Asia-Pacific Cooperation Is Shadowy but Seems to Be Going Places
International Herald Tribune
November 22, 1994
Donald K. Emmerson  

Five years after the launching of APEC, the Asia-Pacific Economic Cooperation forum, in Canberra in 1989, it is easier to say what the group is not than what it is.

APEC is not an institution. It remains the only major regional arrangement whose members cannot agree to belong to anything more than a topic: cooperation.

APEC leaders' meetings, like the one last week in Bogor, Indonesia, are not summits, and their nonbinding declarations are not signed. Members are not even called countries, because China does not recognize the sovereignty of Hong Kong and Taiwan.

APEC is not a customs union. It is not a free trade area. The leaders in Bogor merely called for "free and open" trade and investment in the Asia-Pacific region by 2020. Along with its other nots, APEC is not in a hurry.

Yet in the Declaration of Common Resolve they issued in Bogor, APEC leaders took significant steps toward more trade and investment, and therefore more prosperity, on the already booming Pacific Rim. Doubters should remember that APEC economies already account for nearly half of global output and 45 percent of world trade, and that those shares are growing rapidly.

There will be substance to this political declaration because the APEC leaders agreed to ratchet up the pressure on themselves to keep opening their economies to freer flows of goods, services and capital across the Pacific basin, and to do so in ways conducive to expanding commerce globally.

The Bogor declaration started two countdowns. One runs to the year 2010, when the industrialized economies in APEC are supposed to have achieved free and open trade and investment. The other will end in 2020, when developing member economies are meant to have done the same.

By directing their ministers "to immediately begin preparing detailed proposals for implementing" the Bogor declaration's provisions, APEC's leaders have increased the pressure on their own governments to move beyond rhetoric.

Also encouraging is the decision to renew the mandate of two expert advisory bodies - the Eminent Persons Group and the Pacific Business Forum - to monitor members' progress and re commend further steps.

And Malaysia, which has expressed reservations about APEC - fearing that the bigger more developed economies like the United States and Japan will not let smaller, poorer ones catch up - was conciliatory. After the Bogor meeting, Prime Minister Mahathir bin Mohamad said that he agreed with and respected the Bogor consensus without feeling bound by it. "I will not go to war with the U.S.," he joked. Malaysia's own commitment to free trade is clear. Its average tariff in 1990 was less than 10 percent, and the recent budget contained further substantial cuts in duties on more than 2,000 items.

As officials try to shape the Pacific Rim from the top down, millions of entrepreneurs are daily energizing it from the bottom up. This is the best long-term reason to believe that momentum toward free Asia-Pacific trade and investment will not abate.

Difficult questions remain.

Will the U.S. Congress, newly polarized and Republican-controlled, sabotage President Bill Clinton's ability to live up to the Bogor declaration? Will Japan change governments again before the 1995 APEC leaders' meeting, in Osaka? How will APEC accommodate two opposing views of trade liberalization: the voluntary unilateralism favored by some members, and the binding reciprocity preferred by the United States and others? And when will APEC take up issues of particular concern to its less prosperous members, including the free movement of labor and the transfer of technology?

Such questions are a reminder of how much could go wrong. But Bogor went well. APEC is moving forward on the right track. It would hardly be fair to ask more of such a new and untested engine of economic growth.

The writer, a visiting professor with the Asia/Pacific Research Center at Stanford University in California, contributed this comment to the Herald Tribune.

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