APEC's goals must be linked with GATT<\/p>\n
By Mohammad Sadli<\/p>\n
TAIPEI (JP): Take a glance at these terms: Level playing
\nfield, extraterritoriality, national treatment, convergence,
\nharmonization, gray areas, voluntary export restraints, rule-of-
\nreason and gradualism versus activism.<\/p>\n
If they sound strange, and you are uneasy about your
\nignorance, you should attend the meetings of the Trade Policy
\nForum of the Pacific Economic Cooperation Council (PECC), a
\ntripartite platform consisting of academics, government
\nofficials, in their private capacities, and businessmen.<\/p>\n
The PECC came into being in 1986, long before the Asia-Pacific
\nEconomic Cooperation (APEC) forum. This non-governmental
\norganization launched the idea of Pacific economic cooperation
\nand its academic elements from Australia, Japan, the United
\nStates and Canada, were early true believers. At one time they
\ndespaired because they could not get governments to take over the
\ninitiative, but in the end they succeeded in attracting Bob
\nHawke's interest. At that time Hawke was Australian prime
\nminister.<\/p>\n
The big breakthrough with APEC, however, came at Blake Island
\nin Seattle under U.S. President Bill Clinton. The Bogor meeting,
\nunder the leadership of President Soeharto, pushed the APEC
\nprocess further, through the institution of annual summits.<\/p>\n
This year the summit leadership is in Japanese hands. The
\ncountry is not known for strong political leadership, certainly
\nnot in international affairs. Hence, although the summits will
\ncontinue (in 1996 in Manila), the pace and vigor of the APEC
\nprocess can be expected to vary.<\/p>\n
Perhaps we should accept those uncertainties as facts of Asian
\nlife. Implications of the APEC vision also remain shrouded in
\nambiguity and ambivalence. Take the Seattle vision of APEC, as a
\ncommunity of Asia-Pacific economies for free trade based on open
\nregionalism, and the Bogor declaration, aiming at a balanced
\npackage of trade liberalization, facilitation, and development
\ncooperation. What does all that mean in operational terms?<\/p>\n
The idea of \"open regionalism\" is still debated. Whether it
\nmeans that the liberalization drive launched by the member
\ncountries is unilateral, voluntary and always on an unconditional
\nMost Favored Nation basis, or that non-APEC countries, or
\nregional blocs, should reciprocate.<\/p>\n
Even within the Pacific region, the U.S. always demands a
\nquid-pro-quo for access to its markets, for instance, from Japan
\nand China. On the other hand, developing countries with smaller
\neconomies, such as Indonesia, have undertaken unilateral
\nliberalization of their trade and investment regimes without
\nbothering reciprocity, convinced that the measure is good for
\nthemselves, and never mind third country \"fire riders\".<\/p>\n
There are two sentiments in the APEC process: the activists
\n(\"radicals\" according to the other group) and the gradualists,
\nwho prefer an evolutionary approach (\"bureaucratic slow trackers\"
\naccording to the other school).<\/p>\n
President Clinton, in the Seattle summit, and President
\nSoeharto, in the Bogor meeting, made good use of a new track or
\nchannel, which is outside the conventional bureaucratic channel
\ncontrolled by foreign (and perhaps economic) ministries, and
\nrelied on the \"sherpas\" (special officials directly reporting to
\nthe leaders), and the APEC Eminent Persons Group. In the
\npreparation of the Osaka summit in November 1995, it is not
\ncertain whether the Japanese leadership will be strong and
\ndetermined. At least, that is not the tradition in Japan.<\/p>\n
The gradualists or bureaucrats do not like to see APEC
\nbecoming a negotiation forum (in the process of forming a free
\ntrade regime). They also believe that APEC should not be
\ninstitutionalized, although the leaders have started the annual
\nsummits. APEC should not lead to a supra-national authority, as
\nin the case of the European framework. What the activists want is
\nnot so clear, but they believe that \"free and open trade\" for the
\nregion is to be pursued according the Bogor target of 2010 and
\n2020.<\/p>\n
Reports from the Osaka Senior Officials Meeting and a similar
\nspecial meeting held more recently in Singapore are not
\nencouraging. The bureaucrats have not been able to come up with
\nconcrete proposals for an action plan, apart from producing a
\ntable of major agenda points.<\/p>\n
The Eighth Trade Policy Forum of PECC, which gathered in
\nTaipei on April 21-April 22, tried to be helpful and came up with
\na compromise. It suggests that APEC be a new model of regional
\nintegration, quite different from the European Union and NAFTA.
