APEC meeting in Osaka a success
APEC meeting in Osaka a success
By Jusuf Wanandi
JAKARTA (JP): At the beginning of the year there was much apprehension about Japan's leadership in moving forward the APEC process of economic cooperation in the region. The meeting in Bogor in November 1994 was a great success, especially the setting of the trade liberalization target dates of 2010 and 2020. Blake Island, U.S., where the leaders had their first meeting and adopted the APEC vision, was an important beginning for the regional liberalization process.
APEC is at a crucial moment in laying down a road map on how to implement the Bogor targets of trade liberalization. It is not going to be an easy task. In addition, the Japanese government is weak because the coalition consists of parties that have always been opposed to each other. The media and many APEC governments were uncertain if the Japanese government could pull things together in Osaka.
Not only did the Japanese government produce an action agenda to be implemented at the 1997 APEC meeting in Manila, but it also strengthened the basic underpinnings of regionalism in the Asia- Pacific, including open regionalism, the equality of all members, and a step by step approach towards cooperation. Open regionalism refers to nondiscrimination among all APEC members and also towards non-members. The members see APEC as a part of world trade and do not want the Asia-Pacific to become a preferential trade area. APEC is therefore committed to world liberalization and supports the World Trade Organization.
That is why the APEC meeting in Manila, to be held next year just a few weeks before the first WTO Ministerial Meeting, will be important. APEC should push the WTO with an example of deeper and accelerated liberalization and by cooperating at the WTO Singapore meeting. Because APEC encompasses almost 50 percent of world trade, it can make a difference.
It was agreed at the Osaka meeting that the basis for regional trade liberalization is concerted and comparable unilateral efforts. This is the only feasible model for a region as heterogeneous as the Asia-Pacific. This has been the way the region's trade has been liberalized.
The U.S. has insisted on some criteria, including comparability and a review mechanism, but Osaka was successful because it was able to incorporate the interests and concerns of all APEC members.
The principle of equality refers to the benefit that cooperation should bring to all the members, as well as their role in the process of cooperation.
Besides non-discrimination in trade, the recognition that development and technical cooperation is an important pillar of APEC is vital for the developing members of APEC. Only through this pillar will developing economies be able to catch up with the developed nations and cooperate more fully in other efforts, including trade liberalization.
This area of cooperation must still be more fully worked out. Here, the idea of small and specific advisory teams might be necessary. Some proposals, based on developing common policy concepts, implementing joint activities and engaging in policy dialogue, have been agreed on.
A special effort from the Japanese is the proposal called "Partners for Progress". The proposal focuses on economic and technical cooperation programs that directly support the liberalization and facilitation of trade and investment.
The principle of evolution is the step by step approach based on consensus which is vital for a huge and diverse region like the Asia-Pacific. The results of Osaka showed the merit of this principle. It was an achievement due to the leadership of Japan and the goodwill and support of all members, especially the U.S.. Without the compromise and support of the U.S., that had insisted on reciprocity and a discriminatory approach as well as trade liberalization through negotiations, consensus would not have been possible. The result would have been the failure of the Osaka meeting. Indonesia's strong support was also important in achieving the action agenda at Osaka, especially its earlier achievements in Bogor.
The Osaka meeting achieved two other important matters. The first was the role of the APEC Business Advisory Council (ABAC), which is a follow-up of the Pacific Business Forum and will consist of at least two businesspeople from each APEC member to represent big and small business. As a government's appointed body, and given that there are active regional business organizations who have been around for much longer, namely the Pacific Basin Economic Council (1967) and the Pacific Economic Cooperative Council (PECC, 1980), it would be wise if the ABAC functioned as a clearing house for what the region's business councils and chambers have to contribute to regional economic cooperation. Otherwise ABAC will only function as an arm of government.
The idea that APEC should take up security issues is very dangerous because it could quickly kill APEC. In view of China- Taiwan relations, APEC taking up security issues is just not realistic. APEC has just begun to become a viable organization and already has a full plate to take care of.
Security issues, which are very sensitive and complex, cannot be brought into APEC's agenda. The ASEAN Regional Forum, a dialog institution on political security matters for the Asia-Pacific, was established by ASEAN two years ago to address these realities. The forum is intended to deal with these important issues because it is recognized that economic dynamism and cooperation will not adequately guarantee peace, stability and welfare in the region.
Matters concerning the environment, migration, labor relations, which have economic and security aspects, may be considered by APEC in the future. A preliminary PECC study would be wise because of the sensitivity and complexity of the issues. Cooperation between business, government officials and academics in PECC has allowed the formulation of successful policies on the most sensitive issues in the Asia-Pacific.
The writer is chairman of the Supervisory Board of the Centre for Strategic and International Studies (CSIS).