Elder statesmen of Apec issue warnings for future

The recent Philippines meeting of Pacific businesspeople and officials focused on the future of Apec, writes Kerrin Vautier.

On October 23, four self-styled "senior citizens" of Apec stood up in front of about 500 delegates at the biannual Pacific Economic Cooperation Council (PECC) general meeting in the Philippines to ponder a crucial question: Apec's second wave, or "what now?"

Bob Hawke, former Australian prime minister and a key figure in founding Apec; Fidel Ramos, former Philippines president and host of the 1996 Apec meeting; Ryutaro Hashimoto, former Japanese prime minister; and Jim Bolger, New Zealand's former prime minister now Ambassador to Washington, were invited by PECC to suggest their vision for Apec's second decade.

Jim Bolger participated in the first five Apec Leaders meetings and attended the 1999 meeting in Auckland. He believes Apec 1999 "put new vitality and sense of purpose back into the Apec process" and was an important lead-in to the next World Trade Organisation negotiating round to be discussed in Seattle this month.

But he has two words of warning for Apec in the future. First, if the developed economies are to meet the Bogor goals of zero tariffs by 2010, they must speed up the process of removing subsidies and other barriers to trade.

Second, Apec and its liberalisation message must start being relevant and beneficial to the 50 per cent of the world's population - three billion people - who live on less than $US2 ($3.92) a day, or the 1.3 billion who live on less than $US1 a day.

"While the term 'globalisation' drips off the tongue at every trade conference, hunger feels the same today in a globalised economy as it did in times past. And if you have no income, you cannot be part of the great global economy. Present policies leave half of the people outside - by any definition, that is failure," Mr Bolger says.

Apec is the only Asia Pacific forum where officials meet regularly and leaders meet annually with the opportunity to discuss issues of actual or potential conflict in the region, says Mr Hawke. It should not be wasted. When the East Timor crisis erupted during the Auckland Apec summit, having the leaders gathered meant they could come to a rapid decision on a regional response. This could work for other matters, he says.

The most pressing potential conflict is the tenuous relationship between the United States and China, in particular the continuing exclusion of China from the WTO and Washington's insistence on holding trade relations hostage to an array of current political disputes. Other regional leaders should be using the Apec meetings to impress on the US the importance of establishing a sensible and productive relationship with China.

Mr Ramos also believes it is important to integrate regional security into the Apec process, but he believes the present ad hoc process should be formalised.

The leaders already discuss political and security issues in their summit, Mr Ramos says, rather than sticking strictly to the set economic agenda recommended by their officials and ministers - "and this is a good thing".

This would be spearheaded by the foreign ministers, who already sit in the Apec meetings, but are underused, he believes.

To maximise the inputs of foreign ministers - and to bring finance ministers more closely into the process - Mr Ramos sees a three-tiered system, with trade, finance and foreign ministers all meeting separately to discuss their specific concerns, then coming together immediately before briefing the leaders.

Mr Ramos announced at the PECC meeting that he would be organising a series of top-level meetings involving regional political leaders now in the private sector to discuss the practicalities of a more comprehensive Apec.

"How much longer can we, in the Asia Pacific, pretend we can discuss the bases of our region's long-term economic growth without also discussing its underpinning of politics and regional security? Is it not time we moved from Asia Pacific Economic Cooperation to Asia Pacific Security, Political and Economic Cooperation? From Apec to Apspec? Or, to use a more euphonious acronym, from Apec to Apex - the very summit of human development."

Mr Hashimoto has three recommendations for the future shape of Apec:

* Apec should leave negotiations to the WTO and concentrate its own work on the promotion of voluntary liberalisation and facilitation. However, the lessons of the Asian economic crisis and the rapidly approaching era of global mega-competition means Apec must also include domestic structural reforms in the liberalisation and facilitation drive. Input from business and human resource development will be an essential part of this process.

* The Asian crisis shows international finance issues need to be much more closely coordinated with the Apec trade process.

* Apec should be focusing attention on electronic commerce and other aspects of information technology.


* This article is the latest in a series by the New Zealand Committee of the Pacific Economic Cooperation Council (NZPECC). NZPECC chairwoman Kerrin Vautier led a New Zealand delegation to the PECC general meeting in the Philippines. PECC is an independent think-tank made up of businesspeople, academics and government officials. It is the only NGO with observer status in Apec.