance,
Asian
region
Europe
and North
exports
at an annual
average
rate of
Io%
per
annum between
1965
and
I989.
In
1990
and
1991
aggregate
merchandise
exports
from Asia's
Newly
Industrializing
Economies
(South Korea,
Singapore,
Taiwan and
Hong Kong) grew by
9.o% and
1.4%,
(Association
of Southeast Asian
Nations) developing
countries
the
and
Thailand)
recorded
average
increases of
12.9%
and
Expanding
merchandise
exports
were
inflows and
rising
investment
rates,
culminating
in accelerated
Asia,
for
purposes
of this
paper,
include
Japan,
the
Republic
of
Taiwan
(Republic
of
China), Hong
Kong
(ASEAN):
the
and Thailand.
2
World
Bank,
The
World
Development
Report
Igg9, published
for the World Bank
by
Oxford
Table
14;
Asian
Development
Outlook
iggi,
Table AI
3.
Malaysia,
the
Philippines
and
Thailand, together
Singapore,
classed
among
the Asian NIEs. The
grouping
of data is this
study
sometimes
whole,
or it
may
various levels of
development,
as is relevant and
appropriate.
oo26-749X/95/$5.oo
+.oo ?
Press
403
growth
of Gross Domestic Product
(GDP) along
with a
significant
reduction in the incidence of
poverty.3
A
striking
feature of East and Southeast Asia's
dynamic growth
economy
is the
synergy
that has been achieved between countries
at
various levels of economic
development.
The
region
includes
one
advanced industrial
country, Japan;
a
low-income, large population
country, China;
four
Newly Industrializing
Economies,
Hong Kong,
South
Korea,
Singapore
and
Taiwan;
an oil-rich
micro-state, Brunei;
and four
developing
countries of
differing
economic
capabilities
and
growth
records.4 Of
these,
Malaysia
and Thailand rank
among
the
rapidly industrializing, high-growth,
middle-income
developing
eco-
nomies.
Indonesia,
a
large
and
populous
low-income
country,
has
achieved accelerated economic
development
over the
past quarter
cen-
tury. By way
of
contrast,
the
Philippines
has
experienced laggard
growth
and
deepening impoverishment.
In
China,
the Communist
gov-
ernment has
implemented
economic reforms that
engendered
a
dynamic expansion
of
agriculture, industry
and
exports
in this low-
income
country,
most
notably
in its so-called
Special
Economic Zones.
Economic Relations in the Asia Pacific
Region
Beginning
in
1986
a
profound
and
far-reaching
shift occurred in the
geographic pattern
of trade in Asia. From that
point on,
intra-Asian
3
Cf. Geoffrey
Lamb and Rachel
Weaving (eds) Managing Policy Reform
in the Real
World: Asian
Experiences,
EDI Seminar
Series, Washington:
World
Bank, i992;
and
Rachain
Chintayarangsan, Nattapong Thongpakdee
and
Pruttipohn Nakornchai,
'ASEAN Economies. Macro-Economic
Perspective,'
ASEAN Economic
Bulletin,
vol.
8,
no.
3 (I992).
For case studies of Southeast Asian
development performance, see,
eg.,
George Abonyi
and
Bunyaraks Ninsananda,
Thailand:
Development Planning
in Turbu-
lent
Times,
Asia
Paper
no.
3, University
of Toronto-York
University Joint
Centre for
Asia Pacific
Studies, 1989;
Mohamed
Ariff,
The
Malaysian Economy:
Pacific
Connections,
Singapore:
Oxford
University Press, I99I;
Daniel
Lacson,
The
Philippines Yesterday,
Today
and Tomorrow: Political and Socio-Economic
Developments, Singapore:
Times Aca-
demic Press for the Institute of
Policy Studies, 1991;
K.H. Lee and
Shyamala Nagaraj
(eds),
The
Malaysian Economy Beyond iggo:
International and Domestic
Perspectives,
Kuala
Lumpur:
Persatuan Ekonomi
Malaysia, I991;
Martin
Rudner,
'Repelita-V
and the
Indonesian
Economy,'
Review
of
Indonesian and
Malaysian Affairs
vol.
25,
no. 2
(1991);
R.
Thillainathan,
'Malaysian Economy
in the
i990s:
The
Issues, Lessons,
Challenges
and
Outlook,' Malaysian
Journal of
Economic
Studies,
vol.
27 (1990).
4
Though they
are
part
of this same
geographic region,
the Indochina states of
Vietnam,
Cambodia and Laos
pursued ideologically
and
politically-determined pol-
icies that
effectively
isolated themselves from the
emergent
Asian
trading system,
so
that
they
remained
among
the
poorest,
most
deprived
countries in all Asia.
Following
the Vietnamese withdrawal from Cambodia and the
collapse
of the Soviet Commun-
ism,
consideration is
currently being given
to
ways
and means of
re-integrating
the
growth
(GDP) along
with a
significant
poverty.3
A
striking
dynamic growth
economy
is the
synergy
at
development.
The
region
includes
one
advanced industrial
country, Japan;
a
country, China;
four
Economies,
Hong Kong,
South
Korea,
Singapore
and
Taiwan;
an oil-rich
and four
developing
countries of
differing
economic
capabilities
and
growth
records.4 Of
these,
Malaysia
and Thailand rank
among
the
middle-income
developing
eco-
nomies.
Indonesia,
a
large
and
populous
low-income
country,
has
development
over the
past quarter
cen-
tury. By way
of
contrast,
the
Philippines
has
experienced laggard
growth
and
In
China,
the Communist
gov-
ernment has
implemented
engendered
a
dynamic expansion
of
and
exports
in this low-
income
country,
most
notably
in its so-called
Special
Economic Zones.
Region
Beginning
in
1986
a
profound
and
far-reaching
geographic pattern
point on,
intra-Asian
3
Cf. Geoffrey
Lamb and Rachel
in the Real
World: Asian
Experiences,
EDI Seminar
Series, Washington:
World
Bank, i992;
and
Rachain
and
Perspective,'
ASEAN Economic
Bulletin,
vol.
8,
no.
3 (I992).
eg.,
George Abonyi
and
Thailand:
in Turbu-
lent
Times,
Asia
Paper
no.
3, University
of Toronto-York
University Joint
Centre for
Asia Pacific
Studies, 1989;
Mohamed
Ariff,
The
Malaysian Economy:
Pacific
Connections,
Singapore:
Oxford
Daniel
Lacson,
The
Today
Times Aca-
K.H. Lee and
Shyamala Nagaraj
(eds),
The
Perspectives,
Kuala
Lumpur:
Persatuan Ekonomi
Malaysia, I991;
Martin
Rudner,
'Repelita-V
and the
Indonesian
Economy,'
Review
of
Indonesian and
Malaysian Affairs
vol.
25,
no. 2
(1991);
R.
Thillainathan,
'Malaysian Economy
in the
i990s:
The
Issues, Lessons,
Challenges
and
Outlook,' Malaysian
Journal of
Economic
Studies,
vol.
27 (1990).
4
Though they
are
part
of this same
geographic region,
Vietnam,
Cambodia and Laos
and
icies that
effectively
emergent
Asian
trading system,
so
that
they
remained
among
the
poorest,
most
deprived
Following
collapse
ism,
consideration is
to
ways
and means of
re-integrating
the
growth
(GDP) along
with a
significant
poverty.3
A
striking
dynamic growth
economy
is the
synergy
at
development.
The
region
includes
one
advanced industrial
country, Japan;
a
country, China;
four
Economies,
Hong Kong,
South
Korea,
Singapore
and
Taiwan;
an oil-rich
and four
developing
countries of
differing
economic
capabilities
and
growth
records.4 Of
these,
Malaysia
and Thailand rank
among
the
middle-income
developing
eco-
nomies.
Indonesia,
a
large
and
populous
low-income
country,
has
development
over the
past quarter
cen-
tury. By way
of
contrast,
the
Philippines
has
experienced laggard
growth
and
In
China,
the Communist
gov-
ernment has
implemented
engendered
a
dynamic expansion
of
and
exports
in this low-
income
country,
most
notably
in its so-called
Special
Economic Zones.
Region
Beginning
in
1986
a
profound
and
far-reaching
geographic pattern
point on,
intra-Asian
3
Cf. Geoffrey
Lamb and Rachel
in the Real
World: Asian
Experiences,
EDI Seminar
Series, Washington:
World
Bank, i992;
and
Rachain
and
Perspective,'
ASEAN Economic
Bulletin,
vol.
8,
no.
3 (I992).
eg.,
George Abonyi
and
Thailand:
in Turbu-
lent
Times,
Asia
Paper
no.
3, University
of Toronto-York
University Joint
Centre for
Asia Pacific
Studies, 1989;
Mohamed
Ariff,
The
Malaysian Economy:
Pacific
Connections,
Singapore:
Oxford
Daniel
Lacson,
The
Today
Times Aca-
K.H. Lee and
Shyamala Nagaraj
(eds),
The
Perspectives,
Kuala
Lumpur:
Persatuan Ekonomi
Malaysia, I991;
Martin
Rudner,
'Repelita-V
and the
Indonesian
Economy,'
Review
of
Indonesian and
Malaysian Affairs
vol.
25,
no. 2
(1991);
R.
Thillainathan,
'Malaysian Economy
in the
i990s:
The
Issues, Lessons,
Challenges
and
Outlook,' Malaysian
Journal of
Economic
Studies,
vol.
27 (1990).
4
Though they
are
part
of this same
geographic region,
Vietnam,
Cambodia and Laos
and
icies that
effectively
emergent
Asian
trading system,
so
that
they
remained
among
the
poorest,
most
deprived
Following
collapse
ism,
consideration is
to
ways
and means of
re-integrating
the
404 404 404
MARTIN RUDNER MARTIN RUDNER MARTIN RUDNER
ASIA PACIFIC ECONOMIC COOPERATION ASIA PACIFIC ECONOMIC COOPERATION ASIA PACIFIC ECONOMIC COOPERATION
TABLE I
Matrix
of
Intra-Asian Trade,
ig99
Exports
to: ASEANa Asian NIEsb
Japan
China
$b.
%
changec
$b. %
change'
$b. %
change'
$b. %
changec
Exports
from:
ASEANb
4.5 11.7
22.6
22.4
22.8 9.6
2.3 30.3
Asian NIEs'
24.8 I7.7 41.7 25.8 6.4
32.0 20.o 9.8
China 2.1
15.9 36.3
22.6 10.2
11.5
- -
Japan 25.6 13.9 66.9 17.8
- -
8.6
40.0
a
Excludes
Singapore
b
Includes
Hong Kong, Republic
of
Korea,
Taiwan and
Singapore
cPercent
change
over
previous year
Source: Asian
Development
Bank,
Asian
Development
Outlook
i993, (Oxford University
Press, 1993).
trade and investment
emerged
as the most
important
and most
rapidly expanding
dimension of Asia's international economic rela-
tions.5 These trade-based
developments
also
generated
more intensive
economic
linkages
across the
Pacific,
with East and Southeast Asia
becoming
the most
important regional trading partner
for the US.
Two-way
trade flows between the East and Southeast Asia and the
United States accounted for
32.5%
of total US trade in
1990,
surpass-
ing
US trade with Canada/Mexico
(25.9%)
and the
European
Com-
munity (21.3%).
Of the total flow of trade between Asia and the
US,
Japan
accounted for
15.6%,
while the NIEs and ASEAN countries
accounted for
16.9%.
Patterns
of
Trade and Investment in East and Southeast Asia
The
regional trading system
that
emerged
in East and Southeast
Asia was
predicated
on a continuous
restructuring
and relocation of
industrial
production
across the
region,
as it
responded
to
ongoing,
dynamic
shifts in
comparative
international
advantage.6
A
cascading
flow of industrial
investment,
from
Japan
to the
NIEs,
and then
onwards to China and the ASEAN
developing
countries,
provided
much of the stimulus for intra-Asian trade
development (Table i).
Indochina countries into the
regional
economic framework for East and Southeast
Asia. Vide
Mya Than, 'ASEAN,
Indo-China and
Myanmar:
Towards Economic
Co-operation?'
ASEAN Economic Bulletin
(Nov
199
).
5
Asia
Development
Outlook
i99i,
Manila: Asian
Development
Bank, 1991,
p.
43.
6
F. A.
Alburo,
C. C. Bautista and M. S. H.
Gochoco,
'Pacific Direct Investment
Flows into
ASEAN,'
ASEAN Economic
Bulletin,
vol.
8,
no.
3 (1992).
TABLE I
Matrix
of
Intra-Asian Trade,
ig99
Exports
Japan
China
$b.
%
changec
$b. %
change'
$b. %
change'
$b. %
changec
Exports
from:
ASEANb
4.5 11.7
22.6
22.4
22.8 9.6
2.3 30.3
Asian NIEs'
24.8 I7.7 41.7 25.8 6.4
32.0 20.o 9.8
China 2.1
15.9 36.3
22.6 10.2
11.5
- -
Japan 25.6 13.9 66.9 17.8
- -
8.6
40.0
a
Excludes
Singapore
b
Includes
Hong Kong, Republic
of
Korea,
Taiwan and
Singapore
cPercent
change
over
previous year
Source: Asian
Development
Bank,
Asian
Development
Outlook
Press, 1993).
emerged
as the most
important
and most
rapidly expanding
developments
also
generated
more intensive
economic
linkages
across the
Pacific,
becoming
the most
for the US.
Two-way
32.5%
1990,
surpass-
ing
(25.9%)
and the
European
Com-
munity (21.3%).
US,
Japan
accounted for
15.6%,
accounted for
16.9%.
Patterns
of
The
that
emerged
Asia was
predicated
on a continuous
restructuring
and relocation of
industrial
production
across the
region,
as it
responded
to
ongoing,
dynamic
shifts in
comparative
international
advantage.6
A
cascading
flow of industrial
investment,
from
Japan
to the
NIEs,
and then
developing
countries,
provided
regional
Asia. Vide
Mya Than, 'ASEAN,
Indo-China and
Myanmar:
Towards Economic
Co-operation?'
(Nov
199
).
5
Asia
Development
Outlook
i99i,
Manila: Asian
Development
Bank, 1991,
p.
43.
6
F. A.
Alburo,
Gochoco,
Flows into
ASEAN,'
ASEAN Economic
Bulletin,
vol.
8,
no.
3 (1992).
TABLE I
Matrix
of
Intra-Asian Trade,
ig99
Exports
Japan
China
$b.
%
changec
$b. %
change'
$b. %
change'
$b. %
changec
Exports
from:
ASEANb
4.5 11.7
22.6
22.4
22.8 9.6
2.3 30.3
Asian NIEs'
24.8 I7.7 41.7 25.8 6.4
32.0 20.o 9.8
China 2.1
15.9 36.3
22.6 10.2
11.5
- -
Japan 25.6 13.9 66.9 17.8
- -
8.6
40.0
a
Excludes
Singapore
b
Includes
Hong Kong, Republic
of
Korea,
Taiwan and
Singapore
cPercent
change
over
previous year
Source: Asian
Development
Bank,
Asian
Development
Outlook
Press, 1993).
emerged
as the most
important
and most
rapidly expanding
developments
also
generated
more intensive
economic
linkages
across the
Pacific,
becoming
the most
for the US.
Two-way
32.5%
1990,
surpass-
ing
(25.9%)
and the
European
Com-
munity (21.3%).
US,
Japan
accounted for
15.6%,
accounted for
16.9%.
Patterns
of
The
that
emerged
Asia was
predicated
on a continuous
restructuring
and relocation of
industrial
production
across the
region,
as it
responded
to
ongoing,
dynamic
shifts in
comparative
international
advantage.6
A
cascading
flow of industrial
investment,
from
Japan
to the
NIEs,
and then
developing
countries,
provided
regional
Asia. Vide
Mya Than, 'ASEAN,
Indo-China and
Myanmar:
Towards Economic
Co-operation?'
(Nov
199
).
5
Asia
Development
Outlook
i99i,
Manila: Asian
Development
Bank, 1991,
p.
43.
6
F. A.
Alburo,
Gochoco,
Flows into
ASEAN,'
ASEAN Economic
Bulletin,
vol.
8,
no.
3 (1992).
405 405 405
406
MARTIN RUDNER
Originally
most of the direct
foreign
investment in the
region
eman-
ated from
Japan,
and was concentrated in labour-intensive manufac-
turing
in the Asian
region.
More
recently,
the NIEs have become
important
investors in
export-oriented
labour-intensive manufactur-
ing
in the ASEAN
developing
countries.
By
the
early I99os,
the Asian
NIEs accounted for
nearly
30%
of direct
foreign
investment in the
four ASEAN
developing
economies,
with Taiwan itself
contributing
over
15.4%,
and
Japan 15.2%.7
The
process
of
foreign investment-inspired export-oriented
indus-
trialization in the
NIEs,
and now in China and the ASEAN
countries,
has contributed to the creation of
greater complementarity
across the
economies of East and Southeast Asia. Trade and investment flows
tended to reflect the
dynamic comparative advantages
of countries at
different levels of industrial and economic
development.
The
pattern
of
regional
trade has become more
specialized,
with the
NIEs,
China
and ASEAN countries
concentrating
on labour and resource-intensive
exports
in
exchange
for
Japanese technology-intensive products
and
more skill-intensive
goods
and services from the Asian NIEs.8
By
relocating production
in which
they
were no
longer
efficient to
neigh-
bouring
countries
offering
locational and
competitive advantages,
investment from
Japan
and the NIEs
generated greatly
increased
exports
from
transplanted
industries in Asian
developing countries,
along
with a
rapidly accelerating intra-industry
trade
among
the
regional partners.9
Today Japan
and the NIEs account for the
preponderant
share of
intra-Asian
trade, about
70%
of the
total,
although ASEAN trade
with
Japan
and with the NIEs is
expanding rapidly.
Trade
among
the ASEAN countries themselves remains small
by comparison,
even
though
the ASEAN countries are the
only
ones
offering
each other
some measure of trade
preference. Except
for this ASEAN
preferential
arrangement,
which remains of minor
consequence,
there are no other
regional
institutional
arrangements affecting
flows
among
the East and Southeast Asian
countries,
other than the
policies pursued individually by
the
governments
concerned.
7
Data from
Jardine,
Flemming,
cited in The Economist
(8 May i993),
pp.
70-I.
8
Mohammed Ariff and Tan Eu
Chye,
'ASEAN-Pacific Trade
Relations,'
ASEAN
Economic
Bulletin,
vol.
8,
no.
3 (1992),
9
Ippei Yamazawa,
et
al.,
'Trade and Industrial
Adjustment
in the Pacific Asian
Countries',
The
Developing
Economies
(i983); Young
Sun
Lee,
'Intra-Industry
Trade
in the Pacific
Basin,'
International
EconomicJournal (Spring I987);
'Intra-Asian
Trade,'
and 'Intra-Asian Investment' Asian
Development Outlook
g99i,
pp.
43-9.
406
MARTIN RUDNER
Originally
most of the direct
foreign
investment in the
region
eman-
ated from
Japan,
turing
in the Asian
region.
More
recently,
important
investors in
export-oriented
ing
in the ASEAN
developing
countries.
By
the
early I99os,
the Asian
NIEs accounted for
nearly
30%
of direct
foreign
investment in the
four ASEAN
developing
economies,
with Taiwan itself
contributing
over
15.4%,
and
Japan 15.2%.7
The
process
of
indus-
trialization in the
NIEs,
countries,
across the
of countries at
development.
The
pattern
of
regional
specialized,
with the
NIEs,
China
and ASEAN countries
concentrating
exports
in
exchange
for
and
goods
By
in which
they
were no
longer
efficient to
neigh-
bouring
countries
offering
locational and
investment from
Japan
and the NIEs
generated greatly
increased
exports
from
transplanted
industries in Asian
along
with a
trade
among
the
regional partners.9
Today Japan
preponderant
share of
intra-Asian
trade, about
70%
of the
total,
with
Japan
expanding rapidly.
Trade
among
by comparison,
even
though
only
ones
offering
each other
preference. Except
for this ASEAN
preferential
arrangement,
consequence,
there are no other
regional
institutional
flows
among
countries,
other than the
the
governments
concerned.
7
Data from
Jardine,
Flemming,
(8 May i993),
pp.
70-I.
8
Chye,
Relations,'
ASEAN
Economic
Bulletin,
vol.
8,
no.
3 (1992),
9
Ippei Yamazawa,
et
al.,
Adjustment
Countries',
The
Developing
Economies
(i983); Young
Sun
Lee,
'Intra-Industry
Trade
in the Pacific
Basin,'
International
'Intra-Asian
Trade,'
Development Outlook
g99i,
pp.
43-9.
406
MARTIN RUDNER
Originally
most of the direct
foreign
investment in the
region
eman-
ated from
Japan,
turing
in the Asian
region.
More
recently,
important
investors in
export-oriented
ing
in the ASEAN
developing
countries.
By
the
early I99os,
the Asian
NIEs accounted for
nearly
30%
of direct
foreign
investment in the
four ASEAN
developing
economies,
with Taiwan itself
contributing
over
15.4%,
and
Japan 15.2%.7
The
process
of
indus-
trialization in the
NIEs,
countries,
across the
of countries at
development.
The
pattern
of
regional
specialized,
with the
NIEs,
China
and ASEAN countries
concentrating
exports
in
exchange
for
and
goods
By
in which
they
were no
longer
efficient to
neigh-
bouring
countries
offering
locational and
investment from
Japan
and the NIEs
generated greatly
increased
exports
from
transplanted
industries in Asian
along
with a
trade
among
the
regional partners.9
Today Japan
preponderant
share of
intra-Asian
trade, about
70%
of the
total,
with
Japan
expanding rapidly.
Trade
among
by comparison,
even
though
only
ones
offering
each other
preference. Except
for this ASEAN
preferential
arrangement,
consequence,
there are no other
regional
institutional
flows
among
countries,
other than the
the
governments
concerned.
7
Data from
Jardine,
Flemming,
(8 May i993),
pp.
70-I.
8
Chye,
Relations,'
ASEAN
Economic
Bulletin,
vol.
8,
no.
3 (1992),
9
Ippei Yamazawa,
et
al.,
Adjustment
Countries',
The
Developing
Economies
(i983); Young
Sun
Lee,
'Intra-Industry
Trade
in the Pacific
Basin,'
International
'Intra-Asian
Trade,'
Development Outlook
g99i,
pp.
43-9.
TABLE 2
Asia
Pacific
Trade: Shares
of
Total
Export
and
Imports
(Percentages, 9ggI)
EXPORTS IMPORTS
Japan
USA
Japan
USA
ASIAN NIEs
Hong Kong 5.4 22.7
i6.i 8.i
South Korea
20.9 31.7 29.1 24.0
Taiwan 12.8 36.0
27.9 20.9
ASEAN
Indonesia
42.5
13.1
24.9 11.5
Malaysia 15.3
17.0 24. 16.9
Singapore
8.8
31.2
20.1
16.1
Thailand
17.4
22.7 30.6 10.7
Philippines 19.9
38.0
18.4
19.5
CHINA
14.1
o.6
13.4 10.7
Source:
IMF,
Direction
of
Trade Statistics
Yearbook, i991
Trans-Pacific
Economic
Linkages
The
dynamic changes
in trade relations
among
East and Southeast
Asian countries also fostered a shift in the
pattern
of trade and invest-
ment flows between Asia and the North American economies
(Table
2). During
the late
I98os,
a so-called
'triangular pattern
of trade'
emerged
between
Japan,
the United States and the NIEs and ASEAN
developing
countries.'? The
large-scale
relocation of
Japanese
labour-intensive,
export-oriented manufacturing
to NIEs and
ASEAN countries
represented,
in
effect,
a 'diversion' of
Japan's
con-
siderable bilateral trade
surpluses
with the US
through
these Asian
developing
economies. Most of the
output
of these relocated industries
was
exported,
with the US
being
the
major
destination. These indus-
tries
typically rely
on
imported technologies, equipment components
from
Japan,
which are then assembled or otherwise
processed
for
re-export
to the US. The
triangular trading pattern
that ensued was
characterized
by Japanese
trade
surpluses
with the US and with
Asian NIEs and ASEAN
countries,
and
by
concomitant Asian NIE
and ASEAN trade
surpluses
with the US.
10
Cf. Linda Y. C.
Lim,
'The
US, Japan
and Other East Asian Economies: The
Emergence
of a Pacific Economic
Triangle', Journal of
Southeast Asian Business
(Fall
1991),
pp.
27
et
passim.
