Mike Moore: Does Apec stand for Avoid Practical Economic Change?

Opinion

Leaders from Asia and the Pacific assembled again, this time in Singapore, to address great issues of common concern. That they meet is a good thing and a logistical nightmare for the host nation.

However, it is time to audit progress. The first Apec meeting wrestled with the seating arrangements because, at this time, there had to be an elegant solution to seating Hong Kong and Taiwan at the same table as China.

Times have changed, and mostly for the better. Those who feared China's rise are now relieved that its growth has done more to drag the world out of the recession than the economies of Japan, the US or Europe.

Those who fear China or India, to be logical, would have had to argue that it would be better if, in 1945, Germany and Japan had been left to lie in ruins. Few now fear the reintegration of India and China into the world economy. Most welcome it.

Except for the past 18 months, this has been the most successful decade in economic history. More wealth has been generated in the past 60 years than the rest of history put together.

Hundreds of millions of people have been lifted out of extreme poverty. This is a remarkable story of markets and success.

However, the great moral, economic, social and environmental challenge is how to bring another billion people who are trapped outside the system into the global economy.

We have the capacity to bring them into the global system as citizens, producers and consumers. What stands in the way? Politics.

Apec decided some time ago to have free trade in the region by 2010 for developed countries, and 2020 for developing countries. Many barriers have gone down, hence the growth we have enjoyed, but we are far from achieving these agreed targets.

Apec is not a negotiating body but it can set the tone and tighten the agenda. It does allow leaders to meet informally and hopefully make progress.

Unfortunately, much of the time in the corridors and at bilateral meetings are about doing side deals. This is understandable - there are costs to being left out of new groupings and bilateral trade deals.

But they are not, in the main, free trade arrangements, they are preferential trade deals. They create new privileges but few address very sensitive issues such as agriculture, none has a binding disputes mechanism, and new levers are put into the hands of politicians who will one day be tempted to use them.

Every time we get a new leader somewhere we have a new initiative. I understand this. Politicians like to sign things and all want to make their names and make history.

Whenever this happens, the longer the unsatisfactory status quo remains, because bureaucratic and political energy is again diverted from the main game.

It's easy for politicians to have bold plans 10 years out, after the next two elections. Communiques from such meetings are famous for their ambiguity. Leaders from Japan and Australia with opposite views on the need to liberalise agriculture can go home and claim victory. This keeps the negotiations going, and leaders are not exposed to angry domestic interests who mobilise to keep their handouts.

However, we have had a decade of avoiding the tough issues. The future of multilateralism is now on the line. Protectionist pressures are building. All the G20 nations, after deploring protectionism, have deployed protectionist programmes to appease privileged domestic interests.

Protectionism is the crack cocaine of economics. It is a short-term addictive stimulant which becomes harder and harder to give up. Ninety-nine out of 100 advisers to leaders will be saying this. It's not the economy, stupid, as President Bill Clinton once said, it's politics.

It's time now for leaders, in the famous words of a great US trade negotiator, "to cut the bait and fish".

We need freedom from fresh initiatives and more than the usual high-flying rhetoric about the need to conclude the Doha round at the World Trade Organisation.

It just won't do to tell negotiators to work harder, and for the other guy to show more flexibility. Unless capitals change their instructions to ambassadors at the WTO, nothing will change, or can.

Good negotiators know that success comes when you cut up the cake and everyone thinks they have got the better slice. The Doha deal will add a trillion dollars to global growth, bring good environmental outcomes, and stop the subsidised rape of our fishing stocks. The Doha deal is ripe, the global economy needs the growth and confidence it will bring.

We can only live in hope that the big news is not just another photo opportunity of leaders wearing unusual shirts.

Mike Moore is a former Prime Minister of New Zealand and Director-General of the World Trade Organisation.