APEC after 10 Years: Performance and Prospects

Abstract

This paper considers the reasons why APEC's potential remains, after its first decade in existence, as yet largely unfulfilled. APEC’s progress is assessed in terms of three periods: 1989 through 1992, when it was primarily in an exploratory mode, probing for direction and ways and means for cooperation; 1993 through 1996, when the big decisions as to structure, goals, methodologies and approaches and so forth were taken; and 1997 to the present, when the issue became one of implementation. APEC’s major achievements were in the early phase and were primarily of a “political” nature, helping to firmly establish the idea of an Asia Pacific “community”. APEC’s "mission statements" of achieving free and open trade and investment in the Asia Pacific by 2010/2020 and sustainable and equitable development in a region seriously challenged on both accounts, were very ambitious, reflecting excitement about Asian growth. The Asian Crisis of 1997-1998, which interrupted Asian growth momentum and cast doubt on the Asian Miracle, deflated the "expectations bubble" surrounding APEC. This experience also suggested that APEC may be better suited and better positioned institutionally to help address the problems of growth than to deal with crises. APEC has further contributed to the deflation of expectations by not meeting its trade liberalization objectives and by not finding a genuinely effective way forward on economic and technical cooperation. There is, however, a continuing fundamental utility in having a high-level networking opportunity for the Asia Pacific region. There is a danger that expectations about APEC have fallen too far and that this potentially very useful instrument of international cooperation might well wither on the vine as capitals look elsewhere to deal with pressing issues. APEC might want to take advantage of the confluence of pressures for change to re-invent itself. The critical body for reform or re-invention within APEC is its senior officials forum (SOM) which needs to off-load the heavy management agenda which it has assumed in order to focus on issues, to provide real leadership and to build support in capitals for APEC's work.

Keywords: APEC, Asia Pacific, regionalism, trade liberalization, economic cooperation

JEL Classification: F55, F13, F15