TABLE 2
Asia
Pacific
Trade: Shares
of
Total
Export
and
Imports
(Percentages, 9ggI)
EXPORTS IMPORTS
Japan
USA
Japan
USA
ASIAN NIEs
Hong Kong 5.4 22.7
i6.i 8.i
South Korea
20.9 31.7 29.1 24.0
Taiwan 12.8 36.0
27.9 20.9
ASEAN
Indonesia
42.5
13.1
24.9 11.5
Malaysia 15.3
17.0 24. 16.9
Singapore
8.8
31.2
20.1
16.1
Thailand
17.4
22.7 30.6 10.7
Philippines 19.9
38.0
18.4
19.5
CHINA
14.1
o.6
13.4 10.7
Source:
IMF,
Direction
of
Trade Statistics
Yearbook, i991
Trans-Pacific
Economic
Linkages
The
dynamic changes
in trade relations
among
East and Southeast
pattern
(Table
2). During
the late
I98os,
a so-called
'triangular pattern
of trade'
emerged
between
Japan,
developing
countries.'? The
large-scale
relocation of
Japanese
labour-intensive,
to NIEs and
ASEAN countries
represented,
in
effect,
a 'diversion' of
Japan's
con-
surpluses
with the US
through
these Asian
developing
output
was
exported,
with the US
being
the
major
tries
typically rely
on
from
Japan,
processed
for
re-export
to the US. The
that ensued was
characterized
by Japanese
trade
surpluses
countries,
and
by
and ASEAN trade
surpluses
with the US.
10
Cf. Linda Y. C.
Lim,
'The
US, Japan
Emergence
(Fall
1991),
pp.
27
et
passim.
TABLE 2
Asia
Pacific
Trade: Shares
of
Total
Export
and
Imports
(Percentages, 9ggI)
EXPORTS IMPORTS
Japan
USA
Japan
USA
ASIAN NIEs
Hong Kong 5.4 22.7
i6.i 8.i
South Korea
20.9 31.7 29.1 24.0
Taiwan 12.8 36.0
27.9 20.9
ASEAN
Indonesia
42.5
13.1
24.9 11.5
Malaysia 15.3
17.0 24. 16.9
Singapore
8.8
31.2
20.1
16.1
Thailand
17.4
22.7 30.6 10.7
Philippines 19.9
38.0
18.4
19.5
CHINA
14.1
o.6
13.4 10.7
Source:
IMF,
Direction
of
Trade Statistics
Yearbook, i991
Trans-Pacific
Economic
Linkages
The
dynamic changes
in trade relations
among
East and Southeast
pattern
(Table
2). During
the late
I98os,
a so-called
'triangular pattern
of trade'
emerged
between
Japan,
developing
countries.'? The
large-scale
relocation of
Japanese
labour-intensive,
to NIEs and
ASEAN countries
represented,
in
effect,
a 'diversion' of
Japan's
con-
surpluses
with the US
through
these Asian
developing
output
was
exported,
with the US
being
the
major
tries
typically rely
on
from
Japan,
processed
for
re-export
to the US. The
that ensued was
characterized
by Japanese
trade
surpluses
countries,
and
by
and ASEAN trade
surpluses
with the US.
10
Cf. Linda Y. C.
Lim,
'The
US, Japan
Emergence
(Fall
1991),
pp.
27
et
passim.
407 407 407
To be
sure,
the Asian NIEs
generated significant surpluses
on
their own in their trade with the US. Most
exports
from
Hong
Kong,
South Korea and Taiwan
originate
with local firms rather
than subsidiaries of
Japanese
multinationals.1' It is
noteworthy
as
well that much of the
export
trade from Southeast Asia to the US
actually
emanated from local subsidiaries of US
-
not
Japanese
-
multinationals. ASEAN's
leading exports
to North America
consist
of electronics
products
and telecommunications
equipment pro-
duced
by
offshore
manufacturing
facilities of US and Canadian
companies.
The second
largest category
of
exports
includes
gar-
ments,
textiles and
footwear, mostly produced by
Asian NIE-owned
subsidiaries
seeking
to
by-pass
their domestic
quotas
under
the
Multi-Fibre
Arrangement,
and
by
local subcontractors to US
importers.
The third
largest export category
destined to the US
covers various
processed
resource-based
products, mainly
frozen
seafood and other
agricultural items,
which are
characteristically
produced by
local Southeast Asian
producers.
Prescriptions for
a
Regional
Framework
for
Economic
Integration
In contrast with the trade
pactomania engulfing Europe
and the
Americas,
the countries of East and Southeast Asia have been
generally
more outward-oriented and multilateral in their
approaches
to
regional
economic
activity.'2
Yet this
predilection
for
'open regionalism'3
has come under
pressure
from an
increasingly
threatening
international economic environment. There were
mounting
concerns that the stalemated
Uruguay
Round of Multilat-
"
Ibid.,
p.
28.
12
Vide S.
Fujisaki,
et
al.,
'Three Decades of
Development
in the Pacific Basin: An
Overview,' and Heinz
Arndt,
'The Gatt
System,
Free Trade Areas and
Regional
Cooperation,'
both in Takao Fukuchi and Mitsuhiro
Kagami (eds), Perspectives
on the
Pacific
Basin
Economy:
A
Comparison of
Asia and Latin
America, Tokyo:
Institute of Devel-
oping Economies, 1990;
H. E.
English
and
Murray Smith,
'The Role of Multilat-
eralism and
Regionalism:
A Pacific
Perspective'
in Mohamed Ariff
(ed),
The
Pacific
Economy:
Growth and External
Stability, Sydney:
Allen and
Unwin, I99I.
13
Peter
Drysdale, 'Japan
in the Asia-Pacific and the World
Economy,'
in
Japan
and the
World,
vol.
i, Canberra:
Japanese
Studies Association of
Australia,
i99i. See
also Peter
Drysdale
and Ross
Garnaut,
'The Pacific: An
Application
of a General
Theory
of Economic
Integration,'
in C. Fred
Bergsten
and Marcus Noland
(eds),
Pacific Dynamism
and the International Economic
System, Washington,
DC: Institute for
International
Economics,
in association with the Pacific Trade and
Development
Conference
Secretariat,
The Australian National
University, I993.
To be
sure,
the Asian NIEs
on
exports
from
Hong
Kong,
originate
Japanese
noteworthy
as
export
actually
-
not
Japanese
-
leading exports
to North America
consist
of electronics
products
equipment pro-
duced
by
offshore
manufacturing
companies.
The second
largest category
of
exports
includes
gar-
ments,
textiles and
Asian NIE-owned
subsidiaries
seeking
to
by-pass
their domestic
quotas
under
the
Multi-Fibre
Arrangement,
and
by
importers.
The third
destined to the US
covers various
processed
resource-based
products, mainly
frozen
seafood and other
agricultural items,
which are
characteristically
produced by
producers.
Prescriptions for
a
Regional
Framework
for
Economic
Integration
and the
Americas,
generally
approaches
to
regional
economic
activity.'2
Yet this
predilection
for
'open regionalism'3
has come under
pressure
from an
increasingly
threatening
mounting
Uruguay
Round of Multilat-
"
Ibid.,
p.
28.
12
Vide S.
Fujisaki,
et
al.,
'Three Decades of
Development
Arndt,
'The Gatt
System,
Regional
Cooperation,'
on the
Pacific
Basin
Economy:
A
Comparison of
Asia and Latin
America, Tokyo:
Institute of Devel-
H. E.
English
and
Murray Smith,
eralism and
Regionalism:
A Pacific
Perspective'
in Mohamed Ariff
(ed),
The
Pacific
Economy:
Growth and External
Stability, Sydney:
Allen and
Unwin, I99I.
13
Peter
Drysdale, 'Japan
Economy,'
in
Japan
and the
World,
vol.
i, Canberra:
Japanese
Australia,
i99i. See
also Peter
Drysdale
and Ross
Garnaut,
'The Pacific: An
Application
of a General
Theory
of Economic
Integration,'
in C. Fred
Bergsten
and Marcus Noland
(eds),
Pacific Dynamism
System, Washington,
DC: Institute for
International
Economics,
Development
Conference
Secretariat,
University, I993.
To be
sure,
the Asian NIEs
on
exports
from
Hong
Kong,
originate
Japanese
noteworthy
as
export
actually
-
not
Japanese
-
leading exports
to North America
consist
of electronics
products
equipment pro-
duced
by
offshore
manufacturing
companies.
The second
largest category
of
exports
includes
gar-
ments,
textiles and
Asian NIE-owned
subsidiaries
seeking
to
by-pass
their domestic
quotas
under
the
Multi-Fibre
Arrangement,
and
by
importers.
The third
destined to the US
covers various
processed
resource-based
products, mainly
frozen
seafood and other
agricultural items,
which are
characteristically
produced by
producers.
Prescriptions for
a
Regional
Framework
for
Economic
Integration
and the
Americas,
generally
approaches
to
regional
economic
activity.'2
Yet this
predilection
for
'open regionalism'3
has come under
pressure
from an
increasingly
threatening
mounting
Uruguay
Round of Multilat-
"
Ibid.,
p.
28.
12
Vide S.
Fujisaki,
et
al.,
'Three Decades of
Development
Arndt,
'The Gatt
System,
Regional
Cooperation,'
on the
Pacific
Basin
Economy:
A
Comparison of
Asia and Latin
America, Tokyo:
Institute of Devel-
H. E.
English
and
Murray Smith,
eralism and
Regionalism:
A Pacific
Perspective'
in Mohamed Ariff
(ed),
The
Pacific
Economy:
Growth and External
Stability, Sydney:
Allen and
Unwin, I99I.
13
Peter
Drysdale, 'Japan
Economy,'
in
Japan
and the
World,
vol.
i, Canberra:
Japanese
Australia,
i99i. See
also Peter
Drysdale
and Ross
Garnaut,
'The Pacific: An
Application
of a General
Theory
of Economic
Integration,'
in C. Fred
Bergsten
and Marcus Noland
(eds),
Pacific Dynamism
System, Washington,
DC: Institute for
International
Economics,
Development
Conference
Secretariat,
University, I993.
408 408 408
eral Trade
Negotiations might precipitate
the formation of
protec-
tionist
regional
trade blocs in
Europe
and the Americas.
Along
with the
growth
of
exports
from East and Southeast Asia to the
US and
European Community
have come
heightened
tensions over
trade issues. The NIEs and ASEAN
developing
countries feel
particularly
vulnerable to
protectionist
threats to their trade-
focussed
development strategies.
So
far,
the
governments
of East and Southeast Asia remain favour-
ably predisposed
towards the
open
and outward-oriented
regionalism
that has served their economies
well,
at least until now. The delibera-
tions and consultations that take
place
within the
newly
established
framework of Asia Pacific Economic
Cooperation (APEC), involving
East and Southeast Asian countries
along
with Canada and the
United
States,
reflect this
predilection.l4 By
the
early
I99os the APEC
economies accounted for some
40%
of world
trade,
and
50%
of
aggregate global
GDP.
Nevertheless,
Asia's sense of its own vulnerab-
ility
is
prompting
some
governments
at least to
contemplate
defensive
strategic
alternatives for
regional
trade. Thus
Malaysia proposed
the
formation of an East Asian Economic
Group (EAEG),'5
afterwards
amended to an East Asian Economic Caucus
(EAEC),
as a sort of
countervailing
mechanism
against
regional
protectionism
elsewhere.
As another
expression
of
strategic
trade
policy, though
focussed in
particular
on
developing country requirements,
ASEAN has
agreed
to create a free trade area
among
its members at the Southeast Asian
sub-regional
level. Also at a
sub-regional level,
some
neighbouring
countries have established so-called 'trade
triangles,' initially
invol-
ving Malaysia (Johor), Singapore
and Indonesia
(Riau),
as
repres-
enting
subsidized investment-area
counterparts
to domestic
duty-free
enclaves.'6 As for
Japan,
China and the
NIEs, they
seem to exhibit
somewhat more caution and
deliberation,
and indeed more
introspec-
tion in
considering
their
strategic options
for the future of economic
cooperation
in Asia.
14
Martin
Rudner, 'ASEAN,
Asia Pacific Economic
Cooperation,
and Hemi-
spheric
Free Trade for the
Americas,' World
Competition (December i992);
Helen
Hughes,
'Does APEC Make Sense?' ASEAN Economic Bulletin
(November I991).
'1 On the East Asian Economic
Group (EAEG)
and East Asian Economic Caucus
(EAEC) proposals,
see Tan
Kong Yam,
Toh Mun
Heng
and Linda
Low,
'ASEAN
and Pacific Economic
Co-operation,'
ASEAN Economic
Bulletin,
vol.
8,
no.
3 (1992),
pp.
325-8.
16 Chia Siow Yue and Lee Tsao
Yuan,
'Subregional
Economic Zones: A New
Motive Force in Asia-Pacific
Development,'
in
Bergsten
and Noland
(eds), Pacific
Dynamism
System, pp. 225-69.
eral Trade
the formation of
protec-
tionist
regional
trade blocs in
Europe
and the Americas.
Along
with the
growth
of
exports
US and
European Community
have come
heightened
tensions over
developing
countries feel
particularly
vulnerable to
protectionist
focussed
So
far,
the
governments
ably predisposed
towards the
open
regionalism
well,
place
within the
newly
established
along
with Canada and the
United
States,
reflect this
predilection.l4 By
the
early
I99os the APEC
40%
of world
trade,
and
50%
of
aggregate global
GDP.
Nevertheless,
ility
is
prompting
some
governments
at least to
contemplate
defensive
strategic
alternatives for
regional
trade. Thus
Malaysia proposed
the
Group (EAEG),'5
afterwards
(EAEC),
as a sort of
countervailing
mechanism
against
regional
protectionism
elsewhere.
As another
expression
of
strategic
trade
policy, though
focussed in
particular
on
ASEAN has
agreed
among
sub-regional
level. Also at a
sub-regional level,
some
neighbouring
invol-
and Indonesia
(Riau),
as
repres-
enting
counterparts
to domestic
duty-free
enclaves.'6 As for
Japan,
China and the
NIEs, they
seem to exhibit
deliberation,
and indeed more
introspec-
tion in
considering
their
strategic options
cooperation
in Asia.
14
Martin
Rudner, 'ASEAN,
Cooperation,
and Hemi-
spheric
Free Trade for the
Americas,' World
Helen
Hughes,
(November I991).
Group (EAEG)
(EAEC) proposals,
see Tan
Kong Yam,
Toh Mun
Heng
and Linda
Low,
'ASEAN
Co-operation,'
ASEAN Economic
Bulletin,
vol.
8,
no.
3 (1992),
pp.
325-8.
Yuan,
'Subregional
Development,'
in
Bergsten
and Noland
(eds), Pacific
Dynamism
System, pp. 225-69.
eral Trade
the formation of
protec-
tionist
regional
trade blocs in
Europe
and the Americas.
Along
with the
growth
of
exports
US and
European Community
have come
heightened
tensions over
developing
countries feel
particularly
vulnerable to
protectionist
focussed
So
far,
the
governments
ably predisposed
towards the
open
regionalism
well,
place
within the
newly
established
along
with Canada and the
United
States,
reflect this
predilection.l4 By
the
early
I99os the APEC
40%
of world
trade,
and
50%
of
aggregate global
GDP.
Nevertheless,
ility
is
prompting
some
governments
at least to
contemplate
defensive
strategic
alternatives for
regional
trade. Thus
Malaysia proposed
the
Group (EAEG),'5
afterwards
(EAEC),
as a sort of
countervailing
mechanism
against
regional
protectionism
elsewhere.
As another
expression
of
strategic
trade
policy, though
focussed in
particular
on
ASEAN has
agreed
among
sub-regional
level. Also at a
sub-regional level,
some
neighbouring
invol-
and Indonesia
(Riau),
as
repres-
enting
counterparts
to domestic
duty-free
enclaves.'6 As for
Japan,
China and the
NIEs, they
seem to exhibit
deliberation,
and indeed more
introspec-
tion in
considering
their
strategic options
cooperation
in Asia.
14
Martin
Rudner, 'ASEAN,
Cooperation,
and Hemi-
spheric
Free Trade for the
Americas,' World
Helen
Hughes,
(November I991).
Group (EAEG)
(EAEC) proposals,
see Tan
Kong Yam,
Toh Mun
Heng
and Linda
Low,
'ASEAN
Co-operation,'
ASEAN Economic
Bulletin,
vol.
8,
no.
3 (1992),
pp.
325-8.
Yuan,
'Subregional
Development,'
in
Bergsten
and Noland
(eds), Pacific
Dynamism
System, pp. 225-69.
409 409 409
Cooperation:
The Path to
Open
Regionalism
The
inter-governmental
forum known as 'Asia Pacific Economic
Cooperation' (APEC)
had its
origins
in a
1989 proposal by
Aus-
tralian Prime Minister
RJ.
Hawke.
Although
considerable
thought
had
previously
been directed at
refining
a
concept
of Pacific Com-
munity, primarily by
Australian and
Japanese
scholars and offi-
cials,17
the
proposal
that was
put
forward entailed a
studiously
vague
statement of intent
coupled
with an invitation for ministerial-
level discussions in Canberra.
Vagueness
at this
point
was
probably
considered to be
strategically
constructive,
since it allowed sufficient
flexibility
of
purpose
to overcome
suspicion,
reluctance,
or
scepti-
cism. There was little inclination
merely
to recreate a
regional
'talk-shop'
akin to the
Organization
for Economic
Cooperation
and
Development (OECD),
a notion that was dismissed
early on,18
but
no other role model
suggested
itself a
priori
for emulation. As a
consensus built
up
around the core idea of an Asia Pacific economic
cooperation
effort,
APEC
began
to take
shape
without
any perman-
ent institutional
structure,
unfettered
by any specific policy agenda
or
operational
role. Even its
geographic scope
and
membership
criteria remained indeterminate. In the
event,
the APEC
concept
unfolded
incrementally, manifesting
deliberate
prudence
in its form-
ative
phase
of
identifying
needs and
opportunities.
It was
only
at
the fourth APEC ministerial
meeting
in
Bangkok
in
1992
that the
decision was taken to establish a modest secretariat based in
Singapore.
The
indeterminacy
which affected APEC from its birth
spilled
over
even onto its
nomenclature,
which lacks a
descriptive
noun. 'Asia
Pacific Economic
Cooperation
. . .' relates to what
type
of
forum,
or
organization?
It is characteristic of the
ambiguity surrounding
APEC
that its definitive term is still undecided.
17
Vide
'Japan,
Australia Pioneer
Regional Forum,'
North South Institute
Briefing
(B35, I993);
see also Peter
Drysdale,
'The Pacific Trade and
Development
Confer-
ence: A Brief
History,' Pacific
Economic
Papers
(1984),
and H. Edward
English
&
Yoshitaka
Okada,
'Japan
-
Rising
Sun or Western
Star,'
in Fen Osler
Hampson
and
Christopher J.
Maule
(eds),
Canada
Among
Nations
iggo-9g. After
the Cold
War,
Ottawa: Carleton
University Press, I991.
18
Hughes,
'Does APEC Make
Sense?', p.
126.
Cooperation:
The Path to
Open
Regionalism
The
inter-governmental
Cooperation' (APEC)
had its
origins
in a
1989 proposal by
Aus-
RJ.
Hawke.
Although
considerable
thought
had
previously
been directed at
refining
a
concept
of Pacific Com-
Australian and
Japanese
scholars and offi-
cials,17
the
proposal
that was
put
forward entailed a
studiously
vague
statement of intent
coupled
Vagueness
at this
point
was
probably
considered to be
strategically
constructive,
flexibility
of
purpose
to overcome
suspicion,
reluctance,
or
scepti-
merely
to recreate a
regional
'talk-shop'
akin to the
Organization
for Economic
Cooperation
and
Development (OECD),
early on,18
but
no other role model
suggested
itself a
priori
for emulation. As a
consensus built
up
cooperation
effort,
APEC
began
to take
shape
without
any perman-
ent institutional
structure,
unfettered
or
operational
role. Even its
geographic scope
and
membership
event,
the APEC
concept
unfolded
deliberate
prudence
in its form-
ative
phase
of
identifying
needs and
opportunities.
It was
only
at
meeting
in
Bangkok
in
1992
that the
Singapore.
The
indeterminacy
spilled
over
even onto its
nomenclature,
which lacks a
descriptive
noun. 'Asia
Pacific Economic
Cooperation
type
of
forum,
or
organization?
APEC
17
Vide
'Japan,
Australia Pioneer
Regional Forum,'
Briefing
(B35, I993);
see also Peter
Drysdale,
Development
Confer-
ence: A Brief
History,' Pacific
Economic
Papers
(1984),
and H. Edward
English
&
Yoshitaka
Okada,
'Japan
-
Rising
Sun or Western
Star,'
in Fen Osler
Hampson
and
Christopher J.
Maule
(eds),
Canada
Among
Nations
iggo-9g. After
the Cold
War,
Ottawa: Carleton
18
Hughes,
'Does APEC Make
Sense?', p.
126.
Cooperation:
The Path to
Open
Regionalism
The
inter-governmental
Cooperation' (APEC)
had its
origins
in a
1989 proposal by
Aus-
RJ.
Hawke.
Although
considerable
thought
had
previously
been directed at
refining
a
concept
of Pacific Com-
Australian and
Japanese
scholars and offi-
cials,17
the
proposal
that was
put
forward entailed a
studiously
vague
statement of intent
coupled
Vagueness
at this
point
was
probably
considered to be
strategically
constructive,
flexibility
of
purpose
to overcome
suspicion,
reluctance,
or
scepti-
merely
to recreate a
regional
'talk-shop'
akin to the
Organization
for Economic
Cooperation
and
Development (OECD),
early on,18
but
no other role model
suggested
itself a
priori
for emulation. As a
consensus built
up
cooperation
effort,
APEC
began
to take
shape
without
any perman-
ent institutional
structure,
unfettered
or
operational
role. Even its
geographic scope
and
membership
event,
the APEC
concept
unfolded
deliberate
prudence
in its form-
ative
phase
of
identifying
needs and
opportunities.
It was
only
at
meeting
in
Bangkok
in
1992
that the
Singapore.
The
indeterminacy
spilled
over
even onto its
nomenclature,
which lacks a
descriptive
noun. 'Asia
Pacific Economic
Cooperation
type
of
forum,
or
organization?
APEC
17
Vide
'Japan,
Australia Pioneer
Regional Forum,'
Briefing
(B35, I993);
see also Peter
Drysdale,
Development
Confer-
ence: A Brief
History,' Pacific
Economic
Papers
(1984),
and H. Edward
English
&
Yoshitaka
Okada,
'Japan
-
Rising
Sun or Western
Star,'
in Fen Osler
Hampson
and
Christopher J.
Maule
(eds),
Canada
Among
Nations
iggo-9g. After
the Cold
War,
Ottawa: Carleton
18
Hughes,
'Does APEC Make
Sense?', p.
126.
4IO 4IO 4IO
The
Quest
for
a
Regional
Framework
for
International Trade and Investment
From the
outset,
APEC has concentrated on
facilitating
inter-
governmental
consultations on
ways
and means of
enhancing
eco-
nomic
cooperation,
as
defined,
among
countries of the Asia Pacific
region.
However,
it became clear from the deliberations that have
since taken
place
that the initial
ambiguities
associated with the
APEC
concept
and role reflected a
deeper divergence
of
standpoints
among
the countries concerned. The formative
phase
of APEC
-
which has lasted until
today
-
denotes in essence a search for the
basic elements of
community among
the
grouping,
which consists of
countries with different size economies and
varying
levels of
develop-
ment,
and
subscribing
to dissimilar
perspectives
on economic
management.
Initially,
at
least,
Japan
and the United
States,
the countries with
the
largest
economies in the Asia Pacific
region,
held
quite disparate
views of the
prospective
role of APEC.
Japan sought
the creation of
a
regional
architecture for international economic
cooperation
across
the Pacific
basin,
whereas the US wanted a more
loosely-structured
consultative forum on trade-related issues.
Japan
and the Asian
NIEs,
for their
part,
were more inclined to
emphasize
the
implementation
of
projects designed
to
promote regional
economic
inter-dependence.
They
were
sceptical
that mere
exchanges
of views on
policy
coordina-
tion could
genuinely
foster
policy
harmonization and institutional
benefits for the
region
as a whole.
The election of President Clinton heralded a momentous shift in the
American
approach
to APEC. The Clinton administration
designated
APEC as the cornerstone of its
regional
trade
strategy
towards Asia.19
Upon taking
on the annual
chairmanship
of APEC in
September
I992,
the US undertook to
promote
'a
practical,
results-oriented'
19
For a broad overview of the Clinton administration's
approach
to APEC and
regional institution-building
in the Asia Pacific
area,
see the statement of Assistant
Secretary
of State for East Asian and Pacific Affairs Winston Lord to his confirmation
hearings
before the United States Senate
Foreign
Affairs
Committee,
as
reported
in
'Group Therapy',
Far Eastern Economic Review
(15 April I993),
pp. io-Ii.
