Reading the APEC Tea Leaves 
International Herald Tribune
November 24, 1993
Philip Bowring    

Seldom has a set of initials moved so far so fast in the American consciousness as APEC, the Asia-Pacific Economic Cooperation forum. But what is this group, regarded until so recently by Washington as an unimportant talking shop? What, apart from being an excuse for Bill Clinton to appear presidential, for President Jiang Zemin to get in some public relations for China and for assorted other leaders to be seen hobnobbing along?

APEC was defined not by the Clinton-Jiang meeting, important though that may have been for U.S.-Chinese relations, nor by worthy if inconclusive deliberations on economic issues. It was defined by two events on its fringe: the accession to APEC of Mexico (Papua New Guinea joined, too), and the absence of the Malaysian prime minister, Mahathir bin Mohamad.

Like a host of other "Asia-Pacific" groupings, APEC had long ignored the fact that 11 Latin nations border the Pacific. Unlike the North and Central American states, three South American states - Chile, Peru and Ecuador - are exclusively Pacific nations. It cannot be long before the first two, at least, are admitted to APEC.

Chile is on its way to integrating itself into NAFTA through its relationship with Mexico. Indeed, all Latin America is being drawn closer together in the same way as, in the 1980s, the existence of the EC forced nonmembers to make parallel moves to freer trade via the European Free Trade Association.

Mexican membership in APEC, and that of other Latin nations, should help prevent NAFTA from turning inward and becoming an enlarged version of a new American protectionism.

But the main benefit of Mexican membership is to strengthen the original purpose of APEC - to warn the Europeans that if the Community maintained its march to fortress mentality, or threatened to undercut the GATT Uruguay Round of trade talks, they would be cutting themselves adrift from the other, more dynamic two-thirds of the world.

The conjunction of NAFTA's passage with the APEC meeting seems, judging from newspaper editorials in Europe and the noises out of Brussels, to have had some effect in getting this message through. That is doubly important at a time when Europe's economic problems have left policy dangerously suspended between seeking new markets as the answer to unemployment and closing off the existing market.

Mr. Mahathir's boycott was, at one level, political theater - a way to put Malaysia, and himself, on the world map. Conceivably, if he had not made such as issue of it, others might not have bothered making the long journey to Seattle (where they found themselves largely bypassed by the Clinton-Jiang spectacular).

The most eminent, and longest serving, of the Asian leaders, President Suharto of Indonesia, seems to have attended only after being promised that the next APEC summit would be in Jakarta.

Generally, members of the Association of South East Asian Nations, and Japan, have been lukewarm toward APEC, even though its secretariat is in Singapore, one of the six ASEAN states. They realize, in part, that APEC comprises so diverse a collection of states as to render the notion of free trade absurdly grandiose and impractical. Such big talk also distracts from ASEAN's own attempts to ensure free trade among its members, without increasing barriers to the outside world.

It may also send the wrong signals to Europe about the importance of maintaining an open global system. And there is some resentment that Asia is expected to jump when Washington decides that APEC is a "good thing."

There are also important undercurrents of sympathy for the Mahathir view that ultimately East Asia will have to form its own grouping in response to a drift of Europe and the Americas toward regional systems.

So, at one end of the spectrum Mexico's accession has defined what APEC can do. At the other, Mr. Mahathir's absence from the feast has defined what it cannot do.

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