APEC faces choice: Reform or perish, analysts say

APEC faces choice: Reform or perish, analysts say

Elisia Yeo, Agence France-Presse/Busan, South Korea

Long-haunted by accusations of irrelevance, the Asia Pacific
Economic Cooperation (APEC) forum has reached a critical point
where it must reform or fade into history, analysts say.

The 21 APEC members, countries or territories bordering the
Pacific Ocean, are meeting here this week to see how far APEC's
free trade agenda has come since the group's launch in 1989.

The group's aim is to ensure free trade and investment among
members, but the agenda has become increasingly driven by other
pressing global issues such as terrorism, security and public
health.

The influential Australia-based Lowy Institute for
International Policy has released a report warning that APEC is
"balanced on the brink of terminal irrelevance".

The report says APEC has become a bloated organization with
too many members. It says the group's goals are confused and that
its agenda, which includes 230 projects, is far too wide.

"While APEC is important to the international interests of
some of its members, for others it is peripheral at best," said
the report, issued ahead of this week's meetings in the South
Korean port city of Busan.

"And for many in the middle, APEC only really comes into focus
at the time of the annual summit."

The report also said APEC was facing competition from other
regional groups including the newly-formed East Asia summit which
will bring together East Asia, Southeast Asia, New Zealand,
Australia and India for an inaugural meeting in Kuala Lumpur next
month.

"For many purposes China will prefer these East Asian forums
to APEC because they include neither (APEC members) the United
States nor Taiwan," said the report.

The key measure of APEC's progress lies in an agreement struck
in 1994 in Bogor, Indonesia, which has become the group's mission
statement.

The Bogor goals call for free and open trade and investment in
the Asia-Pacific region for developed economies by 2010 and for
developing economies by 2020.

But APEC commitments are non-binding and critics say the Bogor
goals have fallen by the wayside and been replaced by an
avalanche of bilateral and regional free trade agreements.

The private-sector APEC Business Advisory Council (ABAC),
which advises the organization, has demanded reform and a focused
return to regional trade liberalization.

"While we welcome the liberalization arising from these
agreements ... a proliferation of them can have perverse effects
of creating distortions and increasing the cost of doing
business," ABAC said in an open letter to APEC's current
chairman, South Korean President Roh Moo-hyun.

However APEC officials insist the group is still on track.

APEC secretariat executive director Choi Seok-young said when
the group was conceived in 1989, average tariff levels among
members were 17.7 percent. By the end of 2004, the tariff average
was 5.5 percent.

"APEC has contributed a lot to this process," Choi told AFP.
"We believe that the Bogor goals are on track."

Ironically, the current stalemate in the Doha round of World
Trade Organization (WTO) talks has put the issue of free trade
back at the top of APEC's agenda this week.

APEC leaders, including U.S. President George W. Bush, are to
issue a strong statement after talks on Saturday urging all
countries involved in global trade talks to make concessions to
keep the Doha round alive.

This renewed emphasis on boosting multilateral trade, as well
the narrowing of its agenda, figures in the Lowy Institute's
prescriptions for APEC's salvation.

"APEC's role in support of the multilateral system will be
particularly important if the Doha round of WTO negotiations
fail," the report said.

The business leaders have also called on APEC to help unblock
global trade talks as a way to achieving the group's free trade
goals.

"It is our strongly held belief that nothing is more important
than this," said the ABAC open letter.