As
well,
the Clinton administration furthermore indicated its intention to
pursue
the creation
of an Asia Pacific
regional security
architecture.
During
his
July, 1993
visit to
Korea,
President Clinton enunciated four
priorities
for an Asia Pacific
security framework,
including
a continued American
military
commitment to the
region, stronger
efforts
aimed at
curbing
the
proliferation
of
weapons
of mass
destruction,
new
regional
dialogues
on 'common
security challenges,'
and
support
for
democracy
and 'more
open
societies'
throughout
the
region (vide
New York
Times,
I I
July 1993).
The
Quest
for
a
Regional
Framework
for
From the
outset,
facilitating
inter-
governmental
consultations on
ways
and means of
enhancing
eco-
nomic
cooperation,
as
defined,
among
region.
However,
since taken
place
that the initial
ambiguities
associated with the
APEC
concept
deeper divergence
of
standpoints
among
phase
of APEC
-
today
-
basic elements of
community among
the
grouping,
which consists of
varying
levels of
develop-
ment,
and
subscribing
to dissimilar
perspectives
on economic
management.
Initially,
at
least,
Japan
and the United
States,
the countries with
the
largest
region,
held
quite disparate
views of the
prospective
role of APEC.
Japan sought
the creation of
a
regional
cooperation
across
the Pacific
basin,
loosely-structured
Japan
and the Asian
NIEs,
for their
part,
emphasize
the
implementation
of
projects designed
to
promote regional
economic
inter-dependence.
They
were
sceptical
that mere
exchanges
of views on
policy
coordina-
tion could
genuinely
foster
policy
benefits for the
region
as a whole.
American
approach
designated
regional
trade
strategy
towards Asia.19
Upon taking
on the annual
chairmanship
of APEC in
September
I992,
the US undertook to
promote
'a
practical,
results-oriented'
19
approach
to APEC and
in the Asia Pacific
area,
Secretary
hearings
Foreign
Affairs
Committee,
as
reported
in
'Group Therapy',
(15 April I993),
pp. io-Ii.
As
well,
pursue
the creation
of an Asia Pacific
regional security
architecture.
During
his
July, 1993
visit to
Korea,
priorities
for an Asia Pacific
security framework,
including
military
commitment to the
region, stronger
efforts
aimed at
curbing
the
proliferation
of
weapons
of mass
destruction,
new
regional
dialogues
on 'common
and
support
for
democracy
and 'more
open
societies'
throughout
the
region (vide
New York
Times,
I I
July 1993).
The
Quest
for
a
Regional
Framework
for
From the
outset,
facilitating
inter-
governmental
consultations on
ways
and means of
enhancing
eco-
nomic
cooperation,
as
defined,
among
region.
However,
since taken
place
that the initial
ambiguities
associated with the
APEC
concept
deeper divergence
of
standpoints
among
phase
of APEC
-
today
-
basic elements of
community among
the
grouping,
which consists of
varying
levels of
develop-
ment,
and
subscribing
to dissimilar
perspectives
on economic
management.
Initially,
at
least,
Japan
and the United
States,
the countries with
the
largest
region,
held
quite disparate
views of the
prospective
role of APEC.
Japan sought
the creation of
a
regional
cooperation
across
the Pacific
basin,
loosely-structured
Japan
and the Asian
NIEs,
for their
part,
emphasize
the
implementation
of
projects designed
to
promote regional
economic
inter-dependence.
They
were
sceptical
that mere
exchanges
of views on
policy
coordina-
tion could
genuinely
foster
policy
benefits for the
region
as a whole.
American
approach
designated
regional
trade
strategy
towards Asia.19
Upon taking
on the annual
chairmanship
of APEC in
September
I992,
the US undertook to
promote
'a
practical,
results-oriented'
19
approach
to APEC and
in the Asia Pacific
area,
Secretary
hearings
Foreign
Affairs
Committee,
as
reported
in
'Group Therapy',
(15 April I993),
pp. io-Ii.
As
well,
pursue
the creation
of an Asia Pacific
regional security
architecture.
During
his
July, 1993
visit to
Korea,
priorities
for an Asia Pacific
security framework,
including
military
commitment to the
region, stronger
efforts
aimed at
curbing
the
proliferation
of
weapons
of mass
destruction,
new
regional
dialogues
on 'common
and
support
for
democracy
and 'more
open
societies'
throughout
the
region (vide
New York
Times,
I I
July 1993).
4II 4II 4II
work
program
and bolster
up
the
budding organization's
institutional
capacity
to deal with
regional
economic issues. A
proposed
'trade and
investment framework'
represented
the
centrepiece
of this
regional
capacity building
effort for
regional
economic
cooperation. By
autumn of
I993,
the Americans were
warning
that if
European
coun-
tries failed to achieve
progress
on the
GATT,
then the US
might
even
seek an alternative
regional trading arrangement
with its Asia Pacific
partners.
APEC had
become,
for the
US,
a shield and a foil in the
stalled Multilateral Trade
Negotiations.
Other APEC countries
responded cautiously
to this American lead.
Some were
suspicious
that the US was
pushing
its own trade
agenda,
using
APEC as a lever for American ambitions.
Moreover, among
ASEAN countries there was a definite
unwillingness
to see APEC
transformed into a
supranational regime governing
trade and invest-
ment
policy,
or even into an arena for formal trade
negotiations.
As
we shall
see,
the ASEAN
countries,
led in this
respect by Malaysia,
were
acutely
sensitive to
any proposals regarding
APEC that
might
have the
consequence
of
compromising
their
sovereign equality
or
distinctive
group
status within the
larger regional forum,
or otherwise
overriding
their interests as
developing
economies. The
1993
ASEAN
ministers
meeting
insisted that an APEC framework
agreement
on
trade and investment must be consistent with the
GATT,
to counter
US
managed
trade
objectives,
and that APEC itself should remain a
loose consultative
body.
Early on,
some of the more industrialized Asian
participants
were
prepared
to countenance an aid role for
APEC,
as a multilateral
channel for
development
assistance.
Japan,
were
predisposed
to channel aid resources to
APEC-sponsored pro-
jects
in order to
support
Southeast Asian involvement in activities
that accentuate
regional integration (and
to
project
their influence
therein).
Other aid
donors,
and
especially
the US and
Canada,
were
opposed
to APEC
acquiring
an aid role which
they might
not be
able to afford. ASEAN
participants
would have
perhaps
welcomed
an APEC aid channel if it
implied
additional resource
transfers,
but
were
against any
diversion of bilateral assistance to
regional
programs.
The ASEAN
countries,
as a
group, greeted
the
original
APEC initi-
ative with
grave
reservations.20 On the one
hand, Malaysia
and
20
Tan,
Toh and
Low,
'ASEAN and Pacific Economic
Co-operation,'
p. 324
et
passim.
work
program
and bolster
up
the
institutional
capacity
to deal with
regional
economic issues. A
proposed
'trade and
represented
the
centrepiece
of this
regional
capacity building
effort for
regional
economic
cooperation. By
autumn of
I993,
the Americans were
warning
that if
European
coun-
progress
on the
GATT,
then the US
might
even
seek an alternative
partners.
APEC had
become,
for the
US,
Negotiations.
Some were
suspicious
that the US was
pushing
its own trade
agenda,
using
Moreover, among
unwillingness
to see APEC
transformed into a
trade and invest-
ment
policy,
negotiations.
As
we shall
see,
the ASEAN
countries,
led in this
were
acutely
sensitive to
APEC that
might
have the
consequence
of
compromising
their
sovereign equality
or
distinctive
group
status within the
or otherwise
overriding
their interests as
developing
economies. The
1993
ASEAN
ministers
meeting
agreement
on
GATT,
to counter
US
managed
trade
objectives,
loose consultative
body.
Early on,
participants
were
prepared
APEC,
as a multilateral
channel for
development
assistance.
Japan,
were
predisposed
APEC-sponsored pro-
jects
in order to
support
that accentuate
to
project
their influence
therein).
Other aid
donors,
and
especially
the US and
Canada,
were
opposed
to APEC
acquiring
an aid role which
they might
not be
participants
would have
perhaps
welcomed
implied
additional resource
transfers,
but
were
against any
regional
programs.
The ASEAN
countries,
as a
group, greeted
the
original
APEC initi-
ative with
grave
hand, Malaysia
and
20
Tan,
Toh and
Low,
Co-operation,'
p. 324
et
passim.
work
program
and bolster
up
the
institutional
capacity
to deal with
regional
economic issues. A
proposed
'trade and
represented
the
centrepiece
of this
regional
capacity building
effort for
regional
economic
cooperation. By
autumn of
I993,
the Americans were
warning
that if
European
coun-
progress
on the
GATT,
then the US
might
even
seek an alternative
partners.
APEC had
become,
for the
US,
Negotiations.
Some were
suspicious
that the US was
pushing
its own trade
agenda,
using
Moreover, among
unwillingness
to see APEC
transformed into a
trade and invest-
ment
policy,
negotiations.
As
we shall
see,
the ASEAN
countries,
led in this
were
acutely
sensitive to
APEC that
might
have the
consequence
of
compromising
their
sovereign equality
or
distinctive
group
status within the
or otherwise
overriding
their interests as
developing
economies. The
1993
ASEAN
ministers
meeting
agreement
on
GATT,
to counter
US
managed
trade
objectives,
loose consultative
body.
Early on,
participants
were
prepared
APEC,
as a multilateral
channel for
development
assistance.
Japan,
were
predisposed
APEC-sponsored pro-
jects
in order to
support
that accentuate
to
project
their influence
therein).
Other aid
donors,
and
especially
the US and
Canada,
were
opposed
to APEC
acquiring
an aid role which
they might
not be
participants
would have
perhaps
welcomed
implied
additional resource
transfers,
but
were
against any
regional
programs.
The ASEAN
countries,
as a
group, greeted
the
original
APEC initi-
ative with
grave
hand, Malaysia
and
20
Tan,
Toh and
Low,
Co-operation,'
p. 324
et
passim.
4I
2
4I
2
4I
2
Indonesia were
suspicious
of a wider
regional organization
that
might
dilute ASEAN's role within Southeast Asia and subordinate ASEAN
internationally.
On the
other,
Singapore
and the
Philippines,
in
par-
ticular,
were
eager
to
envisage
a more extensive
regional trading
arrangement taking shape through
APEC. In the
event,
the ASEAN
countries
agreed
to
participate
in APEC
subject
to their so-called
'three noes': that APEC have no
legally binding authority,
that it
have no
negotiating right,
and that it
pursue
no
regional agreements
beyond
those reached in the GATT.
Having
concurred in a
loosely-structured APEC,
the ASEAN
gov-
ernments are
generally uneasy
about efforts to
strengthen
its institu-
tional format and enhance its
policy
functions. As the most vulnerable
economies in the
region,
the ASEAN countries are
wary
of APEC
assuming
a
strong leadership
role in
policy
coordination,
lest this lead
to domination
by
their more
powerful trading partners. Malaysia,
in
particular,
has been
aggrieved
at what it
perceives
to be the
failings
and flaws of APEC in not
upholding
the international economic inter-
ests of
developing
countries in face of
heightened protectionism
in
North America and
Europe. Indeed, Malaysia
warned it would
quit
APEC if it threatens to become a
neo-hegemonic
institution dominat-
ing
Asia. So far as the ASEAN
governments
are
concerned,
APEC
would best confine itself to consultative and
information-sharing
activities,
possibly complemented by
aid
support
aimed at
strengthening
the
developing country participants' capacity
for eco-
nomic
analysis
and
policy
formulation.
It remains to be seen whether APEC will
manage
to sustain the
confidence of the ASEAN
countries,
or whether
they
will be con-
strained to turn in frustration to alternative
managed
trade mechan-
isms to
promote
and defend their economic
development
interests
through sub-regional preferential trading arrangements.
In the
event,
the role of APEC has evolved over the course of
successive annual ministerial
meetings, interspersed
with
meetings
of senior officials. The
inaugural
ministerial
meeting
in
Canberra,
APEC-I,
adopted
a 'functional
co-operation'
work
program
to be
managed by 'shepherds,'
senior officials from
designated
member
countries
(see
below). APEC-II,
which met in
Singapore
in
i990,
endorsed the initial work
program,
and called for an evaluation of
certain additional
project proposals.
There was
agreement
that no
new
organizational
structure would be established for the time
being.
It was
only
in
I991,
in
Seoul,
after three
years
of
consensus-building,
that the APEC-III ministerial
meeting
was able to issue the Seoul
Indonesia were
suspicious
of a wider
that
might
internationally.
On the
other,
Singapore
and the
Philippines,
in
par-
ticular,
were
eager
to
envisage
a more extensive
regional trading
APEC. In the
event,
the ASEAN
countries
agreed
to
participate
in APEC
subject
to their so-called
that it
have no
negotiating right,
and that it
pursue
no
regional agreements
beyond
Having
concurred in a
the ASEAN
gov-
ernments are
generally uneasy
about efforts to
strengthen
its institu-
policy
economies in the
region,
wary
of APEC
assuming
a
strong leadership
role in
policy
coordination,
lest this lead
to domination
by
their more
in
particular,
has been
aggrieved
at what it
perceives
to be the
failings
upholding
ests of
developing
in
North America and
warned it would
quit
neo-hegemonic
ing
governments
are
concerned,
APEC
information-sharing
activities,
aid
support
aimed at
strengthening
the
for eco-
nomic
analysis
and
policy
formulation.
manage
to sustain the
countries,
or whether
they
will be con-
managed
trade mechan-
isms to
promote
development
interests
In the
event,
with
meetings
inaugural
ministerial
meeting
in
Canberra,
APEC-I,
adopted
a 'functional
co-operation'
work
program
to be
designated
member
countries
(see
below). APEC-II,
which met in
Singapore
in
i990,
program,
certain additional
project proposals.
There was
agreement
that no
new
organizational
being.
It was
only
in
I991,
in
Seoul,
after three
years
of
consensus-building,
meeting
Indonesia were
suspicious
of a wider
that
might
internationally.
On the
other,
Singapore
and the
Philippines,
in
par-
ticular,
were
eager
to
envisage
a more extensive
regional trading
APEC. In the
event,
the ASEAN
countries
agreed
to
participate
in APEC
subject
to their so-called
that it
have no
negotiating right,
and that it
pursue
no
regional agreements
beyond
Having
concurred in a
the ASEAN
gov-
ernments are
generally uneasy
about efforts to
strengthen
its institu-
policy
economies in the
region,
wary
of APEC
assuming
a
strong leadership
role in
policy
coordination,
lest this lead
to domination
by
their more
in
particular,
has been
aggrieved
at what it
perceives
to be the
failings
upholding
ests of
developing
in
North America and
warned it would
quit
neo-hegemonic
ing
governments
are
concerned,
APEC
information-sharing
activities,
aid
support
aimed at
strengthening
the
for eco-
nomic
analysis
and
policy
formulation.
manage
to sustain the
countries,
or whether
they
will be con-
managed
trade mechan-
isms to
promote
development
interests
In the
event,
with
meetings
inaugural
ministerial
meeting
in
Canberra,
APEC-I,
adopted
a 'functional
co-operation'
work
program
to be
designated
member
countries
(see
below). APEC-II,
which met in
Singapore
in
i990,
program,
certain additional
project proposals.
There was
agreement
that no
new
organizational
being.
It was
only
in
I991,
in
Seoul,
after three
years
of
consensus-building,
meeting
413 413 413
Declaration on Asia
Pacific
Economic
Cooperation, setting
out the
formally
agreed objectives
of APEC:
*
To sustain the
growth
and
development
of the Asia Pacific
region
*
To enhance the
positive gains accruing
from
increasing
economic
inter-dependence
*
To
develop
and
strengthen
the
open
multilateral
trading system
*
To reduce barriers to trade in
goods
and services and investment
among participants,
in a manner consistent with the
principles
of the General
Agreement
on Tariffs and Trade
(GATT)
APEC
finally
received institutional form in
I992,
when the APEC-
IV ministerial
meeting
in
Bangkok approved
the establishment of a
small
permanent
Secretariat seated in
Singapore, along
with an
APEC Fund to
regularize
the
funding
for
programs
and activities.
The APEC Secretariat was
assigned responsibility
for the
provision
of
logistical
and technical
services,
and financial
management
for
APEC
sponsored
activities.
Staffing
is to include
professional
as well
as
support personnel,
under an Executive Director. The APEC Fund
is
fairly
modest in financial
magnitude,
with an initial
appropriation
of
just
US$i million from contributions
by
member
governments.
A
funding
formula based on
proportional
burden
sharing
based on relat-
ive Gross National Product was
accepted,
with a
ceiling
of i8%
(Japan, USA)
and a floor of
2.5% (Brunei, Indonesia,
Malaysia,
Philippines, Thailand).21
In
response
to an Australian
proposal,
APEC-IV also decided to
appoint
a so-called Eminent Persons
Group (EPG) charged
with for-
mulating
a vision for economic interaction across the Asia Pacific
region
to the
year
2000. The mandate of the
EPG,
discussed
below,
is indicative of the issues
arising
as
part
of the search for
community
of consensus on enhanced
regional
collaboration on economic and
trade issues.
Participating governments
nominated twelve
distingu-
ished individuals from
government,
business and
academia,
for this
exercise.22 The EPG
reported
in October
I993,
on the eve of the
21
The APEC Formula for Assessed Contributions is
provided
as Attachment i
to the 'Future
Steps
of
APEC,
Consolidated
Report
of the APEC Senior Officials in
the
4th
APEC Ministerial
Meeting,'
in Record
of
the Fourth Ministerial
Meeting of
Asia-
Pacific
Economic
Cooperation
(APEC), p.
i6o.
22
The
original Japanese appointee
to the
EPG,
Dr Saburo
Okita,
one of the
early
architects of Asia Pacific economic
cooperation, passed away
in
February I993,
and
so did not
participate
in work
leading up
to the landmark
report.
Declaration on Asia
Pacific
Economic
out the
formally
agreed objectives
of APEC:
*
To sustain the
growth
and
development
of the Asia Pacific
region
*
To enhance the
from
increasing
economic
inter-dependence
*
To
develop
and
strengthen
the
open
multilateral
trading system
*
goods
among participants,
principles
of the General
Agreement
(GATT)
APEC
finally
I992,
when the APEC-
IV ministerial
meeting
in
Bangkok approved
small
permanent
Singapore, along
with an
APEC Fund to
regularize
the
funding
for
programs
and activities.
for the
provision
of
logistical
and technical
services,
and financial
management
for
APEC
sponsored
activities.
Staffing
is to include
professional
as well
as
support personnel,
is
fairly
modest in financial
magnitude,
with an initial
appropriation
of
just
by
member
governments.
A
funding
formula based on
proportional
burden
sharing
based on relat-
accepted,
with a
ceiling
of i8%
(Japan, USA)
and a floor of
Malaysia,
In
response
to an Australian
proposal,
appoint
Group (EPG) charged
with for-
mulating
region
to the
year
EPG,
discussed
below,
arising
as
part
of the search for
community
regional
trade issues.
nominated twelve
distingu-
government,
business and
academia,
for this
exercise.22 The EPG
reported
in October
I993,
on the eve of the
21
provided
as Attachment i
to the 'Future
Steps
of
APEC,
Consolidated
Report
the
4th
APEC Ministerial
Meeting,'
in Record
of
Meeting of
Asia-
Pacific
Economic
Cooperation
(APEC), p.
i6o.
22
The
to the
EPG,
Dr Saburo
Okita,
one of the
early
in
February I993,
and
so did not
participate
in work
leading up
to the landmark
report.
Declaration on Asia
Pacific
Economic
out the
formally
agreed objectives
of APEC:
*
To sustain the
growth
and
development
of the Asia Pacific
region
*
To enhance the
from
increasing
economic
inter-dependence
*
To
develop
and
strengthen
the
open
multilateral
trading system
*
goods
among participants,
principles
of the General
Agreement
(GATT)
APEC
finally
I992,
when the APEC-
IV ministerial
meeting
in
Bangkok approved
small
permanent
Singapore, along
with an
APEC Fund to
regularize
the
funding
for
programs
and activities.
for the
provision
of
logistical
and technical
services,
and financial
management
for
APEC
sponsored
activities.
Staffing
is to include
professional
as well
as
support personnel,
is
fairly
modest in financial
magnitude,
with an initial
appropriation
of
just
by
member
governments.
A
funding
formula based on
proportional
burden
sharing
based on relat-
accepted,
with a
ceiling
of i8%
(Japan, USA)
and a floor of
Malaysia,
In
response
to an Australian
proposal,
appoint
Group (EPG) charged
with for-
mulating
region
to the
year
EPG,
discussed
below,
arising
as
part
of the search for
community
regional
trade issues.
nominated twelve
distingu-
government,
business and
academia,
for this
exercise.22 The EPG
reported
in October
I993,
on the eve of the
21
provided
as Attachment i
to the 'Future
Steps
of
APEC,
Consolidated
Report
the
4th
APEC Ministerial
Meeting,'
in Record
of
Meeting of
Asia-
Pacific
Economic
Cooperation
(APEC), p.
i6o.
22
The
to the
EPG,
Dr Saburo
Okita,
one of the
early
in
February I993,
and
so did not
participate
in work
leading up
to the landmark
report.
4I4 4I4 4I4
APEC-V ministerial and
Summit,
with A Vision
for
APEC. Towards
An Asia
Pacific
Economic
Community,
with
far-reaching
recommendations
aimed at
creating
a free trade in the Asia Pacific
region,
with a
target
date. The
goal
was the creation of 'a true Asia Pacific Economic
Community.'23
The
I993
APEC-V ministerial
meeting
was hosted
by
the United
States in
Seattle,
in Novembert
1993. Following
an American initiat-
ive,
APEC ministers
approved
a Trade and Investment Framework
expressing
their intention to reduce barriers to trade and investment
in a manner consistent with GATT
principles.
An APEC Trade and
Investment Committee was
established,
in
place
of the earlier ad hoc
Informal
Group
on
Regional
Trade
Liberalization,
and was
given
a
broad mandate to
explore
avenues for
improving
the flow of
goods,
services,
investment and
technology
across the
region.
For the first
time,
a Business Forum was
organized
with
corporate
executives from
all the APEC
economies,
to discuss APEC's
relationship
with the
private
sector
directly
with
participating
ministers.
In a bid to raise the
political profile
of
APEC,
President Clinton
convened a
'leadership
conference' of APEC heads of
government
immediately
after the APEC-V ministerial session. This first-ever
Asia Pacific summit was intended to
symbolize
a
resumption
of Amer-
ican
presidential leadership
in the Asia Pacific
arena,
while
focussing
high-level
attention onto the
priority
issues of economic
development
and trade liberalization.
Inevitably,
the
political
nuances of interna-
tional
summitry plunged
APEC into some unaccustomed
diplomatic
turbulence.
APEC
summitry posed
a
challenge
to the China
representation.
The
People's Republic
insisted that it alone could
rightfully
be
repres-
ented
by
a head of
government. Diplomatic
considerations dictated
that Taiwan and
Hong Kong
had to be satisfied with
representation
by
senior officials. ASEAN
countries,
for their
part,
were
greatly
divided over the summit.
Singapore,
the
Philippines
and Thailand
were
keen,
however Indonesia was
uneasy
about American
congres-
sional criticism of its human
rights
record and labour relations. Prime
Minister Mahathir of
Malaysia flatly
declined to attend.24
23
A Vision
for
APEC. Towards an Asia
Pacific
Economic
Community,
Report
of the
Eminent Persons
Group
to APEC Ministers
(C.
Fred
Bergsten, Chairman),
APEC
#
93-EP-oI,
October
i993,
p.
21.
24
Prime Minister Mahathir's refusal was
symptomatic
of the
posturing
and fric-
tions
afflicting
bilateral relations between
Malaysia
and the United States over recent
years.
These irritants in the
relationship
reflect
political
contentions more than eco-
Summit,
with A Vision
for
APEC. Towards
An Asia
Pacific
Economic
Community,
with
far-reaching
recommendations
aimed at
creating
region,
with a
target
date. The
goal
Community.'23
The
I993
APEC-V ministerial
meeting
was hosted
by
the United
States in
Seattle,
in Novembert
1993. Following
ive,
APEC ministers
approved
expressing
principles.
An APEC Trade and
established,
in
place
Informal
Group
on
Regional
Trade
Liberalization,
and was
given
a
broad mandate to
explore
avenues for
improving
the flow of
goods,
services,
investment and
technology
across the
region.
