APEC post-2020: Brian Lynch comments on APEC leaders' launch of a review to chart APEC's forward path and identify its on-going place in regional economic architecture.

AuthorLynch, Brian

The swirls and eddies currently sweeping across the Asia--Pacific region's geopolitical and economic landscape do not offer a promising setting for the review of any regional agency, even one as long-established, and soon to enter its fourth decade, as the institution known as 'Asia-Pacific Economic Cooperation'. APEC has recently been described as the 'premier economic forum' (1) for promoting regional growth and integration and 'a global leader in addressing pressing problems'. The 21 APEC member economies, including New Zealand, are home to 40 per cent of the world's population and account for around 60 per cent of global production.

Seemingly undeterred by the regional volatility, APEC leaders have launched a major project to chart APEC's forward path and identify its place in regional economic architecture beyond 2020. The 30th anniversary will be a significant one for APEC; 2020 will be notable, too, because it was the target date which APEC set, in 1994 in the 'Bogor Goals', for full realisation throughout the region of the vision of 'free and open trade and investment'.

Along with APEC's own Business Advisory Council (ABAC), the Pacific Economic Cooperation Council (PECC) has been invited to provide input to the APEC review. PECC was established in 1980 and has 26 member committees around the Asia-Pacific region. As a genuinely representative and region-wide organisation, PECC is well-placed to respond to the APEC invitation. It can utilise its unique tripartite composition of academia and research institutes, the export business community and experts from the public policy arena. Of advantage as well is the observer status PECC has had in APEC throughout the latter's existence. The two-year exercise to generate the PECC offering to the APEC review is being jointly led by the PECC member committees of Malaysia and New Zealand, assisted by a 'task force' drawn from several other PECC member committees.

The primary ambition of the APEC review is to obtain agreement among member economies on a 'vision' of the organisation's post-2020 purpose, objectives and priorities. A key aspect will be a stock-take of the level of economic liberalisation and growth that has been accomplished in the past 30 years, and for which APEC could fairly claim some credit. Where actual outcomes have fallen short of what was anticipated, can the review shed light on why this was the case? What lessons could be drawn to help sustain APEC's future contribution to regional economic integration, serving, as leaders have said, as 'an incubator of credible and innovative ideas and proposals'.

Outcome interest

The APEC review is important for New Zealand, one of the twelve founding members. Successive governments have been firmly committed to the APEC process. Without forgoing longstanding ties elsewhere and especially in Europe, today's reality is that the Asia-Pacific region has become the cornerstone of New Zealand's interests worldwide. Seven of New Zealand's ten major trade partners are in the region, which is also the main source of foreign direct investment, the surge in tourism numbers and the most rapidly growing migrant groups. About three-quarters of New Zealand's exports now go to APEC economies.

Another significant factor for New Zealand associated with the APEC review is the responsibility already assumed to be the agency's chair in 2021. New Zealand's performance that year as convenor and chair will come under close scrutiny at home and abroad. Fulfilling the manifold organisational tasks involved will be even more onerous than the previous experience New Zealand had of playing APEC host in Auckland in 1999. There will be opportunities for policy leadership too. As New Zealand demonstrated in 1999 when it launched the initiative called 'Strengthening Markets Framework', with solid support from PECC New Zealand, that added impetus to the shift in APEC's focus from the traditional array of mainstream trade items to a broader economic and regulatory agenda.

APEC came into being in 1989. This was in part a response to the renewed drive towards European integration, and it was largely on the initiative of the Hawke Australian government with strong backing from Japan. Very pertinent at the time to APEC's mandate to foster regional economic integration were the woes of an ailing global economy suffering its most severe contraction since the 1930s. The existing multilateral architecture was struggling to cope with that challenge, reflected in the glacial pace of the WTO Uruguay Round.

Even so, there was initial caution in the region about APEC's likely utility and impact. The early meetings involved only trade and foreign ministers and officials, and produced little more than exchanges of views bereft of conclusions and recommendations. Only after 1993, pressed to do so by the Clinton administration, did the practice begin of APEC concluding each year's programme with a gathering of the heads of government of its member economies. That annual assembly sets a useful deadline for all minor APEC bodies to have finished their yearly work schedule.

Over the near-30 years of APEC's existence, the...

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