Asia, Latin America move closer

By Jusuf Wanandi

SANTIAGO, Chile (JP): From Sept. 26 to Oct. 2, the 12th General Meeting of PECC (The Pacific Economic Cooperation Council) was held here for the first time.

It was the first important encounter to establish a partnership between Pacific Asia and Latin America. A lot of credit has to go to the Chilean chapter of PECC for the success of the meeting.

The host has not only taken the initiative to bring PECC to Latin America, but also to invite other Latin Americans to meet Pacific Asia members during the meeting.

In addition, several side activities were held before the meeting started which provided more opportunities for the development of bridges across the Pacific.

In this way Chile is performing a most laudable role as the gateway for Pacific Asia (East Asia and Australia, New Zealand) into Latin America. The partnership of Pacific Asia is not only timely, but is most important for both parts of the world, and for the world as a whole.

We are in a new era, not only because of the ending of the Cold War. The changes are more fundamental than even the Reformation or the Industrial Revolution, because they affect the entire globe, not only Europe, and because it is so basic and rapid at the same time.

This is the first time that such a combination of global, basic and rapid changes are happening in human history, and this is being called globalization for the lack of a better word, and has been mainly explained in economic terms.

But these changes are certainly more than in the economic or business realms alone. There is a new search for a new international order in the politico-security, economic and social realms as well as in terms of culture and values.

Every country or nation is affected by the change, sometimes willingly, at another time because there is no other choice, except if one allows one's own country's development and modernization to stagnate.

Even developed nations are going through the change and they have not always been capable of coping with these changes. People at the lower end and even of the middle class have become highly insecure about their future, and discontents have arisen in the body politic.

Their governments are often at a loss on how to cope with the dramatic changes caused by the globalization process.

This is all the more so with developing nations that are facing dramatic socio-economic changes, and are faced with real challenges of maintaining sustained growth and improving social justice.

In the political realm, the democratization process has brought about the quest for political reforms towards creating a civil society.

Other challenges include the changes of the indigenous culture and values system, and how to preserve a national identity in the face of those rapid changes. It is with these changes in mind that cooperation and partnership between Pacific Asia and Latin America have become all the more important.

A partnership between these two most dynamic parts of the world that consists mostly of developing nations, could contribute to the creation of a new global order that is more equitable to all the nations in the world.

Pacific Asia and Latin America have given the example of how developing nations can cooperate with the industrialized nations in a positive and constructive way regionally, namely through the Asia Pacific Economic Cooperation (APEC) for Pacific Asia, and the proposed Free Trade Agreement for the Americas (FTAA).

An important rationale for the partnership is the challenges of globalization faced by both regions. The realization on the part of East Asia of the importance of this challenge has increased recently due to the hiccups that they are experiencing following a period of sustained high rates of growth during the past decade. On its part, Latin America has moved along a dynamic growth path during the last five years or so.

This partnership has three main objectives. First, is in regard to their domestic development. Both parts are facing the same challenges and have to undertake domestic adjustments to be able to cope with them.

Both have had some experiences that they can share with each other. Pacific Asia can learn about political reforms and the opening up of the political system. Latin America on the other hand, can learn about how to reduce the discrepancies in income distribution.

Both sides can learn from each other about the process of liberalization and privatization of their economies. They can also learn from the financial crisis experienced currently in Southeast Asia and three years earlier in Latin America.

Second, is on how to promote regionalism as a building block towards an open multilateral system, "an open globalism". Latin America has had earlier experiences in regionalism, although they have not always been successful.

South America common market (Mercosur) is definitely the most important one today and has received both the highest and most powerful political support.

In Pacific Asia, non-discriminatory arrangements, namely "open regionalism", has been accepted as the most important principle of regionalism, whereas Latin America is more inclined to creating free trade areas.

Both regions need to develop a scheme of cooperation to bring the two arrangements together. In the end an open global system under the WTO is preferable. Both sides have begun to cooperate to realizing this goal, as demonstrated in the WTO Ministerial Meeting in Singapore about a year ago.

In the meantime, maybe the Chilean model of balancing open regionalism through unilateral liberalization, and establishing an FTA (as in the case of associate membership for Mercosur and maybe membership of NAFTA and FTAA in the future) could become the transition strategy for Latin America.

In fact the ASEAN countries are adopting a similar strategy of promoting AFTA (ASEAN Free Trade Area) and at the same time pursuing with their unilateral liberalization.

Third, is cooperation in forging a new international order. This is of vital importance to both parts because so much is at stake in being able to lay down new norms and a rule-based international system as well as new corresponding institutions based on the reform of the UN and Bretton Woods systems.

A cooperation between the two most dynamic parts of the world is imperative for a successful outcome of these efforts.

The awareness of the importance of trans-Pacific partnership has just begun. The 12th General Meeting of PECC in Santiago has been the most important vehicle to strengthen the political will on both sides to promote this partnership.

There were more than eleven hundred participants, including the presence of a few hundred East Asians and a few hundred from the most important non-PECC members of Latin America (such as the Mercosur countries, Venezuela, Ecuador and others). Since PECC membership and participant is tri-partite, namely consisting of the academia, business and government officials in private capacity, the exchanges and ideas discussed were really first class and relevant.

The meeting underlines the importance of overcoming the constraints of geography, history and to a certain extent tradition and some values. Here, knowledge and information are of paramount importance. Therefore, relations and cooperation between academia, and particularly between think tanks, are crucial. So is the role of the media, who still has very limited knowledge about each other.

Another important development to note is that economics and business interests have become the basis of the current interest and attraction. This is rightly so, because this is the most dynamic development on both parts of the world and should indeed be capitalized on as a base for future relations.

This also has provided a strong legitimacy for most governments in the region. A productive economic relationship will make other fields of cooperation easier to promote.

For the longer term, however, political relations are critical for the maintenance of a healthy and dynamic cooperation between Pacific Asia and Latin America.

Counter-visits by leaders and politicians are a necessity. Cooperation among officials in the various regional and global fora are as important. To be able to put this important relationship in a more balanced way, cooperation in culture and art is also important.

It is a fact that both parts are very artistically inclined, and cooperation in this very special field will be very rewarding by introducing the human dimension of the relationship in a prominent place. It is also obvious that as a conditio sine qua non for the development of people-to-people relations, the "tyranny of distance" should be overcome by both sides as soon as possible.

Finally, what is the role of North America, especially the United States, in this newly developing partnership?

The U.S. is too important a country in both parts of the Pacific to be left behind in anything they initiate, and especially since it is both in APEC and in the proposed FTAA.

There are some things that a trans-Pacific partnership would like to do together without the U.S. But this will not be undertaken against the U.S., because in the end it will get involved anyway, either in the APEC context or in the FTAA.

In the global context the U.S. role in the UN is still great, although its own limitations due to domestic politics has put a limit on its influence and role in the world bodies.

The writer is chairman of Supervising Board of the Center for Strategic and International Studies.