For the first
time,
organized
with
corporate
executives from
all the APEC
economies,
to discuss APEC's
relationship
with the
private
sector
directly
with
participating
ministers.
political profile
of
APEC,
President Clinton
convened a
'leadership
government
immediately
symbolize
a
resumption
of Amer-
ican
in the Asia Pacific
arena,
while
focussing
high-level
attention onto the
priority
issues of economic
development
Inevitably,
the
political
nuances of interna-
tional
summitry plunged
diplomatic
turbulence.
APEC
summitry posed
a
challenge
to the China
representation.
The
People's Republic
rightfully
be
repres-
ented
by
a head of
that Taiwan and
Hong Kong
representation
by
countries,
for their
part,
were
greatly
Singapore,
the
Philippines
and Thailand
were
keen,
uneasy
about American
congres-
rights
Malaysia flatly
23
A Vision
for
Pacific
Economic
Community,
Report
of the
Eminent Persons
Group
to APEC Ministers
(C.
Fred
APEC
#
93-EP-oI,
October
i993,
p.
21.
24
symptomatic
of the
posturing
and fric-
tions
afflicting
Malaysia
years.
relationship
reflect
political
Summit,
with A Vision
for
APEC. Towards
An Asia
Pacific
Economic
Community,
with
far-reaching
recommendations
aimed at
creating
region,
with a
target
date. The
goal
Community.'23
The
I993
APEC-V ministerial
meeting
was hosted
by
the United
States in
Seattle,
in Novembert
1993. Following
ive,
APEC ministers
approved
expressing
principles.
An APEC Trade and
established,
in
place
Informal
Group
on
Regional
Trade
Liberalization,
and was
given
a
broad mandate to
explore
avenues for
improving
the flow of
goods,
services,
investment and
technology
across the
region.
For the first
time,
organized
with
corporate
executives from
all the APEC
economies,
to discuss APEC's
relationship
with the
private
sector
directly
with
participating
ministers.
political profile
of
APEC,
President Clinton
convened a
'leadership
government
immediately
symbolize
a
resumption
of Amer-
ican
in the Asia Pacific
arena,
while
focussing
high-level
attention onto the
priority
issues of economic
development
Inevitably,
the
political
nuances of interna-
tional
summitry plunged
diplomatic
turbulence.
APEC
summitry posed
a
challenge
to the China
representation.
The
People's Republic
rightfully
be
repres-
ented
by
a head of
that Taiwan and
Hong Kong
representation
by
countries,
for their
part,
were
greatly
Singapore,
the
Philippines
and Thailand
were
keen,
uneasy
about American
congres-
rights
Malaysia flatly
23
A Vision
for
Pacific
Economic
Community,
Report
of the
Eminent Persons
Group
to APEC Ministers
(C.
Fred
APEC
#
93-EP-oI,
October
i993,
p.
21.
24
symptomatic
of the
posturing
and fric-
tions
afflicting
Malaysia
years.
relationship
reflect
political
415 415 415
This first Asia Pacific summit
gave political
momentum to the
APEC
concept
of
open regionalism,
but also accentuated the areas
of
strategic congruence
and
divergence
between its various
country
groupings.
There was broad
agreement
on the need to
display
Asia
Pacific
solidarity
and
unity
of
purpose
in favour of a common
approach
to trade liberalization at the
regional
and multilateral
levels.
Thus,
the leaders endorsed a reduction or elimination of tariffs
on a number of industrial and
agricultural products
as a
signal
-
and a
propellent
-
to the stalled GATT
negotiations.
That
being said,
no consensus was reached at the summit on the
future
goals
of APEC itself. The
grandiose
vision of an APEC eco-
nomic
community propounded by
the EPG was not
-
as
yet
-
shared
by
ASEAN
developing
countries and other Asian members
wary
of US ambitions in the
region. Instead,
the Asia Pacific leaders
came out with what was
styled
as a 'Vision
Statement,'
an ecumenical
agenda
that focussed more on
procedures
and
processes
for
regional
consensus-building
than on future aims. There was
agreement
on
means,
not of
ends,
with these means
being
treated almost as an end
in
themselves,
summarized
by Japanese foreign
minister Tsutomo
Hata as 'incremental
gradualism by
consensus.'
However,
the
polit-
nomic or trade
disputes.
Certain of these
may
be attributed to Dr Mahathir's vaunted
'Look East'
policy,
others stem from mutual
antagonism
over Middle Eastern and
Islamic issues. These
political
irritants were exacerbated
by
trade-related environ-
mental and health controversies over
palm oil,
tropical
timbers and latex
gloves,
regarded by many Malaysians
as a
conspiracy
on the
part
of the
West,
led
by
the
United
States,
to undermine their
export
markets: Vide 'Another
Slight. Malaysians
Angered by
US Move on Latex
Imports,'
(i July I993).
Goaded
by
these
grievances,
the
Malaysian government
became obsessed with con-
founding
and
provoking
the United States in an Asian
regional
context. This was
expressed
in the idiom of
Malaysia's antipathy
towards American assertiveness in
Asian economic
affairs,
notably
its
championing
an EAEG and EAEC that would
exclude the
US,
and
refusing
to
participate
in the
US-sponsored
APEC summit.
Another
expression
of this
pique may
be seen in
Malaysia's
first-ever
purchase
of
Russian-made
MIG-29 fighters
for its air
force,
along
with a far smaller number of
American-made
aircraft,
marking
a
politically daring
-
albeit
militarily
icono-
clastic
-
departure
in arms
procurement (Aviation
Week and
Space Technology, 5 July
I993).
Sometimes these
provocations
became
grotesque,
as when
Malaysia
refused
to allow the New York Philharmonic to
perform
the work Schelomo
('Solomon') by
the late
Jewish composer,
Ernest
Bloch, causing
cancellation of that orchestra's
scheduled visit. American
exasperation peaked
into
anger
over
Malaysia's sympath-
etic tilt towards
Iraq during
the
1990 Kuwait crisis and Gulf War.
Latterly Malaysia
decided to embark on
joint
economic ventures with
virulently
anti-Western Iran.
Sally Morphet
of the British
Foreign
and Commonwealth Office has written that
Malaysia
'seems to have taken over the role of the
non-aligned gadfly
. . .': 'The
Non-Aligned
in "The New World Order": The
Jakarta
Summit,
September, I992,'
International
Relations,
vol.
II,
no.
4 (April I993)
pp.
36I, 368.
gave political
momentum to the
APEC
concept
of
open regionalism,
of
and
divergence
between its various
country
groupings.
There was broad
agreement
on the need to
display
Asia
Pacific
solidarity
and
unity
of
purpose
approach
regional
and multilateral
levels.
Thus,
as a
signal
-
and a
propellent
-
to the stalled GATT
negotiations.
That
being said,
future
goals
of APEC itself. The
grandiose
nomic
the EPG was not
-
as
yet
-
shared
by
ASEAN
developing
wary
region. Instead,
styled
as a 'Vision
Statement,'
an ecumenical
agenda
procedures
and
processes
for
regional
consensus-building
agreement
on
means,
not of
ends,
with these means
being
in
themselves,
summarized
by Japanese foreign
minister Tsutomo
gradualism by
consensus.'
However,
the
polit-
nomic or trade
disputes.
Certain of these
may
'Look East'
policy,
antagonism
political
by
palm oil,
tropical
timbers and latex
gloves,
as a
conspiracy
on the
part
of the
West,
led
by
the
United
States,
to undermine their
export
Slight. Malaysians
Angered by
US Move on Latex
Imports,'
(i July I993).
Goaded
by
these
grievances,
the
founding
and
provoking
regional
context. This was
expressed
in the idiom of
Asian economic
affairs,
notably
its
championing
exclude the
US,
and
refusing
to
participate
in the
US-sponsored
APEC summit.
Another
expression
of this
pique may
be seen in
Malaysia's
first-ever
purchase
of
Russian-made
MIG-29 fighters
for its air
force,
along
American-made
aircraft,
marking
a
politically daring
-
albeit
militarily
icono-
clastic
-
departure
in arms
Week and
I993).
Sometimes these
provocations
became
grotesque,
as when
Malaysia
refused
perform
the work Schelomo
('Solomon') by
the late
Jewish composer,
Ernest
Bloch, causing
exasperation peaked
into
anger
over
Malaysia's sympath-
etic tilt towards
Iraq during
the
Latterly Malaysia
joint
virulently
anti-Western Iran.
Sally Morphet
of the British
Foreign
Malaysia
non-aligned gadfly
. . .': 'The
Non-Aligned
Jakarta
Summit,
September, I992,'
International
Relations,
vol.
II,
no.
4 (April I993)
pp.
36I, 368.
gave political
momentum to the
APEC
concept
of
open regionalism,
of
and
divergence
between its various
country
groupings.
There was broad
agreement
on the need to
display
Asia
Pacific
solidarity
and
unity
of
purpose
approach
regional
and multilateral
levels.
Thus,
as a
signal
-
and a
propellent
-
to the stalled GATT
negotiations.
That
being said,
future
goals
of APEC itself. The
grandiose
nomic
the EPG was not
-
as
yet
-
shared
by
ASEAN
developing
wary
region. Instead,
styled
as a 'Vision
Statement,'
an ecumenical
agenda
procedures
and
processes
for
regional
consensus-building
agreement
on
means,
not of
ends,
with these means
being
in
themselves,
summarized
by Japanese foreign
minister Tsutomo
gradualism by
consensus.'
However,
the
polit-
nomic or trade
disputes.
Certain of these
may
'Look East'
policy,
antagonism
political
by
palm oil,
tropical
timbers and latex
gloves,
as a
conspiracy
on the
part
of the
West,
led
by
the
United
States,
to undermine their
export
Slight. Malaysians
Angered by
US Move on Latex
Imports,'
(i July I993).
Goaded
by
these
grievances,
the
founding
and
provoking
regional
context. This was
expressed
in the idiom of
Asian economic
affairs,
notably
its
championing
exclude the
US,
and
refusing
to
participate
in the
US-sponsored
APEC summit.
Another
expression
of this
pique may
be seen in
Malaysia's
first-ever
purchase
of
Russian-made
MIG-29 fighters
for its air
force,
along
American-made
aircraft,
marking
a
politically daring
-
albeit
militarily
icono-
clastic
-
departure
in arms
Week and
I993).
Sometimes these
provocations
became
grotesque,
as when
Malaysia
refused
perform
the work Schelomo
('Solomon') by
the late
Jewish composer,
Ernest
Bloch, causing
exasperation peaked
into
anger
over
Malaysia's sympath-
etic tilt towards
Iraq during
the
Latterly Malaysia
joint
virulently
anti-Western Iran.
Sally Morphet
of the British
Foreign
Malaysia
non-aligned gadfly
. . .': 'The
Non-Aligned
Jakarta
Summit,
September, I992,'
International
Relations,
vol.
II,
no.
4 (April I993)
pp.
36I, 368.
416 416 416
ical
symbolism
of the summit was not to be
mistaken,
since the meet-
ing
itself
conveyed
the
message
of 'a new voice for the Asia Pacific
in world affairs.'
A second Asia Pacific summit is to be held in
1994,
on the occasion
the APEC-VI
meeting
scheduled for
Jakarta.
The
Geographic Composition of
APEC
Like the
question
of its
role,
the
question
of APEC's
geographic
boundaries has been
subject
to
contention,
even
controversy.
Aus-
tralia's invitations to attend the first APEC ministerial
meeting
in
Canberra were extended to
Japan,
South
Korea,
the ASEAN coun-
tries,
and New Zealand. The United
States,
not
initially included,
made known its desire to
participate
and was invited. Canada dis-
patched
its
outspoken
trade minister to
key capitals
in order to elicit
an invitation. None of the small Pacific island states were included
originally, though Papua
New Guinea has since become a
likely
can-
didate for
membership.
Arguably
the most delicate
diplomatic question
before APEC
related to the
participation
of
China, Taiwan,
and
Hong Kong.
Although
all three ranked
among
the
important trading
economies
in the Asia Pacific
region,
their formal affiliation with APEC had to
be held
up initially pending
a resolution of a
diplomatic imbroglio
regarding
two
governments claiming
to
represent
'China',
plus
a Brit-
ish crown
colony
soon to be
reintegrated
into the
Peoples Republic
of China albeit with
special
administrative status. This China
quan-
dary
was resolved at
APEC-III,
at least as
regards
economic and
trade matters. A formula was
adopted enabling separate participation
in APEC on the
part
of the
Peoples Republic
of
China,
'Chinese
Taipei' (i.e.
the
Republic
of China on
Taiwan)
and
Hong Kong.25
Nevertheless,
Chinese
political
sensibilities were aroused
by
President
Clinton's
proposal
of an APEC
summit,
which had
unwitting
effect of
resurrecting
the latent and still unresolved
national-representational
question.
It is
perhaps
inevitable that
political
considerations would
25
China
subsequently
claimed that the
agreement
on
Hong Kong
and Chinese
Taipei (Taiwan) participation
in APEC excluded them from
actually hosting
APEC
or APEC
Working Group
activities. This
claim,
first
put
forward at the Honolulu
meeting
of the Education
Forum,
which took
place
in
May I993
under the
auspices
of the APEC Human Resource
Development Working Group,
was deferred to the
senior officials or ministerial levels.
ical
symbolism
mistaken,
since the meet-
ing
itself
conveyed
the
message
in world affairs.'
1994,
on the occasion
the APEC-VI
meeting
scheduled for
Jakarta.
The
APEC
Like the
question
of its
role,
the
question
of APEC's
geographic
boundaries has been
subject
to
contention,
even
controversy.
Aus-
meeting
in
Japan,
South
Korea,
the ASEAN coun-
tries,
States,
not
initially included,
participate
patched
its
outspoken
trade minister to
key capitals
in order to elicit
likely
can-
didate for
membership.
Arguably
the most delicate
diplomatic question
before APEC
related to the
participation
of
China, Taiwan,
and
Hong Kong.
Although
all three ranked
among
the
important trading
economies
in the Asia Pacific
region,
be held
a resolution of a
regarding
two
to
represent
'China',
plus
a Brit-
ish crown
colony
soon to be
reintegrated
into the
Peoples Republic
special
quan-
dary
was resolved at
APEC-III,
at least as
regards
economic and
in APEC on the
part
of the
Peoples Republic
of
China,
'Chinese
Taipei' (i.e.
the
Republic
of China on
Taiwan)
and
Hong Kong.25
Nevertheless,
Chinese
political
by
President
Clinton's
proposal
of an APEC
summit,
which had
unwitting
effect of
resurrecting
question.
It is
perhaps
inevitable that
political
25
China
subsequently
claimed that the
agreement
on
Hong Kong
and Chinese
actually hosting
APEC
or APEC
Working Group
activities. This
claim,
first
put
meeting
of the Education
Forum,
which took
place
in
May I993
under the
auspices
was deferred to the
ical
symbolism
mistaken,
since the meet-
ing
itself
conveyed
the
message
in world affairs.'
1994,
on the occasion
the APEC-VI
meeting
scheduled for
Jakarta.
The
APEC
Like the
question
of its
role,
the
question
of APEC's
geographic
boundaries has been
subject
to
contention,
even
controversy.
Aus-
meeting
in
Japan,
South
Korea,
the ASEAN coun-
tries,
States,
not
initially included,
participate
patched
its
outspoken
trade minister to
key capitals
in order to elicit
likely
can-
didate for
membership.
Arguably
the most delicate
diplomatic question
before APEC
related to the
participation
of
China, Taiwan,
and
Hong Kong.
Although
all three ranked
among
the
important trading
economies
in the Asia Pacific
region,
be held
a resolution of a
regarding
two
to
represent
'China',
plus
a Brit-
ish crown
colony
soon to be
reintegrated
into the
Peoples Republic
special
quan-
dary
was resolved at
APEC-III,
at least as
regards
economic and
in APEC on the
part
of the
Peoples Republic
of
China,
'Chinese
Taipei' (i.e.
the
Republic
of China on
Taiwan)
and
Hong Kong.25
Nevertheless,
Chinese
political
by
President
Clinton's
proposal
of an APEC
summit,
which had
unwitting
effect of
resurrecting
question.
It is
perhaps
inevitable that
political
25
China
subsequently
claimed that the
agreement
on
Hong Kong
and Chinese
actually hosting
APEC
or APEC
Working Group
activities. This
claim,
first
put
meeting
of the Education
Forum,
which took
place
in
May I993
under the
auspices
was deferred to the
417 417 417
assert themselves from time to
time,
injecting
some of the tensions of
international relations into the
carefully
structured architecture of
APEC
diplomacy.
The
European Community (EC),
which considered itself a
signi-
ficant stakeholder in Asia Pacific economic
affairs,
was refused an
invitation. The exclusion of
Europe signalled
APEC
coming
into its
own as a mature and
self-sustaining regional
economic framework.
Be that as it
may,
the
rejection
caused the EC considerable
consternation.26
Some countries were
deliberately
excluded
despite
their
geographic
placement
as
part
of the Asia Pacific
region.
The Soviet
Union,
North
Korea,
the Indochina states and
Mongolia
remained
uninvited,
pre-
sumably
because
they
had never been
party
to the wider
regional
and international
trading system.
A somewhat more vexatious
predicament
confronted the Latin
American countries
bordering
on the Pacific littoral.
Japan
and Korea
are inclined to include the more outward oriented Latin American
economies within the APEC
grouping,
since this could also
help
offset
any hemispheric
tendencies towards
exclusionary trading arrange-
ments.
Conversely,
the ASEAN countries were
generally
reluctant to
countenance a
competing
Latin American
developing country pres-
ence in APEC fora.27
Initial Latin American
attempts
to
gain
observer status at APEC-
III were rebuffed. The
subsequent
Mexican
application
for member-
ship
was deferred
by APEC-IV,
notwithstanding
Mexico's
signing
the North American Free Trade
Agreement (NAFTA)
with Canada
and the United
States,
both of whom were
already
members of APEC.
APEC-V admitted Mexico and Chile
(with
effect from next
year),
as
a
diplomatic quid pro quo
for
admitting Papua
New
Guinea,
which
Australia and the ASEAN countries
sought.
At the same time it was
decided that APEC
requires
more time to consolidate before enter-
taining any
further additions to the
group.
The Structure
of
Asia
Pacific
Economic
Cooperation
The APEC
agenda
that
crystallized
over the formative
phase
of
regional cooperation
thus
emphasized
three
priority
issue-areas of
26
See Martin
Rudner, 'European Community Development
Assistance to Asia:
Policies,
Programs
and
Performance,' Modern Asian Studies
(February 1992),
p.
29.
27
Martin
Rudner, 'ASEAN,
Cooperation,
and Hemi-
spheric
Free Trade for the
Americas,' esp. pp. 136-40, I44.
time,
injecting
carefully
APEC
diplomacy.
The
signi-
affairs,
was refused an
Europe signalled
APEC
coming
into its
own as a mature and
economic framework.
Be that as it
may,
the
rejection
consternation.26
Some countries were
deliberately
excluded
despite
their
geographic
placement
as
part
of the Asia Pacific
region.
The Soviet
Union,
North
Korea,
Mongolia
remained
uninvited,
pre-
sumably
because
they
had never been
party
to the wider
regional
and international
trading system.
predicament
American countries
bordering
Japan
and Korea
grouping,
help
offset
any hemispheric
tendencies towards
ments.
Conversely,
generally
reluctant to
countenance a
competing
Latin American
attempts
to
gain
subsequent
Mexican
application
for member-
ship
was deferred
by APEC-IV,
notwithstanding
Mexico's
signing
Agreement (NAFTA)
with Canada
and the United
States,
both of whom were
already
members of APEC.
(with
effect from next
year),
as
a
for
admitting Papua
New
Guinea,
which
sought.
decided that APEC
requires
taining any
group.
The Structure
of
Asia
Pacific
Economic
Cooperation
The APEC
agenda
that
crystallized
over the formative
phase
of
thus
emphasized
three
priority
issue-areas of
26
See Martin
Assistance to Asia:
Policies,
Programs
and
(February 1992),
p.
29.
27
Martin
Rudner, 'ASEAN,
Cooperation,
and Hemi-
spheric
Free Trade for the
time,
injecting
carefully
APEC
diplomacy.
The
signi-
affairs,
was refused an
Europe signalled
APEC
coming
into its
own as a mature and
economic framework.
Be that as it
may,
the
rejection
consternation.26
Some countries were
deliberately
excluded
despite
their
geographic
placement
as
part
of the Asia Pacific
region.
The Soviet
Union,
North
Korea,
Mongolia
remained
uninvited,
pre-
sumably
because
they
had never been
party
to the wider
regional
and international
trading system.
predicament
American countries
bordering
Japan
and Korea
grouping,
help
offset
any hemispheric
tendencies towards
ments.
Conversely,
generally
reluctant to
countenance a
competing
Latin American
attempts
to
gain
subsequent
Mexican
application
for member-
ship
was deferred
by APEC-IV,
notwithstanding
Mexico's
signing
Agreement (NAFTA)
with Canada
and the United
States,
both of whom were
already
members of APEC.
(with
effect from next
year),
as
a
for
admitting Papua
New
Guinea,
which
sought.
decided that APEC
requires
taining any
group.
The Structure
of
Asia
Pacific
Economic
Cooperation
The APEC
agenda
that
crystallized
over the formative
phase
of
thus
emphasized
three
priority
issue-areas of
26
See Martin
Assistance to Asia:
Policies,
Programs
and
(February 1992),
p.
29.
27
Martin
Rudner, 'ASEAN,
Cooperation,
and Hemi-
spheric
Free Trade for the
4I8 4I8 4I8
common concern to
participating governments, notably (a)
the need
to
galvanize support
for a successful
completion
of the
Uruguay
Round of Multilateral Trade
Negotiations,
in order to
strengthen
the
international
trading system; (b)
the
importance
of
coordinating
efforts to assess the
prospects
for,
and obstacles
to,
increased trade
and investment flows within the Asia Pacific
region;
and
(c)
the iden-
tification of
practical
matters that call for
joint
activities in the
common economic interest. To
give operational expression
to this
high-level agenda, subsequent meetings
of senior officials
proceeded
to devise a work
program involving inter-governmental
collaboration
on
topics
of common
regional
concern. In
addition,
a
special meeting
of senior officials from
participating
countries met in Vancouver in
December
I990,
to discuss the
progress
of the
Uruguay
Round. Other
ad hoc
working groups
of officials were
subsequently
set
up
to
provide
policy input
on
timely
issues.
At the first APEC ministerial
meeting
the more advanced industri-
alized countries wanted to have the APEC work
program
concentrate
on trade and economic
policy issues; however,
the ASEAN
particip-
ants insisted that the APEC
working agenda
include human resource
development
and
technology
transfer as well.
Following
an APEC
Senior Officials
Meeting
in
Singapore
in
I990,
a work
program
com-
posed
of seven
projects
was considered and
adopted by
APEC-II.
This work
program
was structured around the formation of inter-
governmental Working Groups,
each one
dealing
with a
particular
project:
Regional
Economic
Trends,
Trade and Investment
Data,
Trade Liberalization
Information,
Trade
Promotion,
Investment and
Technology Transfer,
Multilateral Human Resource
Development,
Regional Energy Conservation,
Marine Resource
Conservation,
and
Telecommunications. Ministerial discussions also raised the
question
of additional work
projects
on
fisheries,
transportation,
and
tourism,
and these were referred to officials for assessment. The definitive work
program approved
at APEC-IV consisted of ten
Working Groups (see
Table
3).
Each Work
Project
was
assigned 'shepherds'
from countries
demonstrating
a
leading
interest in the issue area concerned.
Apart
from
officials,
the
Working Groups
were also to involve
representat-
ives from the
private
sector and academia as
appropriate.
As well as the
Working Groups
established under its work
program,
APEC has also set
up
two ad hoc
Working Groups charged
with fur-
nishing policy input
on
timely questions
to APEC ministerial and
official
meetings.
One ad hoc
group
is
addressing
Economic Trends
and
Issues,
shepherded by Canada,
and is
currently preparing
a
common concern to
the need
to
galvanize support
for a successful
completion
of the
Uruguay
Negotiations,
in order to
strengthen
the
international
trading system; (b)
the
importance
of
coordinating
prospects
for,
and obstacles
to,
increased trade
region;
and
(c)
the iden-
tification of
practical
joint
activities in the
to this
of senior officials
proceeded
to devise a work
collaboration
on
topics
of common
regional
concern. In
addition,
a
special meeting
participating
December
I990,
to discuss the
progress
of the
Uruguay
Round. Other
ad hoc
working groups
of officials were
subsequently
set
up
to
provide
policy input
on
timely
issues.
meeting
program
concentrate
the ASEAN
particip-
working agenda
development
and
technology
transfer as well.
