APEC at the Crossroads

Asia-Pacific Economic Cooperation is at a crossroads. In last autumn’s Bogor Declaration, Asia-Pacific leaders headed by Indonesian President Soeharto agreed on goals and ultimate deadlines for achieving free and open trade and investment in the region. However, some would prefer to keep vague the “blueprint” to achieve these goals while raising the prominence of alternative goals, especially assistance to less developed members of the group. This poses a challenge to those who are firmly committed to maintaining trade and investment liberalization and facilitation as the focus of APEC.

Should the precepts outlined in the Bogor Declaration prevail at this November’s meeting in Osaka, most of the hard work to keep the liberalization process on course will still be ahead. Resistance to breaking down trade barriers–in the Pacific as elsewhere–is as predictable as the seasons. Some East Asian governments are prone to believe that trade is a form of strategic policy, and that unfettered trade is as much a threat to economic well being as it is a potential benefit. (These sentiments are, of course, held by some in the United States as well). Many view the success of Japan, the Republic of Korea, and other Asian economies to be the result of carefully nurtured export industries coupled with protected home markets. Moreover, many view weaker, smaller economies as prey to the giants: the United States, Japan, and increasingly, China. The most cynical view is that APEC represents a U.S. ploy to reassert economic dominance in the region.

It was with such concerns in mind that four institutions–The National Center for APEC, the National Bureau of Asian Research, the University of Washington APEC Study Center, and the U.S. National Committee for Pacific Economic Cooperation–combined their efforts to convene a meeting of U.S. business leaders and policymakers to examine APEC issues and recommend policy. The Executive Roundtable met February 16-18 in Kirkland, Washington, providing the first opportunity for U.S. private- sector representatives to grapple with several key questions: What should be achieved at the upcoming APEC meetings in Osaka? How should APEC pursue investment principles in the region? To what extent should APEC develop institutionally? What roles should business play in APEC?