APEC institutionalization moving rapidly

APEC institutionalization moving rapidly

By Faisal Harahap

JAKARTA (JP): APEC will not be formally structured in the near
future, but the process of institutionalization within the
grouping is moving relatively fast.

The head of the Eminent Persons Group (EPG) Fred Bergsten did
not touch on the nature of APEC's organizational structure after
he submitted a report to President Soeharto last month.

He would only say that APEC should be an open, outward-looking
forum and not a closed, inward-looking one.

The report was prepared during the group's meeting last July
in Tokyo, in anticipation of the second APEC summit in Bogor in
November.

It was not clear whether the pace of APEC's
institutionalization was in the agenda of the group's meeting but
the group could not come out with a recommendation on that issue.
Either that was the case or the group perceived that, being a
forum, it would be irrelevant to look into the issue unless a
different sort of grouping for APEC had been decided upon.

To be sure, the organizational structure of APEC had been of
great concern to quite a number of countries and gained vast
coverage by the press in these countries.

When it was set up in 1989 in Canberra, it was agreed that
APEC should be a loose consultation forum. However, it became
more and more institutionalized as meeting at various levels
became regular and working groups, committees, as well as the
Singapore-based secretariat were established.

Furthermore, the EPG recommended the formation of a dispute
settlement mechanism, to be named Dispute Mediation Service,
similar to what is being established by the would-be World Trade
Organization.

The recent Senior Officials Meeting in Yogyakarta agreed to
enhance the ad-hoc status of the Group on Economic Trends and
Issues to a permanent committee.

A third APEC summit has been planned for Tokyo next year, and
should be preceded by several EPG meetings, a number of Senior
Official Meetings and at least one Ministerial Meeting. A
Ministerial Meeting will be held in Jakarta on Nov.11-12 to wrap
up issues and recommendations for the Bogor summit, which might
be succeeded by a Finance Ministers Meeting sometime next year.

Aside from the EPG, there already exists the Working Group on
Trade Promotion and the Working Group on Small Scale Enterprises.
A Special Committee on Trade and Investment as well as a Budget
and Administrative Committee had been formed.

Business groups and organizations of the region set up the
Asia Pacific Business Network, called the APB-Net.

Heads of governments agreed in their first summit in Seattle
last November that the trade and investment potential in the
region could best be exploited through harmonizing customs
practices, investment procedures as well as product tests and
standards among APEC members.

While the developed member nations of APEC seemed impatient in
turning the Asia Pacific rim into their export and investment
outlet, the less developed countries wanted assurances that the
various propositions put forward by the other side would not
adversely affect the growth of their economies.

A hasty inception of a trade and investment liberalizing
ghost, and one applying to promotions as well, would necessarily
include a predetermined organizational structure separate from
the pace of the development of activities in the field. This lead
to reservations on the part of the less developed countries in
accepting anything related to the organizational structure of
APEC.

Australian Foreign Minister Garth Evans expressed his
country's wish when he was in Bangkok last July to upgrade APEC
from its current loose economic grouping to a regional vehicle to
free trade. No mention, however, was made as to how it should or
could be done and as to what sort of organizational structure of
APEC would be most conducive in achieving such a goal. Nor was it
mentioned whether APEC should be pre or post-Uruguay.

Australian newspapers were somewhat critical when they found
out last August that the EPG was not without proponents of a
trade bloc similar to the North America Free Trade Agreement and
the European Community. One important thing contained in the
group's report, which Bergsten might have forgotten to reveal in
his meeting with the press here, was a recommendation to allow
member countries to individually decide offering free trade
concessions to a non-participant country on a reciprocal basis.

Malaysia was worried on APEC becoming a ploy by the larger
western countries to control the economies of the smaller Asian
countries. Malaysian ministers voiced opposition to APEC because
no one could guarantee that APEC would not be structured in a
formal way. This, they said, could lead to a formally structured
APEC issuing guidelines and procedures which would dilute, or at
least weaken, ASEAN and its closely related AFTA, to the
detriment of ASEAN economies.

While continuing to voice critical words about APEC, they
seized every opportunity available to promote East Asia Economic
Caucus.

Philippines seemed to be the most aggressive and took a bold
thrust by proposing to establish an Asia-Pacific grouping called
the Community of Asia-Pacific Nations. Formation of the community
was put forward to President Soeharto by President Fidel Ramos
when the latter visited Jakarta in September last year. No
political ingredients of the idea were mentioned but the
community, as the proposal stood, would be set up in a so-called
New Bandung Conference sometime next year.

President Ramos had also raised this issue on the occasion of
the Pacific Basin Economic Council Meeting in Seoul last May.
Indonesia showed no interest in the creation of the political
monster, and no follow-up gathering to discuss the proposal had
been organized so far.

Thailand and Indonesia decided to ride the waves with extreme
caution, believing that member countries could still benefit from
APEC if the forum was not to be exploited beyond the necessary
needs and not structured beyond the necessary format.

Nothing very special had been heard from Thailand yet, but
President Soeharto seized the opportunity when he opened the so-
called Indonesia, Asia Pacific and the New World Order Meeting in
August last year in Bali. This meeting was to stress that APEC
should in no way become a trade bloc because the agreed
principles for developing cooperation among members were based on
the mutual benefit of each individual country.

At the time when his colleague, Finance Minister Mar'ie
Muhammad, was attending the first APEC Finance Ministers Meeting
in Honolulu, Foreign Minister Ali Alatas made it clear in Jakarta
last March that ASEAN was not opposed to formalizing APEC.
However, he added that institutionalizing the forum should not be
done hastily. APEC, Alatas contended, should become an
organization equipped with a secretariat and a codified set of
rules and procedures in a gradual way like ASEAN. He was careful
to add that it should only be a forum for consultations for the
time being.

The United States government seemed to have fully understood
the aspirations of some of the ASEAN countries and could accept
their positions. The U.S. Ambassador Robert Barry revealed his
government's stance on the issue late last month in Jakarta,
saying his country preferred maintaining APEC as a loose non-
formal organization in view of the diverse economies and cultures
of its member countries.

In a nutshell, one should not expect the upcoming Bogor summit
to endorse initiatives for the establishment up of a formal
organizational structure of APEC. On the other hand, no one could
stop the ongoing institutionalization process within APEC through
the scheduling of more regular meetings, formation of additional
working groups and committees, as well as setting up of
principles, guidelines, rules, and procedures, etc.

By the way, APEC already has its executive director and
secretariat.

The writer is a civil servant.

Window: One should not expect the upcoming Bogor summit to endorse
initiatives for the establishment up of a formal organizational
structure of APEC.