Following
an APEC
Senior Officials
Meeting
in
Singapore
in
I990,
a work
program
com-
posed
of seven
projects
was considered and
adopted by
APEC-II.
This work
program
each one
dealing
with a
particular
project:
Regional
Economic
Trends,
Data,
Information,
Trade
Promotion,
Investment and
Development,
Marine Resource
Conservation,
and
question
of additional work
projects
on
fisheries,
transportation,
and
tourism,
program approved
Working Groups (see
Table
3).
Each Work
Project
was
from countries
demonstrating
a
leading
Apart
from
officials,
the
Working Groups
representat-
ives from the
private
appropriate.
As well as the
Working Groups
program,
APEC has also set
up
two ad hoc
with fur-
on
timely questions
official
meetings.
One ad hoc
group
is
addressing
Economic Trends
and
Issues,
and is
currently preparing
a
common concern to
the need
to
galvanize support
for a successful
completion
of the
Uruguay
Negotiations,
in order to
strengthen
the
international
trading system; (b)
the
importance
of
coordinating
prospects
for,
and obstacles
to,
increased trade
region;
and
(c)
the iden-
tification of
practical
joint
activities in the
to this
of senior officials
proceeded
to devise a work
collaboration
on
topics
of common
regional
concern. In
addition,
a
special meeting
participating
December
I990,
to discuss the
progress
of the
Uruguay
Round. Other
ad hoc
working groups
of officials were
subsequently
set
up
to
provide
policy input
on
timely
issues.
meeting
program
concentrate
the ASEAN
particip-
working agenda
development
and
technology
transfer as well.
Following
an APEC
Senior Officials
Meeting
in
Singapore
in
I990,
a work
program
com-
posed
of seven
projects
was considered and
adopted by
APEC-II.
This work
program
each one
dealing
with a
particular
project:
Regional
Economic
Trends,
Data,
Information,
Trade
Promotion,
Investment and
Development,
Marine Resource
Conservation,
and
question
of additional work
projects
on
fisheries,
transportation,
and
tourism,
program approved
Working Groups (see
Table
3).
Each Work
Project
was
from countries
demonstrating
a
leading
Apart
from
officials,
the
Working Groups
representat-
ives from the
private
appropriate.
As well as the
Working Groups
program,
APEC has also set
up
two ad hoc
with fur-
on
timely questions
official
meetings.
One ad hoc
group
is
addressing
Economic Trends
and
Issues,
and is
currently preparing
a
419 419 419
MARTIN RUDNER
TABLE
3
APEC
Working
Groups
MARTIN RUDNER
TABLE
3
APEC
Working
Groups
MARTIN RUDNER
TABLE
3
APEC
Working
Groups
Working Group Working Group Working Group
Review of Trade and Investment Data
Trade
promotion: Programs
and Mechanisms
for
Cooperation
Expansion
of Investment and
Technology
Transfer
Human Resources
Development
- Network on Economic
Development
Management
- Network on Business
Management
- Network on Industrial
Technology
Regional Energy Cooperation
Telecommunications
Marine Resource Conservation
Fisheries
Transportation
Tourism
Ad Hoc
Groups
Trade
promotion: Programs
and Mechanisms
for
Cooperation
Expansion
of Investment and
Technology
Transfer
Human Resources
Development
Development
Management
Management
Technology
Telecommunications
Fisheries
Transportation
Tourism
Ad Hoc
Groups
Trade
promotion: Programs
and Mechanisms
for
Cooperation
Expansion
of Investment and
Technology
Transfer
Human Resources
Development
Development
Management
Management
Technology
Telecommunications
Fisheries
Transportation
Tourism
Ad Hoc
Groups
Economic Trends and Issues
Informal
Group
on Trade Liberalization
Informal
Group
Informal
Group
'Shepherds' 'Shepherds' 'Shepherds'
Japan, Singapore,
United States
Korea, Malaysia
Indonesia,
Japan,
the
Philippines
Canada,
Indonesia,
Japan,
Korea,
Thailand
Korea
(Coordinator)
Canada
(Coordinator)
Australia
(Coordinator)
Australia
United States
Canada, Indonesia,
New Zealand
Japan,
New
Zealand,
Thailand
United States
United States
'Shepherds'
Japan, Singapore,
United States
Korea, Malaysia
Indonesia,
Japan,
the
Philippines
Canada,
Indonesia,
Japan,
Korea,
Thailand
Korea
(Coordinator)
Canada
(Coordinator)
Australia
(Coordinator)
Australia
United States
Canada, Indonesia,
New Zealand
Japan,
New
Zealand,
Thailand
United States
United States
'Shepherds'
Japan, Singapore,
United States
Korea, Malaysia
Indonesia,
Japan,
the
Philippines
Canada,
Indonesia,
Japan,
Korea,
Thailand
Korea
(Coordinator)
Canada
(Coordinator)
Australia
(Coordinator)
Australia
United States
Canada, Indonesia,
New Zealand
Japan,
New
Zealand,
Thailand
United States
United States
'Shepherds'
Canada
Australia
Canada
Australia
Canada
Australia
review of the short-to-medium term economic outlook for countries
of the
region
and a
study
of investment flows in the Asia Pacific area
for the
I993
APEC ministerial
meeting.
The
other,
an informal
group
on trade
liberalization,
shepherded by Australia,
is
undertaking
a
number of studies of investment
regulations,
customs
procedures,
market access
issues,
and an electronic tariff database. This informal
arrangement
was
subsequently superseded by
APEC Trade and
Investment Committee set
up by
APEC-V with a broad mandate to
consider
ways
and means of further
liberalizing
flows in the
region.
The
inaugural i990 meeting
of the Asia Pacific Multilateral
Human Resource
Development
Initiative,
as this Work
Project
is
styled,
identified three issues of
strategic significance
for
regional
action or
cooperation. Special
'networks' were established to
exchange
information and consider
policy options relating
to these
issues,
including
a Network on Economic
Development Management,
coordinated
by Korea;
a Network on Business
Management,
coordin-
of the
region
and a
study
for the
I993
APEC ministerial
meeting.
The
other,
an informal
group
on trade
liberalization,
is
undertaking
a
regulations,
customs
procedures,
market access
issues,
arrangement
was
APEC Trade and
up by
consider
ways
liberalizing
flows in the
region.
The
Human Resource
Development
Initiative,
as this Work
Project
is
styled,
for
regional
action or
exchange
to these
issues,
including
coordinated
by Korea;
Management,
coordin-
of the
region
and a
study
for the
I993
APEC ministerial
meeting.
The
other,
an informal
group
on trade
liberalization,
is
undertaking
a
regulations,
customs
procedures,
market access
issues,
arrangement
was
APEC Trade and
up by
consider
ways
liberalizing
flows in the
region.
The
Human Resource
Development
Initiative,
as this Work
Project
is
styled,
for
regional
action or
exchange
to these
issues,
including
coordinated
by Korea;
Management,
coordin-
420 420 420
ated
by Japan;
and a Network on Industrial
Technology,
coordinated
by
Australia. Each of these networks
encompassed
'national lead
institutes' in each
participating country,
which were
assigned
responsibility
for information
gathering
and
dissemination,
and for
mobilizing
local
capabilities
for
project
activities in that
particular
area of human resource
development.
The
Agenda for
Asia
Pacific
Economic
Cooperation
The
objectives
of
APEC,
as stated in the Seoul Declaration issued at
the APEC-III Ministerial
Meeting
in
i99I,
emphasize
a 'focus on
economic areas where there is
scope
to advance common interests
and achieve mutual
benefits,
including through exchange
of informa-
tion and consultation on
policies
and
developments
relevant to the
common efforts of APEC economies to sustain
growth, promote
adjustment
and reduce economic
disparities.'
APEC is
virtually
unique among
international economic
groupings
in that it involves
participating
countries at different levels of economic
development,
all
sharing
a
principled predilection
for
open-ness
in international
economic relations and an aversion to
protectionism. Certainly,
the
conceptual imperative
behind APEC has derived from the commit-
ment of
participating
countries to
consultation,
information
exchange,
and collaborative efforts towards
regional
economic
cooperation.
Much of the work in
defining
the future role and
agenda
of APEC
has been
vested,
in
effect,
in two ad hoc
working groups
of senior
officials,
one devoted to
identifying
affecting
the
region
as a
whole,
and the other to
Regional
Trade
Liberalization.
The ad hoc
Group
on Economic Trends and Issues was intended
to
help
achieve a better
understanding
of economic conditions and
developments
in countries of the
region,
as a means of
enhancing
the
prospects
for
dialogue
and
cooperation. Participants
in the
group
included senior officials from
Australia, Brunei,
Canada
('Shepherd'),
China, Indonesia,
Japan, Korea, Malaysia,
New
Zealand,
Singapore,
Taiwan,
Thailand and the United States. Korea
prepared
a
report
on 'APEC Economies: Recent
Developments
and
Outlook,'
summarizing
available data and
offering projections
on future trends.28 At the same
28
APEC Economies: Recent
Developments
and
Outlook,
Appendix
II to the Ad Hoc
Economic
Group Report
to
Ministers,
Record
of
Meeting of
Asia-
Pacific
Economic
Cooperation (APEC), pp.
50-7.
ated
by Japan;
Technology,
coordinated
by
encompassed
'national lead
institutes' in each
which were
assigned
responsibility
for information
gathering
and
dissemination,
and for
mobilizing
local
capabilities
for
project
activities in that
particular
development.
The
Agenda for
Asia
Pacific
Economic
Cooperation
The
objectives
of
APEC,
Meeting
in
i99I,
emphasize
a 'focus on
scope
and achieve mutual
benefits,
of informa-
policies
and
developments
relevant to the
growth, promote
adjustment
and reduce economic
disparities.'
APEC is
virtually
unique among
groupings
in that it involves
participating
development,
all
sharing
a
for
open-ness
in international
the
ment of
participating
countries to
consultation,
information
exchange,
regional
economic
cooperation.
Much of the work in
defining
the future role and
agenda
of APEC
has been
vested,
in
effect,
in two ad hoc
working groups
of senior
officials,
one devoted to
identifying
affecting
the
region
as a
whole,
and the other to
Regional
Trade
Liberalization.
The ad hoc
Group
to
help
achieve a better
understanding
developments
in countries of the
region,
as a means of
enhancing
the
prospects
for
dialogue
and
in the
group
Australia, Brunei,
Canada
('Shepherd'),
China, Indonesia,
New
Zealand,
Singapore,
Taiwan,
prepared
a
report
Developments
and
Outlook,'
summarizing
available data and
28
Developments
and
Outlook,
Appendix
II to the Ad Hoc
Economic
Group Report
to
Ministers,
Record
of
Meeting of
Asia-
Pacific
Economic
50-7.
ated
by Japan;
Technology,
coordinated
by
encompassed
'national lead
institutes' in each
which were
assigned
responsibility
for information
gathering
and
dissemination,
and for
mobilizing
local
capabilities
for
project
activities in that
particular
development.
The
Agenda for
Asia
Pacific
Economic
Cooperation
The
objectives
of
APEC,
Meeting
in
i99I,
emphasize
a 'focus on
scope
and achieve mutual
benefits,
of informa-
policies
and
developments
relevant to the
growth, promote
adjustment
and reduce economic
disparities.'
APEC is
virtually
unique among
groupings
in that it involves
participating
development,
all
sharing
a
for
open-ness
in international
the
ment of
participating
countries to
consultation,
information
exchange,
regional
economic
cooperation.
Much of the work in
defining
the future role and
agenda
of APEC
has been
vested,
in
effect,
in two ad hoc
working groups
of senior
officials,
one devoted to
identifying
affecting
the
region
as a
whole,
and the other to
Regional
Trade
Liberalization.
The ad hoc
Group
to
help
achieve a better
understanding
developments
in countries of the
region,
as a means of
enhancing
the
prospects
for
dialogue
and
in the
group
Australia, Brunei,
Canada
('Shepherd'),
China, Indonesia,
New
Zealand,
Singapore,
Taiwan,
prepared
a
report
Developments
and
Outlook,'
summarizing
available data and
28
Developments
and
Outlook,
Appendix
II to the Ad Hoc
Economic
Group Report
to
Ministers,
Record
of
Meeting of
Asia-
Pacific
Economic
50-7.
42
I
42
I
42
I
time,
Japan
undertook a
study
of economic and trade
linkages among
APEC
economies,
and included a future vision of the Asia Pacific
Region
in the
year
2000.29 These documents were tabled for discus-
sion at the ad hoc
Group meeting
in
Tokyo
in
August, I992,
and
were
subsequently presented
to the APEC-IV Ministerial
meeting
in
Bangkok
later that same
year.
The
Japanese study
called attention to
prospective challenges
and
difficulties that could constrain the
growth
of APEC economies over
the
long
run. In order to ensure that the
region
would sustain its
economic
growth performance
in face of these
challenges
and diffi-
culties,
nine
policy
'tasks' were identified for solution at the APEC
level.30 These nine tasks included:
*
Maintenance and
strengthening
of the multilateral
trading system
*
Trade
expansion, through
continued trade liberalization and
open-ness
*
Freer flow of
managerial
resources and
capital
*
Nurturing
of
supporting
industries
*
Human resource
development
for skills enhancement
*
Improvement
and
upgrading
of industrial infrastructure
*
Harmonization of standards and statistics
*
Promotion of
policy dialogue
*
Expansion
of trans-Pacific trade
At the
Tokyo meeting
of the ad hoc
Group
the absence was noted
of a
consistent,
timely
and reliable statistical database for the APEC
region. Agreement
was reached on
introducing
a
regular exchange
of
economic statistics
among
APEC countries. Australia undertook to
coordinate and circulate these
data,
with the
expectation
that the
responsibility
will devolve
upon
the APEC
Secretariat,
in due course.
Other issue-areas identified for future
study
include the need for
human resource
development
and labour
mobility;
the
promotion
of
technology transfer,
particularly
from multinational
enterprises
to
domestic
producers;
the
protection
of intellectual
property
and direct
foreign investment;
barriers to
agricultural
trade in the
region;
struc-
tural
adjustments
to correct
imbalances;
harmonization of environ-
mental
management
and economic
development; balancing exports
and domestic demand in
promoting growth;
and the
regulatory
29
Vision
for
the
Economy of
the
Asia-Pacific Region
in the Year 2000 and the Tasks
Ahead,
APEC Ad Hoc Economic
Group Meeting,
IO-I i
August I992, Tokyo, Japan.
30
Vision
for
the
Economy of
the
Asia-Pacific
Region
Ahead,
PP. 34-7.
time,
Japan
undertook a
study
linkages among
APEC
economies,
Region
in the
year
sion at the ad hoc
Group meeting
in
Tokyo
in
August, I992,
and
were
meeting
in
Bangkok
later that same
year.
The
Japanese study
called attention to
and
growth
the
long
region
would sustain its
economic
growth performance
in face of these
challenges
and diffi-
culties,
nine
policy
*
Maintenance and
strengthening
of the multilateral
trading system
*
Trade
expansion, through
open-ness
*
Freer flow of
managerial
resources and
capital
*
Nurturing
of
supporting
industries
*
Human resource
development
*
Improvement
and
upgrading
*
*
Promotion of
policy dialogue
*
Expansion
At the
Tokyo meeting
of the ad hoc
Group
of a
consistent,
timely
region. Agreement
was reached on
introducing
a
regular exchange
of
economic statistics
among
data,
with the
expectation
that the
responsibility
will devolve
upon
the APEC
Secretariat,
in due course.
study
human resource
development
and labour
mobility;
the
promotion
of
particularly
from multinational
enterprises
to
domestic
producers;
the
protection
of intellectual
property
and direct
foreign investment;
barriers to
agricultural
trade in the
region;
struc-
tural
adjustments
to correct
imbalances;
mental
management
and economic
promoting growth;
and the
regulatory
29
Vision
for
the
Economy of
the
Asia-Pacific Region
Ahead,
Group Meeting,
IO-I i
30
Vision
for
the
Economy of
the
Asia-Pacific
Region
Ahead,
PP. 34-7.
time,
Japan
undertook a
study
linkages among
APEC
economies,
Region
in the
year
sion at the ad hoc
Group meeting
in
Tokyo
in
August, I992,
and
were
meeting
in
Bangkok
later that same
year.
The
Japanese study
called attention to
and
growth
the
long
region
would sustain its
economic
growth performance
in face of these
challenges
and diffi-
culties,
nine
policy
*
Maintenance and
strengthening
of the multilateral
trading system
*
Trade
expansion, through
open-ness
*
Freer flow of
managerial
resources and
capital
*
Nurturing
of
supporting
industries
*
Human resource
development
*
Improvement
and
upgrading
*
*
Promotion of
policy dialogue
*
Expansion
At the
Tokyo meeting
of the ad hoc
Group
of a
consistent,
timely
region. Agreement
was reached on
introducing
a
regular exchange
of
economic statistics
among
data,
with the
expectation
that the
responsibility
will devolve
upon
the APEC
Secretariat,
in due course.
study
human resource
development
and labour
mobility;
the
promotion
of
particularly
from multinational
enterprises
to
domestic
producers;
the
protection
of intellectual
property
and direct
foreign investment;
barriers to
agricultural
trade in the
region;
struc-
tural
adjustments
to correct
imbalances;
mental
management
and economic
promoting growth;
and the
regulatory
29
Vision
for
the
Economy of
the
Asia-Pacific Region
Ahead,
Group Meeting,
IO-I i
30
Vision
for
the
Economy of
the
Asia-Pacific
Region
Ahead,
PP. 34-7.
422 422 422
regimes applicable
to domestic
services,
including
distribution
systems.
A second ad hoc
group,
the Informal
Group
on
Regional
Trade
Liberalization
(RTL)
was established to evaluate the
impact
of trade
and trade
policy developments
in the
region
in the context of the
Uruguay Round,
and to consider various
approaches
to
regional
trade
liberalization. The RTL
Group
reiterated the APEC commitment to
a
timely
and successful conclusion of the
Uruguay
Round of Multilat-
eral Trade
Negotiations,
and
agreed
in the meantime to
proceed
with
a set of initiatives intended to
pave
the
way
to a more liberal
trading
and investment
regime
for the
region. Projects approved
to date
include a
viability study
for a
proposed
electronic tariff data base
designed
to disseminate detailed and
timely
tariff information
among
participating countries;
a
survey
of
regional
tariff
policies; preparation
of an APEC customs
guide;
and
publication
of an Investment
Regula-
tions Guidebook for the countries of the APEC
region.
The RTL also endorsed an Australian
proposal
for the
setting up
of the Eminent Persons
Group
to formulate a future vision of eco-
nomic
trends, evolving
trade
patterns,
and
policy options
for
enhanced
regional
economic
cooperation.
This recommendation for
an EPG was
adopted by
the Ministerial
meeting
at APEC-IV. The
EPG was invited to assess the
likely shape
of trade and economic
relations in the Asia Pacific
region
to the
year 2000; identify policy
options
for
advancing
APEC
regional development
through
strengthened trade,
investment and other economic
linkages;
indicate
what
impediments
and issues should be addressed
by
the inter-
governmental community
so as to advance the
dynamism
of trade
and investment in the APEC
region;
and formulate
regional priority
concerns for future multilateral trade
negotiations.
Implementing
the APEC Work
Program
By
the end of
1992,
all of APEC's
Working Groups
were
functioning.
Much of the
activity
involved
meetings,
and coordination efforts
among
bureaucrats of
participating
countries went some
way
to
improve
communications and
linkages among governments,
and
while this can
help
facilitate
regional
economic
cooperation
the actual
flow of
activity
-
whether
trade, investment,
or
knowledge-based exchanges
-
will
only
arise from the broader
participation
of the
private
and institutional sectors in these
regimes applicable
to domestic
services,
including
distribution
systems.
A second ad hoc
group,
the Informal
Group
on
Regional
Trade
Liberalization
(RTL)
impact
of trade
and trade
policy developments
in the
region
Uruguay Round,
approaches
to
regional
trade
Group
a
timely
Uruguay
Round of Multilat-
eral Trade
Negotiations,
and
agreed
in the meantime to
proceed
with
pave
the
way
to a more liberal
trading
and investment
regime
for the
to date
include a
viability study
for a
proposed
designed
timely
tariff information
among
a
survey
of
regional
tariff
of an APEC customs
guide;
and
publication
of an Investment
Regula-
region.
proposal
for the
setting up
Group
nomic
trends, evolving
trade
patterns,
and
policy options
for
enhanced
regional
economic
cooperation.
an EPG was
adopted by
the Ministerial
meeting
at APEC-IV. The
likely shape
region
to the
options
for
advancing
APEC
through
strengthened trade,
linkages;
indicate
what
impediments
by
the inter-
dynamism
of trade
region;
and formulate
regional priority
negotiations.
Implementing
the APEC Work
Program
By
the end of
1992,
all of APEC's
Working Groups
were
functioning.
Much of the
activity
involved
meetings,
among
bureaucrats of
participating
countries went some
way
to
improve
communications and
and
while this can
help
facilitate
regional
economic
cooperation
the actual
flow of
activity
-
whether
trade, investment,
or
-
will
only
participation
of the
private
regimes applicable
to domestic
services,
including
distribution
systems.
A second ad hoc
group,
the Informal
Group
on
Regional
Trade
Liberalization
(RTL)
impact
of trade
and trade
policy developments
in the
region
Uruguay Round,
approaches
to
regional
trade
Group
a
timely
Uruguay
Round of Multilat-
eral Trade
Negotiations,
and
agreed
in the meantime to
proceed
with
pave
the
way
to a more liberal
trading
and investment
regime
for the
to date
include a
viability study
for a
proposed
designed
timely
tariff information
among
a
survey
of
regional
tariff
of an APEC customs
guide;
and
publication
of an Investment
Regula-
region.
proposal
for the
setting up
Group
nomic
trends, evolving
trade
patterns,
and
policy options
for
enhanced
regional
economic
cooperation.
an EPG was
adopted by
the Ministerial
meeting
at APEC-IV. The
likely shape
region
to the
options
for
advancing
APEC
through
strengthened trade,
linkages;
indicate
what
impediments
by
the inter-
dynamism
of trade
region;
and formulate
regional priority
negotiations.
Implementing
the APEC Work
Program
By
the end of
1992,
all of APEC's
Working Groups
were
functioning.
Much of the
activity
involved
meetings,
among
bureaucrats of
participating
countries went some
way
to
improve
communications and
and
while this can
help
facilitate
regional
economic
cooperation
the actual
flow of
activity
-
whether
trade, investment,
or
-
will
only
participation
of the
private
423 423 423
cooperative
efforts. Canada has tended to concentrate its APEC
efforts
mainly
in trade-related Work
Projects;
even
though
Canada
is a
shepherd
in the HRD Work
Project,
most of the activities in that
Work
Project
to date were initiated
by
other
participants.31
While
some
problems
were encountered in
managing
and
coordinating
the
ten Work
Projects
with
overlap,
the
report
to the APEC-IV minister-
ial
meeting
in
Bangkok highlighted
the
progress
made in
regional
programming
and in
resolving policy
issues at the
regional
level.32
The APEC
Working Group
on the Review of Trade and Invest-
ment Data has identified certain areas where
discrepancies
occur in
the various national statistics
recording
merchandise
trade,
and has
produced
a consensus on a set of standards for the
proposed
APEC
statistical database. Each
participating country
is
expected
to intro-
duce these common standards wherever
possible
in order to
provide
greater comparability
in data collection and utilization
among
APEC
members. The
Working Group
is also
gathering
data inventories on
trade in services and investment flows. It is
expected
that each
member
country
will
try
to
improve
its own data on trade in
services,
while
working
to reconcile services trade data on a
country-to-country
basis over the next two
years.
The
Working Group
on Trade Promotion has concentrated on
implementing
the APEC Electronic Information Network. This Net-
work connects the
computer systems
of all APEC countries and
per-
mits the
exchange
of information
pertaining
to
trade,
industry
and
business affairs. This Electronic Network is
expected
to
provide
the
technological
infrastructure for information
exchange among
other
APEC
Working Groups
as well.
Regionally-focussed training
courses on trade
promotion
are
becoming
an
increasingly prominent
feature of APEC
activity
under
the
aegis
of this
Working Group.
Korea initiated an annual series of
APEC Trade Promotion
Training Courses,
beginning
in
September
gg99, designed primarily
to assist ASEAN countries
strengthen
their
export promotion policies
and
programs. Subsequently,
the
Working
Group adopted
a Taiwan
(Chinese
Taipei) proposal
for
addressing
the
export development challenges
of small- and medium-scale enter-
31
In
January 1994,
Canada took over from
Japan
as coordinator of the Business
Management
Network. This seems
likely
to
engender
a
greater
number of
project
proposals
from Canadian sources.
