APEC vision contains ambiguities<\/p>\n
Advisers of Asia-Pacific Economic Cooperation have recently
\npresented their report that incorporates proposals to achieve
\nAPEC's vision to President Soeharto. Economist Hadi Soesastro
\ndiscovers ambiguities in this report that could have been
\navoided.<\/p>\n
JAKARTA (JP): It is useful, and perhaps, necessary for APEC to
\nhave a vision. A vision gives its participants a sense of
\ndirection, a sense of mission, and a basis for drafting a common
\nblueprint. Since November 1993, APEC has begun to develop a
\nvision of "free and open trade in the Asia Pacific". The region
\nshould be thankful to the Eminent Persons Group (EPG) for
\nrecommending this APEC vision in its First Report prepared for
\nthe APEC leaders and ministers meeting in Seattle.<\/p>\n
It is not clear whether this vision has been formally adopted
\nby APEC, but in their Economic Vision Statement the APEC leaders
\nsaid they "welcome the challenge ... to achieve free trade in the
\nAsia Pacific." This is sufficient to get the ball rolling. More
\nimportantly, the EPG was asked to continue with its task,
\nparticularly "to present more specific proposals on how the
\nrecommended long-term vision might be realized".<\/p>\n
The Second EPG Report, entitled "Achieving the APEC Vision",
\nhowever, is somewhat of a disappointment -- to put it mildly.<\/p>\n
Specifically, on the issue of achieving free and open trade in
\nthe Asia-Pacific, the Report failed to come up with modalities
\nthat are unambiguously based on the idea of "open regionalism".
\nOpen regionalism is the formally accepted principle and approach
\nused by APEC and is shared by the many other regional processes
\nsuch as PECC (Pacific Economic Cooperation Council) and PBEC
\n(Pacific Basin Economic Council).<\/p>\n
On the basis of this principle, liberalization of trade and
\ninvestment in the region is to be pursued unilaterally as well as
\nin a concerted manner. It will be extended to the rest of the
\nworld on an unconditional MFN (most favored nation) basis. The
\nphilosophy behind this approach is that APEC's essential function
\nis to provide an environment to raise the confidence of its
\nmembers to further hasten their trade and investment
\nliberalization. The challenge that was entrusted upon the EPG was
\nto formulate strategies to develop this environment within APEC.<\/p>\n
The political consideration behind the concept of open
\nregionalism are, at least, twofold. First, in relation to APEC
\ninternally, negotiated liberalization within APEC is not feasible
\nand is clearly detrimental to confidence building in the region.
\nSecond, with regard to APEC's external relations, it is dangerous
\nto use the FTA (free trade area) or trading bloc game in
\ninternational trade diplomacy.<\/p>\n
The challenge that was entrusted to the EPG was to chart a
\nplan of action to liberalize trade in the region by taking into
\naccount these political constraints. Instead, while denying that
\nit is in favor of a Free Trade Area, the recommendations in the
\nEPG Report amount to establishing a Free Trade Area except for
\nnaming it so. More precisely, the Report has proposed the
\ncreation of a three-stage Free Trade Area: the first stage is a
\nfree trade area among APEC industrial members to be completed in
\n2010; the second stage is expanding the members to include APEC
\nNIE's (newly industrializing economies) to be completed in 2015;
\nand, the third and final stage to be realized in 2020 is its
\nfurther expansion to include all APEC developing members.<\/p>\n
Throughout this process, until its completion in 2020, trade
\ndiscrimination will be applied among APEC members. The
\nintroduction of new discrimination within APEC is clearly
\ndivisive. At any point in time, the APEC liberalization will be
\nextended to non-members on the basis of reciprocity. Non-member
\ndeveloping economies are favored but they too must meet
\nreciprocal obligations. Individual APEC members are free to
\nextend the benefit of its APEC liberalization on an unconditional
\nMFN basis.<\/p>\n
This is, however, a redundant statement and will not hide the
\nbasic fact that the adopted approach towards trade liberalization
\nis clearly that of FTA because it is essentially discriminatory
\n(conditional MFN). To deny this and, furthermore, to pursue this
\nwill make the exercise not only GATT-inconsistent but also GATT-
\nillegal. If APEC liberalization is not through FTA, thus not to
\nbe pursued by seeking approval under Article 24, it should also
\nnot require exemption from Article 1 of the GATT.<\/p>\n
The EPG could have avoided producing an ambiguous, confusing
\nreport by explicitly describing the different -- and opposing --
\noptions for achieving free trade in the region. It then could
\nexamine and make explicit the pluses and minuses of each option.
\nThis would have been more useful to policy and decision makers.
\nTo produce a "compromised advisory" on things that cannot be
\ncompromised is not helpful. In fact, if a compromise has to be
\nmade this is definitely the task of the decision makers
\nthemselves, namely our APEC leaders. If APEC policy and decision
\nmakers conclude that open regionalism cannot be made to guide
\nAPEC trade and investment liberalization they should go back to
\nthe drawing board and re-examine APEC's fundamental principle.<\/p>\n
Despite its deficiencies, the Second EPG Report still serves a
\nuseful purpose as its readers will be forced to ask further and
\ncritical questions on a number of its recommendations. In reading
\nthe Report it also becomes clear that APEC trade liberalization
\ncannot be seen and be pursued without giving due attention to
\ntrade and investment facilitation efforts as well as development
\ncooperation programs. These other two, of so-called "three
\npillars" of APEC are essential in promoting and creating
\nconfidence building measures in APEC and in the Asia Pacific
\nregion at large.<\/p>\n
APEC's 2020 Vision of free and open trade in the region can be
\nachieved through confidence building and workable, pragmatic
\nconsensus. If the eight principles that are contained in the
\nReport's Executive Summary are followed through to their logical
\nconsequence, the implementation of APEC trade and investment
\nliberalization can be pursued through the "soft path" rather than
\nthe "hard-path" which involve exhortations, application of
\nthreats, discrimination, and a lot of unproductive negotiations.<\/p>\n
The tasks immediately ahead for APEC's trade liberalization
\nefforts are to ensure the ratification of the Uruguay Round
\noutcome and the successful launching of the World Trade
\nOrganization (WTO). They should also push for the accelerated
\nimplementation of Uruguay Round liberalization by APEC members on
\nan unconditional MFN basis and ensure the entry of both China and
\nTaiwan to the WTO as founding members. Finally, APEC should
\nencourage the European Union to work constructively with Asia
\nPacific towards global liberalization. The best way to do so is
\nto lead by example, not needless confrontation.<\/p>\n
The writer is executive director of the Centre for Strategic
\nand International Studies, Jakarta.<\/p>\n
India -- Page 9<\/p>\n
Thailand, RP -- Page 11<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/apec-vision-contains-ambiguities-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }