APEC smoothens process to become influential forum

APEC smoothens process to become influential forum

By Vincent Lingga

JAKARTA (JP): None of the 27 ministers from 12 countries who
gathered in Canberra on Nov.5-7, 1989 had expected the APEC forum
they just inaugurated to be so quickly transformed into the
substantial international institution it is today.

The three-page Joint Statement issued at the end of the
inaugural ministerial meeting of the Asia-Pacific Economic
Cooperation forum on Nov.7 did not even mention anything about
the structure of the next meeting.

Instead, what was most clearly stipulated in the Summary
Statement by the Chairman of the meeting, Australian Foreign
Minister Gareth Evans, was that the APEC process would simply be
a non-formal forum of exchanges of views among member economies.

But today, five years later, APEC has become an
institutionalized forum of 17 members (Chile will join as the
18th member during the 6th six ministerial meeting in Jakarta)
which accounts for more than 50 percent of the world's output and
trade.

The APEC process not only has been increasingly well
structured with a secretariat in Singapore but also has broadened
with an annual forum, and has expanded to include several
ministerial level meetings.

Evolution

The creation and evolution of APEC obviously should be
attributed to the energetic diplomacy of the Australian
government. In fact, it was the then Prime Minister Bob Hawke
who, in a speech in Seoul in January, 1989, first explicitly
raised the need for an Asia-Pacific forum of governments to
define more coherently the region's shared common interests and
to discuss barriers to trade within the region.

The right diplomacy and intense process of consultations
conducted by Mr. Hawke and his Foreign Minister Gareth Evans for
more than eight months finally succeeded in convincing the six
ASEAN members -- Brunei, Indonesia, Malaysia, the Philippines,
Singapore and Thailand -- and South Korea, Canada, the United
States, Japan and New Zealand of the merit of the concept.

Australia's early approach towards the ASEAN members was quite
effective in easing their initial reservations that the proposed
new forum might cut across ASEAN's structure and objectives and
could dilute its cohesion.

But there were several factors that helped to make the
situation in the late 1980s quite conducive to the concept of
Asia-Pacific cooperation.

Interdependent

o The economies of the Asia-Pacific region have become
increasingly interdependent, thereby creating a real need for
constructive dialog on their economic prospects and opportunities
and for closer cooperation to achieve shared objectives.

o Long before Prime Minister Hawke conceived the idea in
January, 1989, there had been building blocks for such a regional
forum informally developed by private forums. In the late 1960s,
academics of the region began a series of Pacific Trade and
Development (Paftad) conferences. Paftad was soon followed by the
Pacific Basin Economic Council (PBEC) which was set up by
businessmen.

But perhaps the most important private forum is the Pacific
Economic Cooperation Conference (PECC), founded in 1980 (its name
was changed to Pacific Economic Cooperation Council in 1992), as
this forum includes academics, businessmen and policy makers,
though in a private capacity.

PECC, which now has 20 national member committees, has
established task force fora and working groups to concentrate on
particular policy areas. They meet periodically, organize
seminars and workshops, conduct studies and publish their
conclusions and recommendations for the benefit of the Pacific
Community.

The Indonesian national committee for PECC is coordinated by
the Centre for Strategic and International Studies (CSIS) in
Jakarta.

o The 1980s saw increasing trade tensions with mounting trade
protectionism in various forms, while the Uruguay Round of
multilateral trade negotiations remained protracted by sharp
divisions of views and seemed to make little headway.

At the same time, there was an increasing tendency to drift
away from a non-discriminatory multilateral approach to trade
policies toward regional trading arrangements or blocs.

o There was fear that the European Community could lead to a
protectionist fortified Europe. Further increasing the concern
about the world being divided into regional trading blocs was the
imminent establishment of the North American Free Trade
Agreement.

o Another factor that supported the APEC concept was the
increasing degree of outward-looking economic policies of the
ASEAN countries. As these countries became increasingly dependent
on exports to spur their economic growth, they also became
greatly interested in striving for an open, free international
trading system.