32
Consolidated
Report
on APEC Work
Programme,
Record
of
Meeting of
Asia-Pacific
Economic
Cooperation (APEC), lo-II
September I992,
Bangkok,
Thailand.
cooperative
efforts
mainly
Projects;
even
though
Canada
is a
shepherd
in the HRD Work
Project,
Work
Project
by
other
participants.31
While
some
problems
were encountered in
managing
and
coordinating
the
ten Work
Projects
with
overlap,
the
report
ial
meeting
in
Bangkok highlighted
the
progress
made in
regional
programming
and in
resolving policy
issues at the
regional
level.32
The APEC
Working Group
discrepancies
occur in
recording
merchandise
trade,
and has
produced
proposed
APEC
is
expected
to intro-
possible
in order to
provide
among
APEC
members. The
Working Group
is also
gathering
data inventories on
expected
that each
member
country
will
try
to
improve
services,
while
working
country-to-country
years.
The
Working Group
implementing
work connects the
computer systems
per-
mits the
exchange
of information
pertaining
to
trade,
industry
and
expected
to
provide
the
technological
exchange among
other
APEC
Working Groups
as well.
courses on trade
promotion
are
becoming
an
feature of APEC
activity
under
the
aegis
of this
Working Group.
Training Courses,
beginning
in
September
strengthen
their
and
the
Working
Group adopted
a Taiwan
(Chinese
Taipei) proposal
for
addressing
the
31
In
January 1994,
Japan
Management
Network. This seems
likely
to
engender
a
greater
number of
project
proposals
32
Consolidated
Report
on APEC Work
Programme,
Record
of
Meeting of
Asia-Pacific
Economic
September I992,
Bangkok,
Thailand.
cooperative
efforts
mainly
Projects;
even
though
Canada
is a
shepherd
in the HRD Work
Project,
Work
Project
by
other
participants.31
While
some
problems
were encountered in
managing
and
coordinating
the
ten Work
Projects
with
overlap,
the
report
ial
meeting
in
Bangkok highlighted
the
progress
made in
regional
programming
and in
resolving policy
issues at the
regional
level.32
The APEC
Working Group
discrepancies
occur in
recording
merchandise
trade,
and has
produced
proposed
APEC
is
expected
to intro-
possible
in order to
provide
among
APEC
members. The
Working Group
is also
gathering
data inventories on
expected
that each
member
country
will
try
to
improve
services,
while
working
country-to-country
years.
The
Working Group
implementing
work connects the
computer systems
per-
mits the
exchange
of information
pertaining
to
trade,
industry
and
expected
to
provide
the
technological
exchange among
other
APEC
Working Groups
as well.
courses on trade
promotion
are
becoming
an
feature of APEC
activity
under
the
aegis
of this
Working Group.
Training Courses,
beginning
in
September
strengthen
their
and
the
Working
Group adopted
a Taiwan
(Chinese
Taipei) proposal
for
addressing
the
31
In
January 1994,
Japan
Management
Network. This seems
likely
to
engender
a
greater
number of
project
proposals
32
Consolidated
Report
on APEC Work
Programme,
Record
of
Meeting of
Asia-Pacific
Economic
September I992,
Bangkok,
Thailand.
424 424 424
prises
in the Asia-Pacific Trade Promotion
Training
Course. China
has now also offered to host a
Course, along
with a series of seminars
focussing
on
export development
for small- and medium-scale enter-
prises.
In
addition,
the
Working Group
has
placed
its
imprimatur
on
the First Asia-Pacific International Trade
Fair,
planned
for
I994
in
Japan.
The
Working Group
on the
Expansion
of Investment and Techno-
logy
Transfer in the Asia-Pacific
Region
endorsed a
technopark pro-
gram
to assist
newly industrializing
member countries establish suit-
ably equipped
and
supported
industrial
parks
so as to attract external
investment in more advanced industrial
technologies.
Towards this
end,
Japan proposed compiling
a handbook on techno-industrial
parks
in
cooperation
with APEC members. In another initiative
under this Work
Project,
an
expert's meeting
to discuss the various
networking options
available for the dissemination of investment and
technology
information was held in
Yogyakarta, Indonesia,
in
1992.
The networks established within the framework of Human
Resource
Development
Initiative have launched an
array
of indi-
vidual
projects involving joint research,
information
exchange,
sem-
inars and
workshops.33
A Domestic Network structure is
being put
in
place
in
participating
countries,
with Canada
taking
a
lead,
in
order to create
linkages among
institutions
engaged
in the relevant
areas of human resource
development.
An APEC Education Minister-
ial
Meeting
took
place
in
Washington, DC,
in
August 1992,
and
further consultations will take
place
in the Education Forum estab-
lished under the
auspices
of the
Working Group.
The APEC HRD
Working Group
has also embraced other
cooperative
activities in education and
training, notably
the so-called
'partnership'
initiatives
linking
APEC and
Japan
and the United
States,
respectively;
an Australian
study
of
University Mobility
in
Asia-Pacific;
and the
Asia-Pacific
Human Resource
Development
Outlook
prepared by
the Pacific Economic
Cooperation
Council
(PECC).
The
Working Group
on
has
agreed
on a format for an APEC
energy database,
which is intended for use
in information
exchanges
and discussions on
energy policy
issues. The
33
In addition to the activities it itself
sponsors,
the APEC HRD
Working Group
also
provides
liaison with other
cooperative
initiatives at the
regional
level in educa-
tion and
training. Examples
include the so-called
'partnership' projects
between
Japan
and the United
States,
an Australian initiated
study
of
University Mobility
in
Asia-Pacific,
and the Pacific Economic
Cooperation
Council
(PECC)
Asia-Pacific
HRD Outlook
presented
to the APEC
Working Group.
prises
Training
Course. China
Course, along
focussing
on
export development
prises.
In
addition,
the
Working Group
has
placed
its
imprimatur
on
Fair,
planned
for
I994
in
Japan.
The
Working Group
on the
Expansion
logy
Region
endorsed a
technopark pro-
gram
to assist
ably equipped
and
supported
industrial
parks
technologies.
Towards this
end,
parks
in
cooperation
under this Work
Project,
an
expert's meeting
networking options
technology
in
1992.
Resource
Development
array
of indi-
vidual
information
exchange,
sem-
inars and
workshops.33
being put
in
place
in
participating
countries,
with Canada
taking
a
lead,
in
order to create
linkages among
institutions
engaged
in the relevant
development.
ial
Meeting
took
place
in
Washington, DC,
in
August 1992,
and
place
lished under the
auspices
of the
Working Group.
The APEC HRD
Working Group
cooperative
training, notably
the so-called
'partnership'
initiatives
linking
APEC and
Japan
and the United
States,
respectively;
an Australian
study
of
University Mobility
in
Asia-Pacific;
and the
Asia-Pacific
Human Resource
Development
Outlook
prepared by
Cooperation
Council
(PECC).
The
Working Group
on
has
agreed
energy database,
in information
exchanges
and discussions on
energy policy
issues. The
33
sponsors,
the APEC HRD
Working Group
also
provides
liaison with other
cooperative
initiatives at the
regional
level in educa-
tion and
training. Examples
between
Japan
and the United
States,
study
of
University Mobility
in
Asia-Pacific,
Cooperation
Council
(PECC)
Asia-Pacific
HRD Outlook
presented
to the APEC
Working Group.
prises
Training
Course. China
Course, along
focussing
on
export development
prises.
In
addition,
the
Working Group
has
placed
its
imprimatur
on
Fair,
planned
for
I994
in
Japan.
The
Working Group
on the
Expansion
logy
Region
endorsed a
technopark pro-
gram
to assist
ably equipped
and
supported
industrial
parks
technologies.
Towards this
end,
parks
in
cooperation
under this Work
Project,
an
expert's meeting
networking options
technology
in
1992.
Resource
Development
array
of indi-
vidual
information
exchange,
sem-
inars and
workshops.33
being put
in
place
in
participating
countries,
with Canada
taking
a
lead,
in
order to create
linkages among
institutions
engaged
in the relevant
development.
ial
Meeting
took
place
in
Washington, DC,
in
August 1992,
and
place
lished under the
auspices
of the
Working Group.
The APEC HRD
Working Group
cooperative
training, notably
the so-called
'partnership'
initiatives
linking
APEC and
Japan
and the United
States,
respectively;
an Australian
study
of
University Mobility
in
Asia-Pacific;
and the
Asia-Pacific
Human Resource
Development
Outlook
prepared by
Cooperation
Council
(PECC).
The
Working Group
on
has
agreed
energy database,
in information
exchanges
and discussions on
energy policy
issues. The
33
sponsors,
the APEC HRD
Working Group
also
provides
liaison with other
cooperative
initiatives at the
regional
level in educa-
tion and
training. Examples
between
Japan
and the United
States,
study
of
University Mobility
in
Asia-Pacific,
Cooperation
Council
(PECC)
Asia-Pacific
HRD Outlook
presented
to the APEC
Working Group.
425 425 425
Working Group
has
approved
a set of recommendations
regarding
the use of clean coal
technologies.
A
compendium
on
energy saving
practices
in APEC countries was
compiled,
and several additional
information
sharing
exercises
relating
to
energy technology
co-
operation
are
being developed.
The APEC Work
Project
on Marine Resource
Cooperation
has
formulated detailed
priorities
for
addressing
issues
concerning
sensit-
ive marine
ecosystems
and coastal communities. The
Working Group
endorses
integrated
coastal
planning
as an
approach
to marine envir-
onmental
protection
and sustainable
development.
An outline
plan
has been formulated for the
setting up
of task teams to deal with the
problems
of toxic
algae/red
tide
afflicting
the APEC
region.
The
Working Group
on Telecommunications has
published
a first
study
of'The States of Telecommunications Infrastructure and
Regu-
latory
Environments of APEC
Economies,'
and a second
study
on
telecommunications
operational training.
Several electronic data
interchange (EDI) pilot projects
have been
implemented
in order to
broaden awareness of this
technology facility
and to facilitate trade
among
APEC countries. In the infrastructure
context,
consideration
has been
given
to a
Japanese proposal
for
teleports
to
help improve
business communications across the
region,
and to the
development
of advanced broadband
high-speed
data
highways.
A
Training
Needs
Assessment
study sponsored by
the United States
provoked
some
controversy among
Telecommunications
Working Group partici-
pants.
Most of the efforts of the
Working Group
on Fisheries were directed
at
cooperation
on identification of fish
stocks,
harvesting
and
post-
harvest
fishery technologies, marketing,
and
management arrange-
ments. Current activities of the
Working Group
include a
survey
of
species requiring
international
cooperation
in
management efforts;
a
survey
of information on fish
stocks,
existing management arrange-
ments and
provisions
for scientific
support;
an
inventory
of
existing
facilities and
opportunities
for transfers of
fishery technology
between
APEC
participants;
and
periodic
assessments of
global
and
regional
markets for seafood
products
from the APEC
region.
The Taiwanese
project proposal
on
Promoting Development
of Medium and Small
Enterprises through Cooperation,
which is
already incorporated
into
the Trade Promotion Work
Project,
has also been considered
by
the
Work
Project
on Fisheries.
The
Working Group
on
Transportation
conducted a
range
of
surveys addressing regional transportation systems
and
services,
Working Group
has
approved
regarding
technologies.
A
compendium
on
energy saving
practices
compiled,
information
sharing
exercises
relating
to
energy technology
co-
operation
are
being developed.
The APEC Work
Project
on Marine Resource
Cooperation
has
formulated detailed
priorities
for
addressing
issues
concerning
sensit-
ive marine
ecosystems
Working Group
endorses
integrated
coastal
planning
as an
approach
to marine envir-
onmental
protection
and sustainable
development.
An outline
plan
setting up
problems
of toxic
algae/red
tide
afflicting
the APEC
region.
The
Working Group
published
a first
study
Regu-
latory
Economies,'
and a second
study
on
telecommunications
have been
implemented
in order to
technology facility
among
context,
consideration
has been
given
to a
Japanese proposal
for
teleports
to
help improve
region,
and to the
development
high-speed
data
highways.
A
Training
Needs
Assessment
study sponsored by
the United States
provoked
some
controversy among
Telecommunications
pants.
Working Group
at
cooperation
stocks,
harvesting
and
post-
harvest
and
management arrange-
Working Group
include a
survey
of
species requiring
international
cooperation
in
management efforts;
a
survey
stocks,
ments and
provisions
for scientific
support;
an
inventory
of
existing
facilities and
opportunities
for transfers of
fishery technology
between
APEC
participants;
and
periodic
assessments of
global
and
regional
markets for seafood
products
from the APEC
region.
The Taiwanese
project proposal
on
of Medium and Small
which is
into
Project,
by
the
Work
Project
on Fisheries.
The
Working Group
on
Transportation
conducted a
range
of
and
services,
Working Group
has
approved
regarding
technologies.
A
compendium
on
energy saving
practices
compiled,
information
sharing
exercises
relating
to
energy technology
co-
operation
are
being developed.
The APEC Work
Project
on Marine Resource
Cooperation
has
formulated detailed
priorities
for
addressing
issues
concerning
sensit-
ive marine
ecosystems
Working Group
endorses
integrated
coastal
planning
as an
approach
to marine envir-
onmental
protection
and sustainable
development.
An outline
plan
setting up
problems
of toxic
algae/red
tide
afflicting
the APEC
region.
The
Working Group
published
a first
study
Regu-
latory
Economies,'
and a second
study
on
telecommunications
have been
implemented
in order to
technology facility
among
context,
consideration
has been
given
to a
Japanese proposal
for
teleports
to
help improve
region,
and to the
development
high-speed
data
highways.
A
Training
Needs
Assessment
study sponsored by
the United States
provoked
some
controversy among
Telecommunications
pants.
Working Group
at
cooperation
stocks,
harvesting
and
post-
harvest
and
management arrange-
Working Group
include a
survey
of
species requiring
international
cooperation
in
management efforts;
a
survey
stocks,
ments and
provisions
for scientific
support;
an
inventory
of
existing
facilities and
opportunities
for transfers of
fishery technology
between
APEC
participants;
and
periodic
assessments of
global
and
regional
markets for seafood
products
from the APEC
region.
The Taiwanese
project proposal
on
of Medium and Small
which is
into
Project,
by
the
Work
Project
on Fisheries.
The
Working Group
on
Transportation
conducted a
range
of
and
services,
426 426 426
transport
bottlenecks,
data
bases,
and work of other international
organizations.
The Work
Project
also includes a
long-term projection
of
transportation requirements
for the APEC
region.
The
Working Group
on Tourism is
drafting
work
plans
which will
also address the activities of other international
organizations
in this
area.
Among
the
topics
on the
Working Group's agenda
are tourism
data collection and
statistics;
creation of an
inventory
of tourism
pro-
jects;
tourism
training;
tourism and
aviation;
tourism and the envir-
onment;
and the identification of
impediments
to tourism.
The APEC work
program
admits to difficulties with
duplication,
overlap,
and over-bureaucratization of activities.
Duplication
and
overlap
have been
especially pervasive
in data
collection,
information
networking
and human resource
development,
which
span
several
Working Groups
in a
largely
uncoordinated manner. For
example,
the
plan
to set
up
an investment information network under the Work
Project
on
Expansion
of Investment and
Technology
Transfer
may
duplicate
or
overlap
with the information
exchanges
run
through
the
APEC Electronic Information Network
(APECNet) sponsored by
the
Trade Promotion
Working Group,
and the
surveys
on investment
flows
implemented by
the Review of Trade and Investment Data
Projects.
Several
Working Groups
are therefore
looking
to APECNet
to service their information
sharing requirements.
There has been a
similar
proliferation
of
training
activities across various Work Pro-
jects,
most
notably
in the Work
Project
on Multilateral Human
Resource
Development
and in other
projects
in Trade Promotion
and in
Telecommunications,
with little
inter-group
coordination or
common direction. Most of the
Working Group
activities to date
involve
government bureaucrats,
with little
private
sector or extended
public
sector
participation.
While some
progress
has taken
place
in
under APEC
auspices,
most of this has been
confined to information
exchanges,
inventories and
surveys,
and sem-
inars for officials.
APEC and the
Uruguay
Round
of
Multilateral Trade
Negotiations
The
Uruguay
Round of multilateral trade
negotiations figured prom-
inently
on the
agenda
of APEC. This concern and attention to the
stalled
Uruguay
Round was reiterated in various APEC
fora, most
forcefully
in a combined ministerial statement on the
Uruguay
Round
issued on the occasion of the APEC-IV
meeting
in
Bangkok
in
Sep-
transport
bottlenecks,
data
bases,
organizations.
The Work
Project
also includes a
of
for the APEC
region.
The
Working Group
on Tourism is
drafting
work
plans
which will
organizations
in this
area.
Among
the
topics
on the
are tourism
data collection and
statistics;
creation of an
inventory
of tourism
pro-
jects;
tourism
training;
tourism and
aviation;
onment;
impediments
to tourism.
The APEC work
program
duplication,
overlap,
Duplication
and
overlap
have been
in data
collection,
information
networking
and human resource
development,
which
span
several
Working Groups
in a
largely
example,
the
plan
to set
up
Project
on
Expansion
of Investment and
Technology
Transfer
may
duplicate
or
overlap
exchanges
run
through
the
the
Trade Promotion
Working Group,
and the
surveys
on investment
flows
implemented by
Projects.
Several
Working Groups
are therefore
looking
to APECNet
There has been a
similar
proliferation
of
training
jects,
most
notably
in the Work
Project
Resource
Development
and in other
projects
in Trade Promotion
and in
Telecommunications,
with little
inter-group
coordination or
Working Group
activities to date
involve
with little
private
sector or extended
public
sector
participation.
While some
progress
has taken
place
in
under APEC
auspices,
exchanges,
inventories and
surveys,
and sem-
APEC and the
Uruguay
Round
of
Multilateral Trade
Negotiations
The
Uruguay
inently
on the
agenda
stalled
Uruguay
fora, most
forcefully
Uruguay
Round
meeting
in
Bangkok
in
Sep-
transport
bottlenecks,
data
bases,
organizations.
The Work
Project
also includes a
of
for the APEC
region.
The
Working Group
on Tourism is
drafting
work
plans
which will
organizations
in this
area.
Among
the
topics
on the
are tourism
data collection and
statistics;
creation of an
inventory
of tourism
pro-
jects;
tourism
training;
tourism and
aviation;
onment;
impediments
to tourism.
The APEC work
program
duplication,
overlap,
Duplication
and
overlap
have been
in data
collection,
information
networking
and human resource
development,
which
span
several
Working Groups
in a
largely
example,
the
plan
to set
up
Project
on
Expansion
of Investment and
Technology
Transfer
may
duplicate
or
overlap
exchanges
run
through
the
the
Trade Promotion
Working Group,
and the
surveys
on investment
flows
implemented by
Projects.
Several
Working Groups
are therefore
looking
to APECNet
There has been a
similar
proliferation
of
training
jects,
most
notably
in the Work
Project
Resource
Development
and in other
projects
in Trade Promotion
and in
Telecommunications,
with little
inter-group
coordination or
Working Group
activities to date
involve
with little
private
sector or extended
public
sector
participation.
While some
progress
has taken
place
in
under APEC
auspices,
exchanges,
inventories and
surveys,
and sem-
APEC and the
Uruguay
Round
of
Multilateral Trade
Negotiations
The
Uruguay
inently
on the
agenda
stalled
Uruguay
fora, most
forcefully
Uruguay
Round
meeting
in
Bangkok
in
Sep-
427 427 427
tember
I991.
The ministerial statement34
emphasized
the
importance
of a
strengthened
international
trading system
for the continued
expansion
of world
trade,
and for
facilitating
further economic reform
in the
region, upon
which the future
growth
and
development
of
the APEC economies
depend.
APEC ministers
expressed
unanimous
support
for the
principles espoused
in the
Uruguay
Round,
while
lamenting
the lack of
progress
in
negotiations
over
agricultural trade,
market
access,
and trade in services.
APEC countries
clearly regarded
an
early
and successful conclusion
of the
Uruguay
Round as
being
of vital
significance
to the
region.
The economic
dynamism
of the APEC
region
was
generally
viewed
as
hinging upon
an
open,
multilateral framework for trade. This
posi-
tion was
clearly
articulated
by
the APEC-V ministerial
meeting
and
the Asia Pacific summit that followed.
Yet,
it is also clear that this
consensual
support
for the multilateral
trading system
does not over-
ride the
propensity
of
governments
to
try
to
preserve
and maintain
their own
protectionist impediments
to trade.
Thus,
Korea's
response
to the Draft Final Act
(the
so-called 'Dunkel
Package') put
forward
in December
I99I,
rejected
any compromises
to its
notoriously pro-
hibitive
agricultural import policy,
while ASEAN countries have been
loath to
forgo
their own restrictions on trade and investment and
impediments
to market access.35
What is
significant,
however,
is the broad
acceptance
of a
linkage
between
regional
economic
cooperation
and the multilateral
trading
system
that
crystallized
as the
conceptual
cornerstone of APEC. The
countries of APEC do not envision that
grouping becoming
a
regional
substitute or alternative to a multilateral
trading system. Indeed,
the
APEC
conception
of
plurilateral regional
economic
cooperation
is
predicated upon
an
open, comprehensive,
and
non-discriminatory
framework for international trade and investment. The ASEAN
developing
countries,
in
particular,
are
wary
about
adopting
an
APEC trade and investment
framework,
lest this leave them vulner-
able to
managed
trade initiatives on the
part
of the US or other
powerful trading partners.
Instead,
ASEAN insists that
any
APEC
framework
agreement
be
compatible
with the
principles espoused by
GATT.
'Open' regionalism,
as
expressed
in
APEC,
presumes
the
34
APEC Statement on the
Uruguay Round,
reprinted
in Record
of
the Fourth Minis-
terial
Meeting of Asia-Pacific
Economic
Cooperation (APEC), p.
17.
35
On trade restrictions and
impediments among
the ASEAN countries see Aus-
tralia's Business
Challenge.
Southeast Asia in the
g99os,
pp.
70-8.
tember
I991.
emphasized
the
importance
of a
strengthened
international
trading system
for the continued
expansion
of world
trade,
and for
facilitating
in the
region, upon
which the future
growth
and
development
of
the APEC economies
depend.
APEC ministers
expressed
unanimous
support
for the
principles espoused
in the
Uruguay
Round,
while
lamenting
the lack of
progress
in
negotiations
over
agricultural trade,
market
access,
APEC countries
clearly regarded
an
early
of the
Uruguay
Round as
being
of vital
significance
to the
region.
The economic
dynamism
of the APEC
region
was
generally
viewed
as
hinging upon
an
open,
posi-
tion was
clearly
articulated
by
meeting
and
Yet,
consensual
support
trading system
does not over-
ride the
propensity
of
governments
to
try
to
preserve
and maintain
their own
to trade.
Thus,
Korea's
response
(the
so-called 'Dunkel
Package') put
forward
in December
I99I,
rejected
any compromises
to its
notoriously pro-
hibitive
loath to
forgo
impediments
to market access.35
What is
significant,
however,
is the broad
acceptance
of a
linkage
between
regional
economic
cooperation
trading
system
that
crystallized
as the
conceptual
grouping becoming
a
regional
the
APEC
conception
of
economic
cooperation
is
predicated upon
an
and
non-discriminatory
developing
countries,
in
particular,
are
wary
about
adopting
an
framework,
able to
managed
part
of the US or other
Instead,
ASEAN insists that
any
APEC
framework
agreement
be
compatible
with the
GATT.
'Open' regionalism,
as
expressed
in
APEC,
presumes
the
34
Uruguay Round,
reprinted
in Record
of
the Fourth Minis-
terial
Economic
17.
35
impediments among
tralia's Business
Challenge.
g99os,
pp.
70-8.
tember
I991.
emphasized
the
importance
of a
strengthened
international
trading system
for the continued
expansion
of world
trade,
and for
facilitating
in the
region, upon
which the future
growth
and
development
of
the APEC economies
depend.
APEC ministers
expressed
unanimous
support
for the
principles espoused
in the
Uruguay
Round,
while
lamenting
the lack of
progress
in
negotiations
over
agricultural trade,
market
access,
APEC countries
clearly regarded
an
early
of the
Uruguay
Round as
being
of vital
significance
to the
region.
The economic
dynamism
of the APEC
region
was
generally
viewed
as
hinging upon
an
open,
posi-
tion was
clearly
articulated
by
meeting
and
Yet,
consensual
support
trading system
does not over-
ride the
propensity
of
governments
to
try
to
preserve
and maintain
their own
to trade.
