New director to reassert Apec's relevance

Muhamad Noor Yacob, the new executive director at Apec is the first appointed for a three-year term. Photo / Supplied

Apec's new executive director smiles apologetically when asked about the shortcomings of the 20-year-old international trade grouping. Sorry, no. He is not going to talk about that kind of stuff. He would rather focus on Apec's strengths.

It is the response to be expected from a diplomat of Muhamad Noor Yacob's standing.

The new boss of Apec's Singapore-based secretariat has taken up the position following six years as Malaysia's representative at the World Trade Organisation which included a stint in the tricky role of chairman of its dispute settlement body.

Noor's long immersion in the delicate world of trade politics makes him admirably qualified for the job of helping to herd Apec's 21 economies into some kind of fruitful consensus which amounts to something more than the platitudes churned out year after year in the lengthy communiques which follow the annual leaders' summit.

While he will not catalogue Apec's weaknesses, Noor's job description is telling enough. It requires him to work towards making Apec "a more dynamic component of the regional economic architecture".

Noor has taken the job at a critical juncture in Apec's relatively short history. In short, Apec has to reassert its relevance.

It has become long on ambitious talk, but short on concrete action. Its standing as a forum of influence, both in economic and political terms, is being eroded by competition from sub-regional groupings like Asean, and high-powered get-togethers like the East Asian Summit.

Apec's long-term objective of achieving across-the-board trade liberalisation among all 21 member economies is being bypassed by countries striking bilateral free trade agreements not always in harmony with that overarching goal.

There are signs, however, that what was starting to become a serious drift in Apec's direction is being arrested.

Noor's appointment comes in the wake of last year's Singapore leaders' meeting which was notable for two developments: a recognition by Asian economies that the global economic crisis had seen a shift of economic power in their direction away from America, and a corresponding determination by the United States to engage more pro-actively with Asia.

The global meltdown spurred leaders at the Singapore summit to call for a "new growth paradigm" in the region - one based on balanced growth and sustainability, but one which also broadens Apec's agenda from trade and investment liberalisation towards greater co-ordination of economic policy overall.

The second development had Barack Obama floating a Pacific-wide free-trade area, a concept kick-started by the Americans opening free trade negotiations with the four-nation Trans Pacific Partnership.

These negotiations are not happening under Apec's ambit. However, the Americans are hosting Apec next year. And they are flagging a strong intent to make Apec the "driving force" for economic prosperity in the region, issuing a joint statement with Japan, the venue for this year's meetings, to that effect last month.

Noor, the first head of the secretariat to be appointed for a three-year term in order to maintain Apec's momentum, sees flushing out the detail of the "new growth paradigm" as his immediate priority.

"Before the focus was on trade and investment liberalisation."

However, that shift in emphasis does not mean neglecting the so-called Bogor goals on free trade, which stipulated a target of free and open trade and investment for Apec's industrialised economies by 2010, and by 2020 for the developing economies.

The first deadline has arrived and this year the progress since the 1994 Bogor Declaration will be measured. Noor says that assessment will be extremely thorough to ensure it is credible.

While studies show average tariffs in the region have fallen from 17 per cent when Apec was established to 6.6 per cent in 2008, Noor says outside institutions such as the World Bank and the Asia Development Bank will be invited to present their own independent analysis of how the industrialised economies measure up.

Noor says the fact that seven developing economies have put up their hands to also be reviewed is evidence of how far Apec has come in respect of trade liberalisation.

Meanwhile, Apec is conducting its own study on the degree to which the so-called "noodle bowl" of 43 intertwining bilateral free trade and regional free trade agreements between member economies can act as building blocks towards Obama's Free Trade Area of the Asia-Pacific.

The other major question relating to Apec's future is whether membership of the grouping should be extended, particularly to the emerging economic powerhouse of India which has made a request to join.

On that Noor will not be drawn. "It is largely a matter for the leaders. It is a political decision."

APEC
* Asia-Pacific Economic Co-operation.
* Forum for facilitating economic growth, co-operation, trade and investment in the Asia-Pacific region.
* Established in 1989.
* Has 21 members which account for about 40 per cent of the world's population.
* The members are: Australia; Brunei Darussalam; Canada; Chile; People's Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; The Republic of the Philippines; The Russian Federation; Singapore; Chinese Taipei; Thailand; United States of America; Vietnam.