United States looks to APEC for economic promise

The reality of today's global economy is that the center of economic gravity has shifted away from the traditional industrial economies of the Atlantic to the dynamic, innovative ones of the Pacific Rim.

The U.S. commitment to deepening its economic involvement in the Asia-Pacific region goes well beyond the fact that Asia is America's largest trading partner, with total trade exceeding US$374 billion, or 63 percent greater than U.S. trade with Europe.

An estimated 2.6 million American jobs depend on U.S. exports to Asia, and the percentage of U.S. jobs reliant on expanding U.S. trade and business ties with Asia should grow rapidly in the years ahead. The Asia-Pacific Economic Cooperation also absorbs more than US$145 billion of U.S. investment, or about 30 percent of the total U.S. foreign direct investment.

Top Clinton administration officials have time and again stressed that trade with the Asia-Pacific region will be at the center of U.S. trade strategy for many years to come.

"Our commitment to the Asia Pacific Economic Cooperation (APEC) and to promoting trade liberalization, both regionally and globally, is unwavering," Sandra O'Leary, Deputy Assistant Secretary for Economic Policy at the State Department's Bureau of East Asian and Pacific Affairs said in October of this year.

She added that the administration's commitment to APEC and trade liberalization is "a priority that has bipartisan support".

"I think that there has been a big change, and a change for the positive, in the United States and in the U.S. economy," O'Leary said. "We recognize today, as we have never before, that our own economic well being is inextricably tied to our full engagement in the global economy. Trade is a major source of jobs growth. Trade is a major source of technological advancement."

Hopes

The Clinton administration places high hopes on the ongoing second APEC leaders meeting in Jakarta for ironing out several issues related to trade and trade facilitation.

Terming APEC a "major pillar" of U.S. policy in the Asia- Pacific region, Under Secretary of State for Economic, Business and Agricultural Affairs Joan Spero said in July that the APEC Economic Leaders Meeting (AELM) will work on a number of subjects.

"One is the progress toward discussion of how to facilitate and promote trade in the region," Spero explained. "The Trade and Investment Committee has taken up this work this year. So we see that APEC has great promise in the trade promotion, trade facilitation, trade liberalization areas."

The Clinton administration supports the growth of APEC as an institution, Spero added. "APEC is growing in the density and in the intensity of its action and we are very supportive of that. So all in all, we look forward to a very successful meeting. It's going to be a major landmark in the Clinton's administration's Asia policy this year."

Trade with APEC nations is marked for priority, Spero told reporters at a separate gathering in October in Washington, D.C.

"Trade with Asia, the world's fastest growing region, remains front and center in our overall economic strategy," she said. "Through the General Agreement on Trade and Tariffs (GATT), APEC and our bilateral economic dialogs, we are working to pave the way for U.S. business to seize the opportunities in Asia's economic boom. Our economic future requires greater U.S. business involvement in Asia."

Financial issues

The emergence of APEC as an important building block for a global approach to trade has also spurred a rethinking of financial issues.

APEC is a pioneering model for consensus-building that is well-suited for dealing with the region's financial issues, U.S. Treasury Secretary Lloyd Bentsen said at the APEC Finance Ministers Meeting in Honolulu last March.

"We face some of the same basic challenges: sustaining growth with low inflation, financing high rates of private investment, improving infrastructure, and strengthening our financial sectors," Bentsen said. "That is why we need to consult and to cooperate in identifying successful economic strategies for the future."

Bentsen added that a "broadened perspective" is needed to promote trade and finance. "This kind of economic performance cannot be sustained in a vacuum. We all share an interest in economic strength for the region as a whole."

He cautioned that despite high domestic savings rates in the Asia-Pacific region, external financing requirements are high and getting higher, and APEC must address this trend. Another important component for developing a sound macroeconomic environment, sound legal and prudential frameworks, and information for investors, Bentsen added.