Thus,
Korea's
response
(the
so-called 'Dunkel
Package') put
forward
in December
I99I,
rejected
any compromises
to its
notoriously pro-
hibitive
loath to
forgo
impediments
to market access.35
What is
significant,
however,
is the broad
acceptance
of a
linkage
between
regional
economic
cooperation
trading
system
that
crystallized
as the
conceptual
grouping becoming
a
regional
the
APEC
conception
of
economic
cooperation
is
predicated upon
an
and
non-discriminatory
developing
countries,
in
particular,
are
wary
about
adopting
an
framework,
able to
managed
part
of the US or other
Instead,
ASEAN insists that
any
APEC
framework
agreement
be
compatible
with the
GATT.
'Open' regionalism,
as
expressed
in
APEC,
presumes
the
34
Uruguay Round,
reprinted
in Record
of
the Fourth Minis-
terial
Economic
17.
35
impediments among
tralia's Business
Challenge.
g99os,
pp.
70-8.
428 428 428
maintenance and enhancement of multilateral
trading arrangements
at the
global
level.
Challenges
and
Responses
to
'Open'
Asia Pacific
Regionalism
The main threat to the
'open' concept
of Asia Pacific
regionalism
expounded by
APEC stems from the
penchant
of some
governments
for
managed
trade
through subregional
or bilateral
arrangements.
The
phenomenon
of
managed
trade covers such devices as exclusivist
preferential trading agreements,
trans-border investment enclaves
(so-called 'growth triangles'),
bilateral deals and market
sharing
arrangements, including 'voluntary import expansions' (VIEs),
arrangements analogous
to externalized
protection.
These
managed
trade
arrangements
are
inherently
exclusivist and therefore discrimin-
atory against non-signatories. Owing
to the
power equations implicit
in
managed trade,
it is
mostly
the
province
of
stronger,
more domin-
ant,
hegemonical countries,
and offers
relatively
little
advantage
to
smaller, weaker,
poorer,
more
dependent
economies. To a consider-
able extent
managed
trade militates
against
the
non-discriminatory,
transparent, open-market principles
of the multilateral
trading
system.
Several such
sub-regional preferential agreements
and bilateral
managed
trade
arrangements actually
co-exist in the Asia Pacific
area. Well before APEC came into
being,
Australia and New Zealand
concluded a Closer Economic Relations and Trade
Agreement
offering
one another
reciprocal
trade
preferences. ASEAN,
for its
part,
also instituted a Preferential Trade
Arrangement among
member
countries,
which is now
being supplanted by
an ASEAN Free Trade
Area
(AFTA).36
Various trans-border industrial enclaves have been
established,
most
notably
the
Singapore
-
Indonesia
(Riau)
Malaysia (Johor)
'Growth
Triangle,' representing
still another
schema for the
sub-regional management
of international trade and
investment.37
36
Vide Mari
Pangestu,
Hadi Soesastro and
Mubariq Ahmad,
'A New Look at
Intra-ASEAN Economic
Cooperation,'
ASEAN Economic
Bulletin,
vol.
8,
no.
3 (1992);
Martin
Rudner, 'ASEAN,
Cooperation
and
Hemispheric
Free
Trade for the
Americas,' pp.
I41-3.
37
Other
sub-regional
economic zones
being planned
or mooted include a Northern
Growth
Triangle covering (Northeast) Malaysia, (Southern)
Thailand and
possibly
Indonesia
(Sumatra);
a Borneo
growth triangle covering
Indonesian
Kalimantan,
at the
global
level.
Challenges
and
Responses
to
'Open'
Asia Pacific
Regionalism
'open' concept
of Asia Pacific
regionalism
expounded by
APEC stems from the
penchant
of some
governments
for
managed
trade
through subregional
or bilateral
arrangements.
The
phenomenon
of
managed
sharing
to externalized
protection.
These
managed
trade
arrangements
are
inherently
to the
in
managed trade,
it is
mostly
the
province
of
stronger,
more domin-
ant,
and offers
relatively
little
advantage
to
smaller, weaker,
poorer,
more
dependent
able extent
managed
trade militates
against
the
non-discriminatory,
of the multilateral
trading
system.
Several such
and bilateral
managed
trade
being,
Agreement
offering
one another
reciprocal
trade
preferences. ASEAN,
for its
part,
Arrangement among
member
countries,
which is now
being supplanted by
an ASEAN Free Trade
Area
(AFTA).36
established,
most
notably
the
Singapore
-
Indonesia
(Riau)
Malaysia (Johor)
'Growth
still another
schema for the
investment.37
36
Vide Mari
Pangestu,
Hadi Soesastro and
Mubariq Ahmad,
'A New Look at
Cooperation,'
ASEAN Economic
Bulletin,
vol.
8,
no.
3 (1992);
Martin
Rudner, 'ASEAN,
Cooperation
and
Hemispheric
Free
Trade for the
Americas,' pp.
I41-3.
37
Other
sub-regional
economic zones
being planned
Growth
Thailand and
possibly
Indonesia
(Sumatra);
a Borneo
Indonesian
Kalimantan,
at the
global
level.
Challenges
and
Responses
to
'Open'
Asia Pacific
Regionalism
'open' concept
of Asia Pacific
regionalism
expounded by
APEC stems from the
penchant
of some
governments
for
managed
trade
through subregional
or bilateral
arrangements.
The
phenomenon
of
managed
sharing
to externalized
protection.
These
managed
trade
arrangements
are
inherently
to the
in
managed trade,
it is
mostly
the
province
of
stronger,
more domin-
ant,
and offers
relatively
little
advantage
to
smaller, weaker,
poorer,
more
dependent
able extent
managed
trade militates
against
the
non-discriminatory,
of the multilateral
trading
system.
Several such
and bilateral
managed
trade
being,
Agreement
offering
one another
reciprocal
trade
preferences. ASEAN,
for its
part,
Arrangement among
member
countries,
which is now
being supplanted by
an ASEAN Free Trade
Area
(AFTA).36
established,
most
notably
the
Singapore
-
Indonesia
(Riau)
Malaysia (Johor)
'Growth
still another
schema for the
investment.37
36
Vide Mari
Pangestu,
Hadi Soesastro and
Mubariq Ahmad,
'A New Look at
Cooperation,'
ASEAN Economic
Bulletin,
vol.
8,
no.
3 (1992);
Martin
Rudner, 'ASEAN,
Cooperation
and
Hemispheric
Free
Trade for the
Americas,' pp.
I41-3.
37
Other
sub-regional
economic zones
being planned
Growth
Thailand and
possibly
Indonesia
(Sumatra);
a Borneo
Indonesian
Kalimantan,
429 429 429
The
preferential trading arrangement
that fomented the most
unease
among
Asian
countries,
at
least,
was the formation of a North
American
trading
area, initially by
the Canada-US Free Trade
Agreement
and its extension to Mexico
through
an
expanded
NAFTA.
Despite attempts by
the Americans and Canadians to reas-
sure their Asian
trading partners,
serious concerns about the
possible
discriminatory implications
were indicated
by Japan
and the ASEAN
countries,
in
particular.
At the APEC-IV ministerial
meeting
in
Bangkok
ASEAN
governments expressed misgivings
over trade-
diverting
elements in NAFTA.38
Malaysia
was
especially piqued
that
the North American members of APEC felt it
necessary
to embark on
exclusivist continental
trading agreements
that discriminated
against
trans-Pacific
trading partners.39
At the
I993
ASEAN Post Ministerial
Conference,
Canada and the United States tried to
temper apprehen-
sions about North American free trade
by agreeing
to
explore ways
and means of
creating linkages
and areas of
cooperation
between
NAFTA and AFTA.40
The recent
propensity
of
major trading
countries like the United
States and
Japan
to seek bilateral trade remedies denoted still another
element of exclusion and trade discrimination. The United States has
been
particularly
inclined to resort to bilateral trade
management
mechanisms like the
US-Japan Strategic Impediments
Initiative to
achieve
improved
access to
markets,
sometimes at the
expense
of
Malaysian
Sarawak and
Sabah,
and
Brunei;
a Bhat Economic Zone
embracing
Thai-
land, Cambodia, Laos,
and
possibly Burma;
and a wider Southern China Economic
Zone
encompassing
South
China, Hong Kong,
and Taiwan. Even more tenuous
perhaps
are
suggestions
of a Pan
Japan
Sea Economic Zone
involving China,
Pacific
Russia and
Japan,
and a Pan Yellow Sea Economic Zone
involving Japan, China,
and North and South Korea. On
sub-regional
economic zones in Southeast and
Eastern
Asia,
see Lee Tsao
Yuan,
Growth
Triangle:
The
Johor-Singapore-Riau Experience,
Singapore:
Institute of Southeast Asian
Studies, i991;
Martin
Rudner,
'The Dimen-
sions of Asia Pacific Economic
Cooperation,'
Transnational Law &
Contemporary
Prob-
lems,
vol.
4,
no. 2
(I994);
Chia Siow Yue and Lee Tsao
Yuan, 'Subregional
Economic
Zones: A New Motive Force in Asia-Pacific
Development,
in
Bergsten
and Noland
(eds), Pacific Dynamism
System, pp. 225-69.
38
For a
study
of the
implications
of NAFTA for East and Southeast Asian
develop-
ing countries,
see Han Soo Kim and Ann
Weston,
'A North American Free Trade
Agreement
and East Asian
Developing Countries,'
ASEAN Economic
Bulletin,
vol.
9,
no.
3 (I993).
39
Vide
speech by
the Hon. Dato Seri Rafidah
Aziz,
Minister of International
Trade and
Industry
of
Malaysia,
in Record
of
Economic
Cooperation (APEC), p. 97.
40
At the same ASEAN Post Ministerial
Conference,
the ASEAN and Canadian
foreign
ministers
signed
a revised Canada-ASEAN Economic
Cooperation Agree-
ment,
aimed at
expanding governmental
and
private
sector
linkages.
The
unease
among
Asian
countries,
at
least,
American
trading
area, initially by
Agreement
through
an
expanded
NAFTA.
Despite attempts by
sure their Asian
trading partners,
possible
were indicated
by Japan
and the ASEAN
countries,
in
particular.
meeting
in
Bangkok
ASEAN
over trade-
diverting
Malaysia
was
especially piqued
that
necessary
to embark on
trading agreements
that discriminated
against
trans-Pacific
trading partners.39
At the
I993
Conference,
temper apprehen-
by agreeing
to
explore ways
and means of
creating linkages
and areas of
cooperation
between
NAFTA and AFTA.40
The recent
propensity
of
major trading
States and
Japan
been
particularly
management
mechanisms like the
Initiative to
achieve
improved
access to
markets,
sometimes at the
expense
of
Malaysian
Sarawak and
Sabah,
and
Brunei;
embracing
Thai-
and
possibly Burma;
Zone
encompassing
South
China, Hong Kong,
perhaps
are
suggestions
of a Pan
Japan
Sea Economic Zone
involving China,
Pacific
Russia and
Japan,
sub-regional
Eastern
Asia,
see Lee Tsao
Yuan,
Growth
Triangle:
The
Singapore:
Studies, i991;
Martin
Rudner,
'The Dimen-
Cooperation,'
Transnational Law &
Contemporary
Prob-
lems,
vol.
4,
no. 2
(I994);
Yuan, 'Subregional
Economic
Development,
in
Bergsten
and Noland
System, pp. 225-69.
38
For a
study
of the
implications
develop-
ing countries,
Weston,
Agreement
and East Asian
ASEAN Economic
Bulletin,
vol.
9,
no.
3 (I993).
39
Vide
speech by
Aziz,
Trade and
Industry
of
Malaysia,
in Record
of
Economic
40
Conference,
foreign
ministers
signed
Cooperation Agree-
ment,
aimed at
and
private
sector
linkages.
The
unease
among
Asian
countries,
at
least,
American
trading
area, initially by
Agreement
through
an
expanded
NAFTA.
Despite attempts by
sure their Asian
trading partners,
possible
were indicated
by Japan
and the ASEAN
countries,
in
particular.
meeting
in
Bangkok
ASEAN
over trade-
diverting
Malaysia
was
especially piqued
that
necessary
to embark on
trading agreements
that discriminated
against
trans-Pacific
trading partners.39
At the
I993
Conference,
temper apprehen-
by agreeing
to
explore ways
and means of
creating linkages
and areas of
cooperation
between
NAFTA and AFTA.40
The recent
propensity
of
major trading
States and
Japan
been
particularly
management
mechanisms like the
Initiative to
achieve
improved
access to
markets,
sometimes at the
expense
of
Malaysian
Sarawak and
Sabah,
and
Brunei;
embracing
Thai-
and
possibly Burma;
Zone
encompassing
South
China, Hong Kong,
perhaps
are
suggestions
of a Pan
Japan
Sea Economic Zone
involving China,
Pacific
Russia and
Japan,
sub-regional
Eastern
Asia,
see Lee Tsao
Yuan,
Growth
Triangle:
The
Singapore:
Studies, i991;
Martin
Rudner,
'The Dimen-
Cooperation,'
Transnational Law &
Contemporary
Prob-
lems,
vol.
4,
no. 2
(I994);
Yuan, 'Subregional
Economic
Development,
in
Bergsten
and Noland
System, pp. 225-69.
38
For a
study
of the
implications
develop-
ing countries,
Weston,
Agreement
and East Asian
ASEAN Economic
Bulletin,
vol.
9,
no.
3 (I993).
39
Vide
speech by
Aziz,
Trade and
Industry
of
Malaysia,
in Record
of
Economic
40
Conference,
foreign
ministers
signed
Cooperation Agree-
ment,
aimed at
and
private
sector
linkages.
430 430 430
other Asia Pacific
suppliers.
Its
predilection
for
'aggressive'
trade
policies, retaliatory
measures,
and
market-sharing agreements usually
entail trade diversion
effects,
often at the
expense
of the more vulner-
able,
weaker
developing
economies of the
region.
The reactions of
Asia Pacific countries to
seemingly exclusionary
and
protectionist
trends in international economic affairs
may
well
impel
the
govern-
ments concerned to
contemplate alternative, sub-regional arrange-
ments.
The East Asia Economic
Group/Caucus Proposal
The formation of APEC did little to
assuage
the
apprehensions
of
ASEAN countries over the deadlocked
Uruguay
Round,
nor their
uneasiness over the
perceived
threat of
protectionist
trade blocs emer-
ging
in
Europe
and North America. Some ASEAN
governments
also
reacted
warily
to the North American
penchant
to
inject
environ-
mental and labour issues into international trade
negotiations.
Aware of their
vulnerabilities,
the ASEAN countries and some of
the Asian NIEs felt
pressed
to
explore
alternative modalities for
in defense of their economic and
trading
inter-
ests.
Taking
the
lead,
the
Malaysian
Prime Minister Dr Mahathir
Mohammed
proposed
the creation of an East Asian Economic
Group
(EAEG) consisting
the ASEAN
countries,
the Asian
NIEs,
China
and
Japan.41
As
originally conceived,
the EAEG would constitute a
preferential arrangement
for intra-Asian
trade,
investment and col-
laboration on economic
policy.
What
Malaysia
called for was tanta-
mount to the formation of an exclusive East Asian economic bloc as
a
counterweight
to
perceived
bloc formation in
Europe
and North
America. The United
States, Canada,
were
pointedly
excluded.
The EAEG
proposal
found some favour on the
part
of China42
and
Korea; however,
Japan
maintained a studied ambivalence. While
reluctant
actually
to endorse the formation of an exclusivist
trading
bloc,
the
Japanese
seemed
unwilling
to foreclose on Asia whilst
regional protectionism
was
threatening
to
spread
across
Europe
and
the Americas. The United States for its
part
was
vigorously opposed
41
Tan,
Toh and
Low,
Co-operation,' pp.
325-8.
42
'China Seeks Close Ties with ASEAN
Nations', Beijing
Review
(20-26 January
1992),
pp.
7-8.
other Asia Pacific
suppliers.
Its
predilection
for
'aggressive'
trade
measures,
and
effects,
often at the
expense
of the more vulner-
able,
weaker
developing
economies of the
region.
The reactions of
and
protectionist
may
well
impel
the
govern-
ments concerned to
ments.
assuage
the
apprehensions
of
Uruguay
Round,
nor their
uneasiness over the
perceived
threat of
protectionist
trade blocs emer-
ging
in
Europe
governments
also
reacted
warily
penchant
to
inject
environ-
negotiations.
Aware of their
vulnerabilities,
the Asian NIEs felt
pressed
to
explore
trading
inter-
ests.
Taking
the
lead,
the
Malaysian
Mohammed
proposed
Group
(EAEG) consisting
the ASEAN
countries,
the Asian
NIEs,
China
and
Japan.41
As
for intra-Asian
trade,
investment and col-
policy.
What
Malaysia
a
counterweight
to
perceived
bloc formation in
Europe
and North
America. The United
States, Canada,
were
pointedly
excluded.
The EAEG
proposal
part
of China42
and
Korea; however,
Japan
reluctant
actually
trading
bloc,
the
Japanese
seemed
unwilling
was
threatening
to
spread
across
Europe
and
part
was
vigorously opposed
41
Tan,
Toh and
Low,
Co-operation,' pp.
325-8.
42
Nations', Beijing
Review
(20-26 January
1992),
pp.
7-8.
other Asia Pacific
suppliers.
Its
predilection
for
'aggressive'
trade
measures,
and
effects,
often at the
expense
of the more vulner-
able,
weaker
developing
economies of the
region.
The reactions of
and
protectionist
may
well
impel
the
govern-
ments concerned to
ments.
assuage
the
apprehensions
of
Uruguay
Round,
nor their
uneasiness over the
perceived
threat of
protectionist
trade blocs emer-
ging
in
Europe
governments
also
reacted
warily
penchant
to
inject
environ-
negotiations.
Aware of their
vulnerabilities,
the Asian NIEs felt
pressed
to
explore
trading
inter-
ests.
Taking
the
lead,
the
Malaysian
Mohammed
proposed
Group
(EAEG) consisting
the ASEAN
countries,
the Asian
NIEs,
China
and
Japan.41
As
for intra-Asian
trade,
investment and col-
policy.
What
Malaysia
a
counterweight
to
perceived
bloc formation in
Europe
and North
America. The United
States, Canada,
were
pointedly
excluded.
The EAEG
proposal
part
of China42
and
Korea; however,
Japan
reluctant
actually
trading
bloc,
the
Japanese
seemed
unwilling
was
threatening
to
spread
across
Europe
and
part
was
vigorously opposed
41
Tan,
Toh and
Low,
Co-operation,' pp.
325-8.
42
Nations', Beijing
Review
(20-26 January
1992),
pp.
7-8.
43I 43I 43I
to the
Malaysian proposal, partly
because of a
long-standing
irritation
with Dr Mahathir's
provocative foreign policy posturing,
but
mainly
out of concern that an exclusivist East Asian economic
grouping
could
'divide the Pacific
region
in half.'43
In the
event,
it was the
antipathy
of other ASEAN members that
thwarted the EAEG
proposal.
The motivation and
purpose
behind
the
Malaysian
initiative was
questioned.
Thailand and Indonesia
came out
strongly against
an exclusivist and inward-oriented
trading
arrangement. Opposition among
the ASEAN
governments,
doubtless
bolstered
by
the stance of the
US,
resulted in the
Malaysian
EAEG
proposal being
shelved-at least for the time
being-in
favour of a
seemingly
more
benign
and
acceptable
notion of an East Asian Eco-
nomic Caucus
(EAEC).
The modified
proposal
for an EAEC
envisaged
an informal consult-
ative mechanism
embracing
ASEAN,
the Asian
NIEs,
China and
Japan
for
purposes
of
policy discussions,
information
sharing,
and
consensus
building
on trade and economic matters. The
US, Canada,
Australia and New Zealand would still be excluded.
Malaysia,
the
leading champion
of the
EAEC,
maintains that the Caucus would
function in a manner consistent with the
GATT,
ASEAN and APEC.
Other
governments
in the
region
have so far been
hesitant,
even
reluctant,
to take
up
the EAEC
concept.
The United States remains
steadfastly opposed
to
any exclusionary arrangement
in
Asia,
although
the Clinton administration indicated a
softening
in its reac-
tion to a
strictly
consultative forum.
The
I992
ASEAN Summit
acknowledged
that an EAEC could
serve as a useful deliberative
forum,
while
reaffirming support
for
APEC as the main arena for
regional
economic
policy
discourse.
Agreement
was
subsequently
reached at the
I993
ASEAN ministerial
meeting
in
Singapore
on a
compromise solution, by
which the EAEC
would be
configured
as
sub-grouping
of a wider
APEC,
linked also
to the ASEAN Economic Ministers
Meeting.
It remains to be
revealed how and to what extent such an EAEC could
expedite pro-
gress
towards economic
cooperation among
Asian
countries,
and
where such a mechanism would
fit,
if at
all,
within the APEC frame-
work.
Japan
and Korea do not seem keen to take
part
in an EAEC
sub-grouping,
lest this
give
offense to the Americans.
In its essentials the EAEC
proposal
confronts Asian countries with
a choice between the alternative of a
geographically
exclusivist
to the
because of a
long-standing
irritation
with Dr Mahathir's
but
mainly
grouping
could
'divide the Pacific
region
in half.'43
In the
event,
it was the
antipathy
thwarted the EAEG
proposal.
The motivation and
purpose
behind
the
Malaysian
initiative was
questioned.
came out
strongly against
trading
the ASEAN
governments,
doubtless
bolstered
by
the stance of the
US,
resulted in the
Malaysian
EAEG
proposal being
being-in
favour of a
seemingly
more
benign
and
acceptable
nomic Caucus
(EAEC).
The modified
proposal
for an EAEC
envisaged
ative mechanism
embracing
ASEAN,
the Asian
NIEs,
China and
Japan
for
purposes
of
policy discussions,
information
sharing,
and
consensus
building
US, Canada,
Malaysia,
the
leading champion
of the
EAEC,
GATT,
ASEAN and APEC.
Other
governments
in the
region
have so far been
hesitant,
even
reluctant,
to take
up
the EAEC
concept.
steadfastly opposed
to
in
Asia,
although
softening
in its reac-
tion to a
strictly
consultative forum.
The
I992
ASEAN Summit
acknowledged
that an EAEC could
forum,
while
reaffirming support
for
regional
economic
policy
discourse.
Agreement
was
subsequently
reached at the
I993
ASEAN ministerial
meeting
in
Singapore
on a
which the EAEC
would be
configured
as
sub-grouping
of a wider
APEC,
linked also
Meeting.
It remains to be
expedite pro-
gress
towards economic
cooperation among
Asian
countries,
and
fit,
if at
all,
work.
Japan
part
in an EAEC
sub-grouping,
lest this
give
proposal
geographically
exclusivist
to the
because of a
long-standing
irritation
with Dr Mahathir's
but
mainly
grouping
could
'divide the Pacific
region
in half.'43
In the
event,
it was the
antipathy
thwarted the EAEG
proposal.
The motivation and
purpose
behind
the
Malaysian
initiative was
questioned.
came out
strongly against
trading
the ASEAN
governments,
doubtless
bolstered
by
the stance of the
US,
resulted in the
Malaysian
EAEG
proposal being
being-in
favour of a
seemingly
more
benign
and
acceptable
nomic Caucus
(EAEC).
The modified
proposal
for an EAEC
envisaged
ative mechanism
embracing
ASEAN,
the Asian
NIEs,
China and
Japan
for
purposes
of
policy discussions,
information
sharing,
and
consensus
building
US, Canada,
Malaysia,
the
leading champion
of the
EAEC,
GATT,
ASEAN and APEC.
Other
governments
in the
region
have so far been
hesitant,
even
reluctant,
to take
up
the EAEC
concept.
steadfastly opposed
to
in
Asia,
although
softening
in its reac-
tion to a
strictly
consultative forum.
The
I992
ASEAN Summit
acknowledged
that an EAEC could
forum,
while
reaffirming support
for
regional
economic
policy
discourse.
Agreement
was
subsequently
reached at the
I993
ASEAN ministerial
meeting
in
Singapore
on a
which the EAEC
would be
configured
as
sub-grouping
of a wider
APEC,
linked also
Meeting.
It remains to be
expedite pro-
gress
towards economic
cooperation among
Asian
countries,
and
fit,
if at
all,
work.
Japan
part
in an EAEC
sub-grouping,
lest this
give
proposal
geographically
exclusivist
43
'Block
Politics,'
(28
November
I99I),
p.
26.
43
'Block
Politics,'
(28
November
I99I),
p.
26.
43
'Block
Politics,'
(28
November
I99I),
p.
26.
432 432 432
approach
to
regional
economic
integration,
with the EAEC as a
pos-
sible
precursor
to a
EAEG,
as
against
the more
open,
outward-
oriented
arrangement
for wider
regional
economic
cooperation
exem-
plified by
APEC.