Pragmatic

But the high sense of pragmatism applied to the evolution of
the APEC idea also made the cooperation concept much more
palatable to all potential members.

Right from the beginning, APEC has been designed to be a non-
formal forum of dialog, thereby opening its membership widely to
all countries in the region with intensive economic links. The
non-formality principle also avoided competition with the formal
structure of ASEAN and its meeting with its dialog partners.

The adherence to the principle of a multilateral trading
system further facilitated the APEC process because free trade is
the common interest of all members.

APEC's sense of pragmatism also could be seen in its selection
of areas of cooperation as the most appropriate focus of
attention covering trade liberalization, data networking on
economic data, investment, technology transfer and human resource
development and sectoral cooperation in tourism, energy, trade
promotion, environment and infrastructure.

The forum's recognition of the wide diversity of its members
also has played a greater role in facilitating a smooth (though,
to some analysts, a very slow) process of APEC.

Indeed, the APEC founding members represent almost all stages
of development known to economics theorists. It includes well-
developed countries such as the United States with a per capita
income of US$23,000 and Japan with $30,000, newly industrializing
ones such as Taiwan with $10,600 per capita and South Korea with
$7,000, and such developing nations like Indonesia with a per
capita income as low as $650.

Strengthened

The APEC process was further strengthened at its second
ministerial meeting in Singapore on July 29-31, 1990. At that
meeting, the ministers endorsed seven areas of cooperation which
became APEC's first work projects covering: exchanges of trade
and investment data, trade promotion, investment and technology
transfer, human resources, energy, marine resources and
telecommunications.

The Singapore meeting also further clarified principles for
the future participation of Taiwan, China and Hong Kong and
defined more clearly the meaning of regional trade
liberalization.

But the most remarkable progress was made at the third APEC
ministerial meeting in Seoul on Nov. 12-14, 1991 where for the
first time representatives of ministerial titles from China,
Taiwan and Hong Kong sat at the same table.

The Korean government, as the chair of the meeting, was highly
praised for its active diplomacy and excellent conduct of the
difficult negotiations that led to the admission of the three
major economies as new members of APEC.

The ministers adopted the Seoul Declaration which set forth
even clearer objectives, activities and broad organization of the
group, mode of operation, future participation.

The Seoul meeting also increased APEC's work projects by
three, covering transportation, tourism and fisheries. The ten
projects are now being implemented by ten working groups.

As APEC became a much more active, though informal,
organization with ten work projects, a need was increasingly felt
for some form of administrative support.

Institution

The work on the formal organization of APEC accelerated under
the chairmanship of Thailand as the hosts of the fourth
ministerial meeting in Bangkok on Sept.10-11, 1992.

The meeting adopted the Bangkok Declaration on APEC
Institutional Arrangements which formally established APEC as an
international organization, provided for a permanent secretariat
in Singapore and established budget and financial procedures.

APEC made a dramatic step in the process of its consultations
last year under the chairmanship of the United States at the
fifth ministerial meeting in Seattle on Nov. 17-19, which was
followed by the first informal forum of APEC leaders.

The forum admitted two new members, Mexico and Papua New
Guinea, and set up a a Committee on Trade and Investment, thereby
further increasing the forum's institutionalization.

The Economic Vision Statement, issued at the end of the
leaders meeting on Nov. 20 that sets in even more clear-cut terms
the future path of the forum in the region into a community of
shared interests, shared goals and shared commitments to a
mutually beneficial cooperation.

The forum called for a meeting of APEC finance ministers which
was held in Honolulu in the middle of March, 1994 and established
Pacific Business Forum to facilitate a more active participation
of the private sector in the development of business networks in
the region.

Now that the APEC process has been well structured and
institutionalized with at least two ministerial-level meetings
and an annual meeting, the forum is set to embark on concrete
programs of action to give more tangible economic benefits to the
region.