by Walden Bello*
A friend of mine recently compared the Asia Pacific Economic Cooperation (APEC) to a horse that is desperately flailing about after breaking its leg, waiting for the merciful bullet that would put it out of misery.
My colleague’s metaphor is probably overly grim, probably even incongruous, but it does drive home the point that, as the annual APEC summit approaches, it’s time to seriously think about phasing the organisation out of existence.
Now, surely, one might object, a grouping that now sponsors scores of ministerial, sub-ministerial, and working-group meetings every year, from one end of the Great Ocean to the other, cannot be dismissed as irrelevant. Of course, as a social club, APEC is a great success, providing a good excuse for bureaucrats to spend taxpayers’ dollars to subsidise tourist junkets that mask as exercises in economic diplomacy, where it is not uncommon for the negotiation of affairs of state to provide the perfect cover for the pursuit of affairs of the less cerebral kind.
But let’s face it: none of these events--from the meetings of environmental bureaucrats to "clean up the Pacific," to business-government conferences on how to support small and medium businesses, to the recent "government-NGO meeting" in Manila to "advance gender equity" in APEC--has produced anything beyond nice-sounding declarations. No other regional association—not even ASEAN—has generated so much heat yet yielded so little in terms of real impact.
APEC came into being in the late eighties when Tokyo proposed the formation of a region-wide consultative group that would provide technical cooperation on trade and investment matters along the lines of the OECD in the trans-Atlantic area.
Australia took the initiative in the early 1990’s, when it seemed that the world might break up into regional blocs that would leave Canberra with no one to form a trade partnership with but New Zealand and Antarctica. The Australians, however, took the nascent grouping on a different tack from Tokyo’s original thrust, that is, from a loose consultative body to a formal free trade area..
Seeking a bargaining chip to deploy against the Europeans in the stalled GATT negotiations, the US took over the leadership of the effort to turn the grouping into a free trade area in 1993. Prior to the Seattle Summit of that year, Washington’s academic pointman in trade affairs, C. Fred Bergsten, brought together several free-trade ideologues from the other countries, designated himself and them as "Eminent Persons," and proceeded to draft a blueprint for mandatory, comprehensive, and simultaneous trade and investment liberalization. Bill Clinton lobbied hard for its endorsement in Seattle, but failed to secure it from Asian leaders who were jolted into passive resistance by Malaysian Prime Minister Mahathir’s boycott of the meeting.
By that time, APEC was dividing into what Australian commentator Kenneth Davidson called a "Anglo-Saxon" free traders led by the US and Asian governments that continued to be committed in practice to an activist state role in the economy, expressed in, among other things, preferential trade and investment arrangements for local firms.
But Washington and its stalking horse, the Eminent Persons’ Group, were undeterred. After winning over the host, President Suharto, they were able to pressure the Asian bloc into endorsing the EPG’s vision of borderless trans-Pacific trade by the year 2020 during the 1994 summit in Bogor, Indonesia. This triggered a whole year of media-hype about the birth of a new free trade area a la NAFTA.
But Washington’s cheerleaders forgot one thing: Osaka was going to be the site of the 1995 summit, and in APEC it is a truism that whoever hosts the summit exercises a preponderant influence on its outcome. In an impressive exercise of one-on-one, behind-the-scenes diplomacy, the Japanese, in the year leading up to the summit, were able to line up most of the Asian countries behind a declaration that whatever trade liberalization would take place would be voluntary, flexible, and non-binding.
The Bogor vision of a concerted, mandatory, and comprehensive process leading to free trade was effectively derailed.
Events were anti-climactic after the Osaka shootout. The Subic Summit in November 1996 is mainly remembered for anointing the Philippines as Asia’s latest "tiger"—a status that lasted less than a year, up to the collapse of the peso in July 1997.
As for Vancouver last year, who now remembers the vague agreement on "early voluntary liberalization" in nine industrial sectors that few governments had any intention of taking seriously? Vancouver will be remembered instead as the summit when the humbled Asians, like the Gauls of old, came on their knees into Anglo-Saxon territory to be lectured by Clinton and the US Treasury duet of Robert Rubin and Larry Summers on how to put their huts in order along the lines demanded by the IMF.
APEC is effectively stalemated, and all the players know it. ASEAN sees it as a rival to the ASEAN Free Trade Area (AFTA) that must be emasculated. The Japanese, in typical fashion, know it is toothless but behave as if it mattered. The Americans now prefer to employ their arm-twisting on trade and investment in other arenas, in other ways, through threats of unilateral trade action or by attaching trade and investment conditionalities to the IMF programs imposed on the battered Asian economies. However, no one dares leave the grouping for fear that in their absence, some other faction might gain the advantage and ram through its vision for Asia-Pacific trade relations.
With his usual acute gift for sniffing out opportunities to promote the interests of both self and country, Fred Bergsten recently came up with a new raison d’etre for APEC, and that is to serve as the mechanism for formulating an expansionary program to spend the $30 billion Japan recently offered the troubled Asian economies. To which, of course, the Japanese, who are tired of having Washington direct economic programs for which they put up the bulk of the funds, are likely to say, "thanks, but no thanks."
Which brings us to Mr. Mahathir, the old nemesis of the APEC free-trade scheme. Mahathir ought to read the handwriting on the wall and go. But before he goes into that good night, one cannot resist the temptation of asking one last favour from the grand old warhorse. In the midst of all the talk about boycotting the APEC Summit because of the Anwar affair, he might do us all a favour by calling the bluff and withdrawing Malaysia’s offer to host the event. Even if this gesture does not drive this useless grouping into oblivion, it would spare the rest of us, at least for a year, another photo of eighteen males linking arms in yet another memorable moment of trans-Pacific cooperation.
*Walden Bello is professor of sociology and public administration at the University of the Philippines and co-director of Focus on the Global South in Bangkok