\nIt is viewed as being a more flexible regional forum, suited to
\nthe realities of the Asia-Pacific, and will be called an Open
\nEconomic Association. Open -- meaning that it does not lead to
\ndiscrimination against non-members. Voluntary, and association
\nlike ASEAN -- meaning that its members do not cede sovereignty to
\nany supra-national regional institution.<\/p>\n
Unilateral liberalization will be stressed, but executed in a
\n\"concerted, coordinated or collective\" way by the members. For
\nthis, a monitoring mechanism is needed with \"peer pressure\", to
\nreinforce and encourage. Decision making is based on \"flexible
\nconsensus\", meaning that decisions are arrived at by consensus,
\nbut carried out by individual members flexibly, with respect to
\ntime, order of sequence, sectors and others.<\/p>\n
If that sounds pretty fuzzy, especially for western ears, it
\nis part of the Asian reality. Consensus was interpreted by
\nsomebody as intermediate between unanimity and majority. One
\nguest speaker favors the 18-x formula, meaning that if some
\nmember countries feel uncomfortable, they can opt out. But others
\nfeel strongly that a decision should be supported by all members,
\nwith the execution being flexible.<\/p>\n
Well, if the compromise proposals do not sound convincing in
\ntheir inner logic or practicality, at least the forum did not
\nchoose sides. The APEC process is still young and evolving, and
\npolitical resolutions are often fuzzy and ambiguous rather than
\nlogically neat. Such resolutions are also way stations in an
\nongoing and continuing evolution.<\/p>\n
A Korean luncheon speaker appealed to Japan to assert stronger
\nleadership in these international undertakings, and a Canadian
\nspeaker proposed that the \"middle powers\", such as Japan, Korea,
\nAustralia, Canada and Indonesia should concertedly play a
\nstronger role and not leave things to the large members such as
\nthe U.S. and China.<\/p>\n
APEC should have as its main objective the effective
\nimplementation of the GATT Uruguay Round, and then call for the
\nbeginning of a new round because many \"new issues\" are not yet
\npart of the completed round.<\/p>\n
Here the option for APEC is to just execute the Uruguay Round
\nfaithfully in an accelerated way, or go beyond it by \"deepening
\nand broadening\" the aims, for instance, establishing a free trade
\nregime in or within the region. The difference between \"in\" and
\n\"within\" the region may be essential in the eyes of the beholder
\n(open-plus-Most Favored Nation status or not).<\/p>\n
The Bogor declaration calls for a balanced package of three
\nobjectives: trade liberalization, facilitation and development
\ncooperation. What \"balance\" means is also ambiguous. But if trade
\nliberalization is still deemed difficult, perhaps firmer actions
\ncan be projected in the field of \"facilitation\" and \"development
\ncooperation\".<\/p>\n
According to some academics trade liberalization in the form
\nof reduction of tariffs and Non Tariff Barriers is not very
\nimportant any more because some nations, especially the
\nOrganization for Economic Cooperation and Development countries,
\nhave made much progress in the past. The schedule of further
\nliberalization is also already fixed in the outcome of the
\nUruguay Round.<\/p>\n
Hence APEC could concentrate on facilitation measures to
\npromote economic integration. Much positive sum gains can be
\nreaped from improving infrastructure for transportation and
\ncommunication, reducing uncertainties, establishing more
\neffective dispute settlement procedures, creating mutual
\nrecognition, or by harmonizing a gradually broader range of
\nproducts standards, regulations, procedures and qualifications.<\/p>\n
Development cooperation is popular with Japan, but its
\nrelation to bilateral aid, to the APEC multilateral and North-
\nSouth character, should be specified.<\/p>\n
Dr. Mohammad Sadli is a prominent economist and has served as
\ncabinet minister several times.<\/p>",
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