Already,
economic neo-nationalists in the Asian
NIEs,
China and
ASEAN,
and
especially
in
Malaysia,
are
inviting
reconsideration of the EAEG
concept
in
response
to what
they
see as
the US and Canadian abandonment of Asia in favour of a more
protectionist hemispheric realignment
in the
Americas,
epitomized
by
NAFTA.44 If the APEC ideal of
open regionalism
should flounder
on the shoals of
discriminatory
and
diversionary
trade
policies,
it is
possible
or even
likely
that the exclusivist and inward-oriented EAEG
alternative,
or
something
akin to
it,
may re-emerge
as a
politically
attractive
option
for vulnerable East and Southeast Asian countries.
The ASEAN Free Trade Area
Although
the
I991
meeting
of ASEAN economic ministers deferred
the
Malaysian proposal
for an
EAEG,
it did
agree
to a counter-
proposal
from Thailand
calling
for the creation of an ASEAN free
trade area for manufactures over a
fifteen-year
time horizon. The
AFTA
agreement
was
subsequently
endorsed
by
the
I992
ASEAN
Summit,
and will transform ASEAN from a
loosely-knit
forum for
policy dialogue
and coordination into an institutional mechanism for
trade liberalization.45 AFTA aims to combine the six
relatively
small
and vulnerable Southeast Asian economies into a wider market of
some
330
million
people, generating
an
aggregate
Gross Domestic
Product of some
US$293
billion and
growing
at
7%
a
year
in real
terms. The creation of a more
closely-integrated
AFTA market is
expected
to attract new external investment to the
region
in
response
44 Advocates of North American free trade
deny
that NAFTA need become a
protectionist bloc,
and some indeed see it as
potentially becoming
a
regional pillar
of
multilateralism,
as a
counterpart
to APEC for the Americas: H. Edward
English
and
Murray
G.
Smith,
'NAFTA and Pacific
Partnership: Advancing
Multilat-
eralism?' in
Bergsten
and Noland
System.
45
On the evolution of ASEAN economic
cooperation,
see Martin
Rudner,
'ASEAN,
Co-operation,
and
Hemispheric
Free Trade for the
Americas,'
pp. 141-3;
Ronald Palmer and Thomas
Reckford, Building
ASEAN. 20
Years
of
Southeast Asian
Cooperation,
New
York, Praeger, I987; John Wong,
ASEAN
Economies in
Perspective, London, Macmillan, 1979; Marjorie Suriyamongkol,
The Polit-
ics
of
ASEAN Economic
Cooperation,
Oxford
University Press, 1988.
approach
to
regional
economic
integration,
with the EAEC as a
pos-
sible
precursor
to a
EAEG,
as
against
the more
open,
outward-
oriented
arrangement
for wider
regional
economic
cooperation
exem-
plified by
APEC.
Already,
NIEs,
China and
ASEAN,
and
especially
in
Malaysia,
are
inviting
concept
in
response
to what
they
see as
in the
Americas,
epitomized
by
open regionalism
should flounder
on the shoals of
discriminatory
and
diversionary
trade
policies,
it is
possible
or even
likely
alternative,
or
something
akin to
it,
may re-emerge
as a
politically
attractive
option
Although
the
I991
meeting
the
Malaysian proposal
for an
EAEG,
it did
agree
to a counter-
proposal
from Thailand
calling
fifteen-year
time horizon. The
AFTA
agreement
was
subsequently
endorsed
by
the
I992
ASEAN
Summit,
loosely-knit
forum for
policy dialogue
relatively
small
some
330
million
people, generating
an
aggregate
Gross Domestic
Product of some
US$293
billion and
growing
at
7%
a
year
in real
closely-integrated
AFTA market is
expected
region
in
response
deny
protectionist bloc,
a
regional pillar
of
multilateralism,
as a
counterpart
English
and
Murray
G.
Smith,
'NAFTA and Pacific
Multilat-
eralism?' in
Bergsten
and Noland
System.
45
cooperation,
see Martin
Rudner,
'ASEAN,
Co-operation,
and
Hemispheric
Free Trade for the
Americas,'
pp. 141-3;
Reckford, Building
ASEAN. 20
Years
of
Southeast Asian
Cooperation,
New
ASEAN
Economies in
The Polit-
ics
of
ASEAN Economic
Cooperation,
Oxford
approach
to
regional
economic
integration,
with the EAEC as a
pos-
sible
precursor
to a
EAEG,
as
against
the more
open,
outward-
oriented
arrangement
for wider
regional
economic
cooperation
exem-
plified by
APEC.
Already,
NIEs,
China and
ASEAN,
and
especially
in
Malaysia,
are
inviting
concept
in
response
to what
they
see as
in the
Americas,
epitomized
by
open regionalism
should flounder
on the shoals of
discriminatory
and
diversionary
trade
policies,
it is
possible
or even
likely
alternative,
or
something
akin to
it,
may re-emerge
as a
politically
attractive
option
Although
the
I991
meeting
the
Malaysian proposal
for an
EAEG,
it did
agree
to a counter-
proposal
from Thailand
calling
fifteen-year
time horizon. The
AFTA
agreement
was
subsequently
endorsed
by
the
I992
ASEAN
Summit,
loosely-knit
forum for
policy dialogue
relatively
small
some
330
million
people, generating
an
aggregate
Gross Domestic
Product of some
US$293
billion and
growing
at
7%
a
year
in real
closely-integrated
AFTA market is
expected
region
in
response
deny
protectionist bloc,
a
regional pillar
of
multilateralism,
as a
counterpart
English
and
Murray
G.
Smith,
'NAFTA and Pacific
Multilat-
eralism?' in
Bergsten
and Noland
System.
45
cooperation,
see Martin
Rudner,
'ASEAN,
Co-operation,
and
Hemispheric
Free Trade for the
Americas,'
pp. 141-3;
Reckford, Building
ASEAN. 20
Years
of
Southeast Asian
Cooperation,
New
ASEAN
Economies in
The Polit-
ics
of
ASEAN Economic
Cooperation,
Oxford
433 433 433
to
opportunities
for increased economies of
scope
and scale in a
high-
growth
market of
370
million
by
the end of this
century.
The
impact
of AFTA in
attracting
direct investment to ASEAN
might help
offset
to some extent
any
diversion of
capital
flows to the
hemispheric
free
trade area in the Americas.
According
to
plan,
AFTA will come into
being gradually
over a
fifteen-year transition,
during
which a Common Effective Preferential
Tariff
(CEPT)
will be enacted at
progressively
reduced
rates,
along
two
tracks,
'normal' and 'fast.'46
Although
details of the new CEPT
schedules have not
yet
been
clarified,
the
agreement
allows for a
differential
dismantling
of
existing
tariffs at
varying
rates for different
countries. Each ASEAN
country
will determine the
composition
of
its own liberalization
program.
Thus, Malaysia
and
Singapore
made
immediate cuts in some
tariffs,
but Indonesia and Thailand will
only
begin reducing
their tariffs in
1998.
Trade liberalization under the AFTA
agreement
is
expected
to be
limited to
particular
industrial sectors. Scheduled tariff reductions
will
apply
to
intra-regional exports
of manufactured
goods only
(provided they
have
40%
ASEAN
content,
at
least).
Trade in
agricul-
tural
products, unprocessed
raw materials or services will not be
covered. Even within its areas of
coverage,
the
agreement
is
hedged
with
exemptions
for 'sensitive'
products.
Moreover,
there are
gener-
ous
provisions
for
opting-out,
and for
safeguard
actions. Non-tariff
barriers are not
addressed,
nor are there clear
procedures
for
dispute
settlement.
Nevertheless,
despite
these
gaps
and
weaknesses,
AFTA
signals
the intention of ASEAN
governments
to achieve a more
closely-knit
structure of
(sub-) regional
economic
integration.
While
AFTA aims to cater to the
increasingly
mature
export
structure of
the ASEAN
the exclusion of such
important
elements as financial services and
agricultural
commodities will
doubtless detract from the effectiveness of
at the
sub-regional
Southeast Asian level.
While AFTA
represents
a modest but
meaningful step
forward
along
the
path
to ASEAN economic
cooperation, implementation
of
the CEPT remains
vulnerable, nevertheless,
to
protectionist pressures
from within each
country.47
Tensions between trade liberalization
46
The
'special'
fast track list includes
cement,
ceramic and
glass products,
chem-
icals,
copper cathodes, electronics, fertilizers,
furniture
(wooden
and
rattan), jewel-
lery
and
gems, pharmaceuticals, plastics, pulp,
rubber
products,
and
textiles;
Aus-
tralia's Business
Challenge, p. 69.
47
On the
gap
between rhetoric and
policy practice
as
regards AFTA,
see 'Market
or
Mirage,'
(15 April 1993),
pp.
48-50.
to
opportunities
scope
and scale in a
high-
growth
market of
370
million
by
the end of this
century.
The
impact
of AFTA in
attracting
might help
offset
to some extent
any
diversion of
capital
flows to the
hemispheric
free
According
to
plan,
AFTA will come into
being gradually
over a
during
Tariff
(CEPT)
will be enacted at
progressively
reduced
rates,
along
two
tracks,
Although
schedules have not
yet
been
clarified,
the
agreement
allows for a
differential
dismantling
of
existing
tariffs at
varying
rates for different
country
will determine the
composition
of
program.
Thus, Malaysia
and
Singapore
made
tariffs,
only
begin reducing
their tariffs in
1998.
agreement
is
expected
to be
limited to
particular
will
apply
to
of manufactured
goods only
(provided they
have
40%
ASEAN
content,
at
least).
Trade in
agricul-
tural
coverage,
the
agreement
is
hedged
with
exemptions
for 'sensitive'
products.
Moreover,
there are
gener-
ous
provisions
for
opting-out,
and for
safeguard
actions. Non-tariff
barriers are not
addressed,
nor are there clear
procedures
for
dispute
settlement.
Nevertheless,
despite
these
gaps
and
weaknesses,
AFTA
signals
governments
to achieve a more
closely-knit
structure of
(sub-) regional
economic
integration.
While
increasingly
mature
export
structure of
the ASEAN
important
agricultural
commodities will
at the
sub-regional
While AFTA
represents
a modest but
meaningful step
forward
along
the
path
to ASEAN economic
of
the CEPT remains
to
from within each
country.47
46
The
'special'
cement,
ceramic and
glass products,
chem-
icals,
furniture
(wooden
and
rattan), jewel-
lery
and
rubber
products,
and
textiles;
Aus-
tralia's Business
Challenge, p. 69.
47
On the
gap
policy practice
as
regards AFTA,
see 'Market
or
Mirage,'
(15 April 1993),
pp.
48-50.
to
opportunities
scope
and scale in a
high-
growth
market of
370
million
by
the end of this
century.
The
impact
of AFTA in
attracting
might help
offset
to some extent
any
diversion of
capital
flows to the
hemispheric
free
According
to
plan,
AFTA will come into
being gradually
over a
during
Tariff
(CEPT)
will be enacted at
progressively
reduced
rates,
along
two
tracks,
Although
schedules have not
yet
been
clarified,
the
agreement
allows for a
differential
dismantling
of
existing
tariffs at
varying
rates for different
country
will determine the
composition
of
program.
Thus, Malaysia
and
Singapore
made
tariffs,
only
begin reducing
their tariffs in
1998.
agreement
is
expected
to be
limited to
particular
will
apply
to
of manufactured
goods only
(provided they
have
40%
ASEAN
content,
at
least).
Trade in
agricul-
tural
coverage,
the
agreement
is
hedged
with
exemptions
for 'sensitive'
products.
Moreover,
there are
gener-
ous
provisions
for
opting-out,
and for
safeguard
actions. Non-tariff
barriers are not
addressed,
nor are there clear
procedures
for
dispute
settlement.
Nevertheless,
despite
these
gaps
and
weaknesses,
AFTA
signals
governments
to achieve a more
closely-knit
structure of
(sub-) regional
economic
integration.
While
increasingly
mature
export
structure of
the ASEAN
important
agricultural
commodities will
at the
sub-regional
While AFTA
represents
a modest but
meaningful step
forward
along
the
path
to ASEAN economic
of
the CEPT remains
to
from within each
country.47
46
The
'special'
cement,
ceramic and
glass products,
chem-
icals,
furniture
(wooden
and
rattan), jewel-
lery
and
rubber
products,
and
textiles;
Aus-
tralia's Business
Challenge, p. 69.
47
On the
gap
policy practice
as
regards AFTA,
see 'Market
or
Mirage,'
(15 April 1993),
pp.
48-50.
434 434 434
and domestic
protectionism
reflect a
deeper,
more
profound strategy
question confronting
the ASEAN
countries,
requiring
that
they
decide
between two alternative courses of action. One
approach
would be to
manage
trade so as to
respond
to the
protective
instincts of economies
having
similar factor endowments that make them direct
competitors
in
many
areas of trade. This
protectionist impulse
would
invariably
lead to
inward-oriented, economically
nationalistic and
regionally
exclusivist solutions. The other course of action would address the
commanding imperative
to create an
expanded
framework for trade
in order to sustain current
high
levels of investment and economic
growth.
Calls for the creation of
self-centered, trade-diversionary
sub-
regional groupings
denote,
in
effect,
a defensive
response
to
perceived
protectionist
and
discriminatory
tendencies in
managed
trade and
bloc formation elsewhere.
Yet, any
shift towards more extensive reli-
ance on
managed
trade risks
rending
the seamless fabric of the multi-
lateral
trading system,
and would
inevitably
militate
against
the
smaller, weaker,
more vulnerable economies. The ASEAN
experience
itself demonstrates how
can sustain an out-
ward-oriented
trading
framework that
complements
rather than dis-
places
the multilateral
system.
Were AFTA to become a means of
expediting
the
opening
domestic markets to international trade and
investment,
its trade creation effects would
help
stimulate economic
innovation and
efficiency
in the ASEAN
economies,
enhancing
their
dynamic competitive advantages.
It remains to be seen whether the
ASEAN
governments
will choose to utilize AFTA as a vehicle for
sub-regional protectionism,
or will AFTA be wielded as a lever to
accelerate trade liberalization in Southeast Asia in
congruence
with
an
open,
outward-oriented
APEC,
and in
conformity
with the
prin-
ciples
of the multilateral
trading system.
Asia Pacific
Regional Integration
and Multilateralism
Intra-regional
trade continues to
expand strongly
in East and South-
east Asia and across the
Pacific,
as an
accompaniment
to economic
growth,
and
contributing
to that
growth
and
gaining
from it. If the
Asia Pacific
region
is to maintain its economic
dynamism,
it behooves
all the countries concerned to
cooperate
and work
together
at
upholding
and even
accelerating
the
process
of trade liberalization
that has served them all so well.
and domestic
protectionism
reflect a
deeper,
more
profound strategy
the ASEAN
countries,
requiring
that
they
decide
approach
would be to
manage
trade so as to
respond
to the
protective
having
competitors
in
many
would
invariably
lead to
nationalistic and
regionally
to create an
expanded
framework for trade
high
growth.
sub-
regional groupings
denote,
in
effect,
a defensive
response
to
perceived
protectionist
and
discriminatory
tendencies in
managed
trade and
Yet, any
ance on
managed
trade risks
rending
lateral
trading system,
and would
inevitably
militate
against
the
smaller, weaker,
experience
can sustain an out-
ward-oriented
trading
framework that
complements
rather than dis-
places
the multilateral
system.
expediting
the
opening
investment,
help
stimulate economic
innovation and
efficiency
in the ASEAN
economies,
enhancing
their
ASEAN
governments
congruence
with
an
open,
outward-oriented
APEC,
and in
conformity
with the
prin-
ciples
of the multilateral
trading system.
Asia Pacific
and Multilateralism
Intra-regional
trade continues to
expand strongly
in East and South-
Pacific,
as an
accompaniment
to economic
growth,
and
contributing
to that
growth
and
gaining
from it. If the
Asia Pacific
region
dynamism,
it behooves
cooperate
and work
together
at
upholding
and even
accelerating
the
process
and domestic
protectionism
reflect a
deeper,
more
profound strategy
the ASEAN
countries,
requiring
that
they
decide
approach
would be to
manage
trade so as to
respond
to the
protective
having
competitors
in
many
would
invariably
lead to
nationalistic and
regionally
to create an
expanded
framework for trade
high
growth.
sub-
regional groupings
denote,
in
effect,
a defensive
response
to
perceived
protectionist
and
discriminatory
tendencies in
managed
trade and
Yet, any
ance on
managed
trade risks
rending
lateral
trading system,
and would
inevitably
militate
against
the
smaller, weaker,
experience
can sustain an out-
ward-oriented
trading
framework that
complements
rather than dis-
places
the multilateral
system.
expediting
the
opening
investment,
help
stimulate economic
innovation and
efficiency
in the ASEAN
economies,
enhancing
their
ASEAN
governments
congruence
with
an
open,
outward-oriented
APEC,
and in
conformity
with the
prin-
ciples
of the multilateral
trading system.
Asia Pacific
and Multilateralism
Intra-regional
trade continues to
expand strongly
in East and South-
Pacific,
as an
accompaniment
to economic
growth,
and
contributing
to that
growth
and
gaining
from it. If the
Asia Pacific
region
dynamism,
it behooves
cooperate
and work
together
at
upholding
and even
accelerating
the
process
435 435 435
436
MARTIN RUDNER
Now that a framework for
inter-governmental
consultations and a
comprehensive
work
program
has been
put
in
place, governments
have
begun
to
contemplate
the future architecture and thrust of
APEC. The new US administration and the new Australian Labour
Party government
of Prime Minister Paul
Keating
have
emerged
as
leading proponents
of an enhanced role for APEC in
promoting
closer
regional
economic
integration.
Be that as it
may, inter-governmental
meetings
of ministers and officials do
not,
of
themselves,
create trade.
Consultations
among governments may help
in
overcoming policy
and institutional
impediments
to international commerce. Trade
pro-
motion
organizations
and
knowledge
institutions like universities can
help expand
the horizons of business and
governments.48
Yet,
in the
last
analysis,
it is business that is the
engine
of trade and
investment,
and it is the business communities of the
participating
countries who
together represent
the
targets
of
regional
efforts at economic
cooperation.
Until
recently
there has been but minimal involvement of the
region's
business communities in APEC
meetings, Working Groups
and related activities. These remain
very largely
the
preserve
of offi-
cialdom. The APEC-V ministerial
meeting
in Seattle
provided
a first
opportunity
for
regional private
sector
participation
in a Business
Forum. It remains to be seen whether and to what extent the future
APEC
agenda
will include
provision
for a
non-governmental
role in
the
development
of
regional initiatives,
policy positions
and work
projects.
APEC
exemplifies
a
uniquely equalizing, plurilateral
forum for
international
policy
discourse. All
participating
countries,
including
economies at different
stages
of
development,
share
equal
access to
its fora. As APEC continues to evolve in
response
to
emergent
expectations,
this
plurilateral
dimension will tend to
empower
the
smaller,
weaker
participating
countries
through
the exercise of
group
leverage
or moral suasion on matters of shared concern vis a vis the
larger
economies in the
region.
This could have
far-reaching implica-
tions for trade
policy convergence
or
coordination,
not to
say
harmon-
ization,
across the Asia Pacific
region.
48
On the role of academic research in East and Southeast Asian
policy
reform
and trade
development,
see
Sylvia Ostry (ed.), Authority
and Academic Scribblers. The
Role
of
Research in East Asian
Policy Reform,
San Francisco: ICS Press for the Interna-
tional Center for Economic
Growth,
National Centre for
Development
Studies of
Australian National
University
and the Economic
Development
Institute of the
World
Bank, I99i.
436
MARTIN RUDNER
inter-governmental
consultations and a
comprehensive
work
program
has been
put
in
place, governments
have
begun
to
contemplate
Party government
Keating
have
emerged
as
leading proponents
promoting
closer
regional
economic
integration.
Be that as it
meetings
not,
of
themselves,
create trade.
Consultations
in
overcoming policy
and institutional
impediments
pro-
motion
organizations
and
knowledge
help expand
governments.48
Yet,
in the
last
analysis,
engine
of trade and
investment,
participating
countries who
together represent
the
targets
of
regional
efforts at economic
cooperation.
Until
recently
region's
very largely
the
preserve
of offi-
meeting
in Seattle
provided
a first
opportunity
for
regional private
sector
participation
in a Business
APEC
agenda
will include
provision
for a
non-governmental
role in
the
development
of
policy positions
and work
projects.
APEC
exemplifies
a
forum for
international
policy
discourse. All
participating
countries,
including
stages
of
development,
share
equal
access to
response
to
emergent
expectations,
this
plurilateral
empower
the
smaller,
weaker
participating
countries
through
the exercise of
group
leverage
larger
economies in the
region.
This could have
tions for trade
policy convergence
or
coordination,
not to
say
harmon-
ization,
region.
48
policy
reform
and trade
development,
see
Role
of
Policy Reform,
Growth,
National Centre for
Development
Studies of
Australian National
University
and the Economic
Development
Institute of the
World
Bank, I99i.
436
MARTIN RUDNER
inter-governmental
consultations and a
comprehensive
work
program
has been
put
in
place, governments
have
begun
to
contemplate
Party government
Keating
have
emerged
as
leading proponents
promoting
closer
regional
economic
integration.
Be that as it
meetings
not,
of
themselves,
create trade.
Consultations
in
overcoming policy
and institutional
impediments
pro-
motion
organizations
and
knowledge
help expand
governments.48
Yet,
in the
last
analysis,
engine
of trade and
investment,
participating
countries who
together represent
the
targets
of
regional
efforts at economic
cooperation.
Until
recently
region's
very largely
the
preserve
of offi-
meeting
in Seattle
provided
a first
opportunity
for
regional private
sector
participation
in a Business
APEC
agenda
will include
provision
for a
non-governmental
role in
the
development
of
policy positions
and work
projects.
APEC
exemplifies
a
forum for
international
policy
discourse. All
participating
countries,
including
stages
of
development,
share
equal
access to
response
to
emergent
expectations,
this
plurilateral
empower
the
smaller,
weaker
participating
countries
through
the exercise of
group
leverage
larger
economies in the
region.
This could have
tions for trade
policy convergence
or
coordination,
not to
say
harmon-
ization,
region.
48
policy
reform
and trade
development,
see
Role
of
Policy Reform,
Growth,
National Centre for
Development
Studies of
Australian National
University
and the Economic
Development
Institute of the
World
Bank, I99i.
ASIA PACIFIC ECONOMIC COOPERATION
437
Future initiatives
designed
to enhance the architecture of APEC
are
likely
to encounter
parallel
concerns that
regional trading
arrangements
be
openly
accessible,
of broad
coverage,
and
regionally
equitable. Looking
ahead,
APEC
may
well see fit to introduce its own
regional
mechanisms for trade conflict resolution and
problem-
solving,
in order to
complement
its framework
supporting
trade
creation. The
availability
of APEC trade conflict resolution and
policy-solving
mechanisms would enable vulnerable countries to
counteract
discriminatory
bilateral
arrangements
within the
region,
at
least, by way
of
appealing
to a
readily accessible,
plurilateral
mech-
anism. As momentum is
gained,
the creative
synergy
of
plurilateral
economic
cooperation through
APEC
might perhaps provide
a
telling
example
of the
compatibility
between national
development object-
ives, regional
economic
integration
and the maintenance of an
open,
non-discriminatory
multilateral
trading system.
437
Future initiatives
designed
are
likely
to encounter
parallel
concerns that
regional trading
arrangements
be
openly
accessible,
of broad
coverage,
and
regionally
equitable. Looking
ahead,
APEC
may
regional
problem-
solving,
in order to
complement
its framework
supporting
trade
creation. The
availability
policy-solving
counteract
discriminatory
bilateral
arrangements
within the
region,
at
least, by way
of
appealing
to a
readily accessible,
plurilateral
mech-
gained,
the creative
synergy
of
plurilateral
economic
cooperation through
APEC
a
telling
example
of the
compatibility
between national
development object-
ives, regional
economic
integration
open,
non-discriminatory
multilateral
trading system.
437
Future initiatives
designed
are
likely
to encounter
parallel
concerns that
regional trading
arrangements
be
openly
accessible,
of broad
coverage,
and
regionally
equitable. Looking
ahead,
APEC
may
regional
problem-
solving,
in order to
complement
its framework
supporting
trade
creation. The
availability
policy-solving
counteract
discriminatory
bilateral
arrangements
within the
region,
at
least, by way
of
appealing
to a
readily accessible,
plurilateral
mech-
gained,
the creative
synergy
of
plurilateral
economic
cooperation through
APEC
a
telling
example
of the
compatibility
between national
development object-
ives, regional
economic
integration
open,
non-discriminatory
multilateral
trading system.

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