Happy birthday, now get a job

After ten years pushing for free trade, Apec is an organisation in search of a new sense of purpose. By John Armstrong

Has Apec still got the puff to blow out the candles on its birthday cake? No doubt the speech-writers are already polishing the gushing language which will extol Apec's first decade when leaders of the economic bloc meet in Auckland in about three weeks.

But celebrations are not in order. Having reached its tenth anniversary, Apec is already suffering the first crisis of adolescence - a crisis of identity and purpose.

Some politicians - notably Lockwood Smith - have tried to gloss over Apec's faltering momentum. Smith's moderately-successful trade ministers' meeting in June prompted him to proclaim Apec was "back on track" after last November's bruising affair in Kuala Lumpur.

Funnily enough, at the time Smith proclaimed the Kuala Lumpur meeting a success.

Never mind. Two months from an election, no-one wants to host a summit which is deemed a failure. Which is why diplomats exist. Their job is to construct the language and initiatives which satisfy politicians' craving for results.

As New Zealand's trade minister, Smith has reasons aplenty to be seen to be forcing the pace of trade liberalisation.

New Zealand has a lot riding on accelerating tariff cuts. The average tariff on this country's basket of exports is higher than any other Apec nation faces, because we trade largely in food.

As Mike Moore joked, we can't eat all our lamb, wear our wool and drink all our wine. We have to trade.

A healthy dose of realism about what Apec can achieve would not go amiss. The Prime Minister has woken up to that and warned us not to expect big announcements from the Auckland meeting.

But New Zealand has been force fed an "Apec is good for you" message and the public will expect something in return for the $46 million bill for hosting the extravaganza. Expect plenty of whining on talkback radio.

But the posturing over whether Apec is on track or derailed is of little value. As any big international organisation can, Apec has hit a rough patch. But it is not going to collapse. The Auckland meeting is more sensibly viewed as a chance to take stock and determine where Apec might go from here.

Not before time, Apec is weaning itself off its penchant for raising expectations and setting deadlines it cannot meet.

The region is still emerging from its worst buffeting since the Asian tigers began to roar in the 1950s. Despite signs of recovery, some countries have deep-seated economic problems.

Not surprisingly, the appetite for lowering protectionist barriers has diminished because that means job losses in the short-term, even though more trade arguably creates more jobs in the long-term. Some analysts argue that Apec's current priority should be helping to fix members' economies.

As host, New Zealand is emphasising such a "strengthening markets" theme.

Apec has another reason to get beyond its fixation with tariff cuts. The organisation was going to hit the trade liberalisation "wall" at some point. Its free trade goals are not binding on members. Everyone could agree on tariff-cutting targets of 2010 for developed economies and 2020 for developing ones when they were a long way off.

Those targets remain broadly achievable. It is attempts to accelerate them that have run into trouble.

That was the case in Kuala Lumpur when the Japanese stonewalled over fish and forest products. Likewise, some countries are unwilling to accelerate tariff cuts on industrial products.

Trade ministers shunted those onto the World Trade Organisation's agenda for the next round of binding trade talks, which kick-off in Seattle in November.

Seattle (and the succeeding "millennium round" of trade talks) is here the action is now. Not Apec.

The test for the communique from the Auckland meeting is whether Apec nations are willing to give the round some real grunt instead of merely mouthing the usual platitudes about free trade.

There is another reason why Apec needs to refocus. Apec was born of fear - fear that the European Community would become "Fortress Europe", its single market denied to other nations.

The same fear applied to the competing North American Free Trade Agreement.

Asia has not been shut out of either. But nor has Apec displayed the willpower to weld itself together in the way Europe has done.

That is not surprising.

The group's 21 members are incredibly diverse; European unity is driven by the bloody pages of Europe's history books.

Europe has a parliament in Strasbourg and an army of bureaucrats in Brussels, while Apec has a small secretariat in Singapore.

Moving Apec forward depends on the host country driving the agenda as much as other members' willingness to go along with it. After last year's botch-up in Malaysia, New Zealand's other theme of "broadening support" for Apec is a mild acknowledgment that the organisation is not robust and must do more to fight off domestic opposition to free trade.

Apec is now under pressure to ditch the arcane jargon of free trade-speak and be more open.

This pressure is also coming from the business world, which is unhappy with Apec's momentum. New Zealand has constructed this year's Apec meetings to give business - the driver, after all, of the region's growth - much more of a role in Apec's formal meetings.

But Apec also suffers an identity crisis for another reason.

It is an economic grouping with a disguised political purpose. Each of the 21 members is designated as an "economy" rather than a country.

This nicety is a plus when it enables mainland China and Taiwan to sit at the same table. It also gives Bill Clinton and China's president Jiang Zemin an excuse to hold a bilateral meeting on the sidelines of Apec.

You could argue that such a superpower tete-a-tete would happen somewhere else anyway. So Apec gets little positive mileage for easing regional tensions. Yet, no other forum brings the leaders of Russia, China, Japan, South Korea and the US into such close proximity so regularly.

The fact that the likes of Clinton and Jiang are coming to Auckland demonstrates Apec's real value. But not a word about that will appear in the final communique.