A New Paradigm for APEC?

By Ernest Z. Bower, Senior Adviser and Director, CSIS Southeast Asia Program

The most precious commodity in international diplomacy is the bandwidth of leaders of countries. As regional security and trade architecture in Asia evolves, governments need to rationalize which meetings should be attended by the men and women who lead. In that context, it is time to explore whether an annual leaders’ summit is needed for the Asia Pacific Economic Cooperation (APEC) forum.[1]

This is a question whose time has come. It is difficult for bureaucracies to address such questions because by their very nature, summits become self-fulfilling. Senior officials and staff are assigned to plan and execute annual summits, not to apply a strategic framework that questions whether they should continue at certain level. Bureaucratic momentum can overtake strategic clarity, but eventually decisions must be made or crowded calendars will eventually undercut the impact of leaders.

Timing is important, because if a change is to be made in APEC, it may be useful to table new ideas during the year of U.S. chairmanship that begins this November after the APEC Leaders Summit in Japan. This would offer a certain bureaucratic symmetry as it was U.S. president Bill Clinton who initiated the APEC Leaders Summit in 1993 at Blake Island. It may take U.S. leadership to innovate and suggest consideration of a new structure. At the time, there was a great need for an annual general meeting of the leaders of the Asia Pacific nations, and APEC met that need brilliantly.

However, the region has evolved and new structures are coming into place. The United States and Russia have indicated they will accept the invitation to join the East Asian Summit (EAS)[2] when formally invited during the EAS forum this October in Hanoi. The basis for the decision is that the EAS will be the core architecture for Asian security and trade cooperation.

In considering EAS membership, the United States applied Secretary of State Hillary Clinton’s criteria for effective and enduring regional architecture as outlined in her speech on the subject in Honolulu, Hawaii, in February. Among those criteria was the centrality of ASEAN—a test that APEC, which includes only 7 of the 10 ASEAN members—does not pass. With the addition of the United States, the EAS also becomes a trans-Pacific structure. By design, it will encompass regional issues such as security to transnational issues such as climate change and nonproliferation to trade, investment, and development. The EAS has the capacity to eventually incorporate the ASEAN Regional Forum (ARF) as well as the nascent ASEAN Defense Ministers Meeting plus Eight (ADMM + 8).

At the global level, the G-20 has begun to meet the need to bring new leadership into the discussion about the key issues facing the world. The G-20 summit will continue on an annual basis and leaders will also meet on an ad hoc basis. The G-20 summit is another high-priority use of leaders’ time.

APEC was created in the late 1980s in response to the need for a regional structure that would bridge the Pacific, avoiding the possibility that regionalism would devolve into geographic cliques—namely, a proposed East Asian Caucus (an Asia-only structure tabled by then Malaysian prime minister Mahathir Mohamad), the North American Free Trade Agreement (NAFTA), and the European Union. APEC’s agenda has been overwhelmingly focused on economic coordination and facilitation, not security, and APEC is an important and useful structure that links key countries across the Pacific. However, its own members admit that it does not have any legal mandate to compel economies to adhere to consensus agreements. And while it already includes 21 economies, it does not include all of the ASEAN countries, nor does it include key Latin American countries seeking to join the trans-Pacific dialogue such as Colombia.

On trade, APEC has been effective in tabling issues that help prepare members for increasing and expanding trade and investment, such as customs facilitation concepts and sector pathfinder initiatives in key areas such as energy and food security, but it has ceded effective trade liberalization efforts to ad hoc initiatives such as the Trans Pacific Partnership (TPP).[3]

TPP members are essentially a coalition of the willing on trade liberalization—a subset of APEC member countries who agree that negotiating legally binding trade agreements with Asia Pacific countries is fundamental to advancing their national interests. While the TPP should eventually become a Free Trade Area for the Asia Pacific (FTAAP) encompassing all of Asia, including those countries who are currently not APEC members (Cambodia, Laos, and political miracles and evolution willing, Burma), the fact that the progress being made is outside of APEC is telling.

Turning to the cruel reality of the schedule, the question of continuing annual APEC leaders’ summits becomes even more important. Consider this November when President Obama needs to attend the G-20 meeting in South Korea, and then move directly to the APEC Leaders Summit in Japan. Because the United States is not yet a member of the EAS, Obama is not attending that meeting, which will be held in Hanoi in October. Next year, however, he will need to do all three meetings, including hosting APEC in Hawaii. That level of summitry, particularly given the redundant membership of the three groups, must eventually be rationalized.

Policymakers could agree that APEC has fulfilled a vital role in providing an annual opportunity for the leaders of Asia Pacific nations to meet, get to know one another, and seek alignment on key issues. They could also make the case that as new structures have evolved, precisely to address urgent needs to discuss regional security and economic issues, that after 2013—after 20 years of leaders’ summits—APEC would become a ministerial dialogue with the ability to call for ad hoc leaders’ summits when key deliverables warranted. This innovation would preserve the rare commodities of leaders’ time and attention, incentivize the APEC bureaucracy to develop and deliver results, and rationalize valuable regional architectures.

[1] The APEC economies 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, Philippines, Russia, Singapore, Chinese Taipei, Thailand, and the United States.

[2] The EAS comprises the 10 ASEAN nations (Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand, and Vietnam) plus Australia, China, India, Japan, New Zealand, and South Korea. The United States and Russia will join the EAS in October 2010.

[3] The Trans Pacific Partnership comprises Australia, Brunei, Chile, New Zealand, Peru, Singapore, the United States, and Vietnam.


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