APEC, Struggling to Promote Trade, May Seek New Agenda in 2007
By Hans van Leeuwen
Nov. 20 (Bloomberg) -- The Asia Pacific Economic Cooperation forum, whose 21 members account for half the global economy, may focus on energy and security issues next year as the likelihood of the group meeting its trade goals recedes.
APEC met in Hanoi this year and sought to revive the stalled World Trade Organization talks. The so-called Doha round must conclude in the next few months because U.S. President George W. Bush's negotiating mandate from Congress expires in mid-2007. By next September a Doha deal will likely either be done or dead.
The rest of APEC's trade agenda may also be in doubt. ``Only a supreme optimist'' gives APEC any chance of meeting its 2010 deadline to eliminate tariffs in the region's developed economies, Australian Prime Minister John Howard said on Nov. 18. A U.S.- backed regional free-trade deal is nothing more than a ``long- term prospect,'' APEC's leaders said yesterday in a statement after their annual summit in Vietnam.
``APEC's going through this steady process of reorientation, and in many respects the badging of the organization, which was originally set up to promote trade liberalization, is changing,'' said Alan Oxley, chairman of the APEC Study Center at Australia's Monash University in Melbourne.
Australia, the host of next year's summit, has flagged a shift of focus toward energy and security issues.
Howard told reporters yesterday he wants APEC's priority to be the development of clean-coal technology and other means of reducing greenhouse gas emissions.
The 2007 summit will also consider a plan to set up a coordinated Asia-Pacific regime for regulating nuclear power, Australian Foreign Minister Alexander Downer said on Nov. 17.
``Sharing regulatory information in particular, and making sure we have coordinated regulation of the nuclear industry is in the interests of the nonproliferation regime,'' Downer told reporters in Hanoi.
``We are, as the incoming chair of APEC, going to prepare a work plan that will include a very significant focus on energy cooperation, clean energy and climate change issues.''
Security issues, particularly North Korean leader Kim Jong Il's nuclear test on Oct. 9, dominated the leaders' discussions in Hanoi.
``Everything else is overshadowed by the Kim Jong Il show,'' Jeff Kingston, political science professor and head of Asian Studies at Temple University in Tokyo, said before the meeting.
Not all APEC members are happy at APEC's emerging security agenda. Malaysia's Prime Minister Abdullah Ahmad Badawi said on Nov. 18 APEC should ``return to its original purpose'' as a trade promotion body.
``Its assumption of some security role following Sept. 11 attacks in the U.S. has compromised its original purpose and blurred its focus,'' he told reporters in Hanoi.
Australian business executives who work closely with APEC also want a new direction. They say the group's leaders should steer a region-wide push to make rules and regulations more business-friendly and reduce state intervention in the marketplace.
``Competition policy, good governance, transparency, a sound financial system, removal of government regulations -- all that can give your economy as big a kick as lowering tariffs,'' Mark Johnson, chairman of APEC's business advisory council for 2007, said in an interview last week.
APEC's problems on trade stem from perceptions it won't meet its deadlines. It operates by consensus and has a tiny secretariat of mostly temporary staff. Its members range from the U.S., which accounts for almost one-third of the world economy, to developing economies such as Papua New Guinea, where gross domestic product per capita is just $585 a year.
Any APEC push to switch focus toward cutting red tape and state regulation of business operations may meet similar obstacles to those impeding the group's free-trade push, said Malcolm Cook, program director for Asia and the Pacific at the Lowy Institute in Sydney.
``Competition policy strikes me as having the same problem as sensitive tariffs. Governments aren't going to change their position unless they get something in return,'' he said.
While APEC may struggle to meet its targets, Cook said it remains relevant simply because of who its members are -- in particular, the U.S., which does not belong to other regional organizations such as the East Asia Summit.
``APEC is still the only trans-Pacific body that meets regularly and basically behind closed doors, and with limited pomp and circumstance,'' he said.
The 21 APEC members are Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the U.S. and Vietnam.
To contact the reporter on this story: Hans van Leeuwen in Hanoi at email@example.com .
Last Updated: November 19, 2006 13:55 EST