APEC should focus on capacity building

Zakki P. Hakim, The Jakarta Post, Jakarta

The Asia-Pacific Economic Cooperation (APEC) was told during a workshop to focus more on strengthening trade and investment facilities and economic and technology cooperation, rather than trade liberalization, to maintain its significance in today's globalized world.

"APEC can achieve real results by focusing more on capacity building and trade and investment facilitation," Indonesian Minister of Trade Mari E. Pangestu said during a workshop on APEC and Indonesia at the Crossroad. The workshop was held in Jakarta on Tuesday.

The workshop, held by the Ministry of Foreign Affairs, was expected to come up with a list of recommendations for the government ahead of a meeting of Asia-Pacific economic leaders in November in Busan, South Korea.

Participants also discussed if the non-binding and voluntary- based APEC, which started in 1989 as a gathering to boost trade among Pacific Rim nations, had lost its relevancy by tackling noneconomic issues such as terrorism and in the face of bilateral and regional free trade areas. Several APEC leaders have argued that with increased terrorist acts around the globe, business and security had become inseparable.

Mari said the grouping was still relevant because member countries could use the forum to talk about trade issues without having to participate in negotiations -- something that cannot be done in the World Trade Organization (WTO).

"The forum can address the increasing (trade) tension between the U.S. and China," she said, adding that the situation was similar to the tension between Japan and the U.S. in the early 1990s.

She said APEC could and should address the proliferation of bilateral and regional free trade agreements, helping its members form the FTAs.

APEC could also give a jolt to Pacific Rim leaders in pushing the ongoing Doha development round of negotiations at the WTO.

Mari said many countries had benefited from APEC's capacity building, pointing to Chinese government officials who learned a lot from the grouping before eventually moving to join the WTO. She added that Vietnam and Russia were going through the same experience.

Institute for Global Justice regionalism expert Alexander Chandra said the numerous international economic forums such as the ASEAN Free Trade Area, the WTO and APEC had caused confusion.

"The numerous forums and talks have caused confusion in practice. The government should prioritize one over the others; it should prioritize ASEAN," he said.

Observers have raised concern that Indonesia's ambition to pursue a larger role in various trade forums is not matched with an adequate number of trade diplomats and a strong international trade policy, and could pose a threat to the country's national interests.

APEC groups 21 economies from the Pacific Rim covering 2.6 billion people on four continents. The grouping accounts for 50 percent of the world's GDP of US$19.25 billion and 41 percent of the world's total trade.

In the past decade, exports rose 113 percent, or $2.5 trillion, while foreign direct investment soared 210 percent and GDP expanded by 33 percent for the entire region.