by Walden Bello, in The Nation Newspaper, 17 November, 1998, Bangkok, Thailand

As the Apec Summit begins, Walden Bello writes that no other grouping has generated so much heat yet yielded so little in terms of real impact.

KUALA LUMPUR — A friend recently compared the Asia Pacific Economic Cooperation (Apec) to a horse that is desperately flailing about after breaking its leg, waiting for the merciful bullet that will put it out of its misery.

My colleague’s metaphor is probably overly grim, probably even incongruous, but it does drive home the point that, as the annual Apec summit is in session, it is time to seriously think about phasing the organisation out of existence.

Surely, one might object, a grouping that sponsors scores of ministerial, sub-ministerial, and working-group meetings every year, from one end of the Great Ocean to the other, cannot be dismissed as irrelevant. Of course, as a social club, Apec is a great success, providing a good excuse for bureaucrats to spend taxpayers’ money on tourist junkets that mask as exercises in economic diplomacy — where it is not uncommon for the negotiation of affairs of state to provide the perfect cover for the pursuit of affairs of the less cerebral kind.

Let us face the fact that none of these events — from the meetings of environmental bureaucrats to ”clean up the Pacific”, to business-government conferences on how to support small and medium businesses, to the recent ”government-NGO meeting” in Manila to ”advance gender equity” in Apec — have produced anything beyond nice sounding declarations. No other regional association, not even Asean, has generated so much heat yet yielded so little in terms of real impact.

Apec came into being in the late eighties when Tokyo proposed the formation of a region-wide consultative group that would provide technical cooperation on trade and investment matters along the lines of the Organisation for Economic Development (OECD) in the trans-Atlantic area.

Australia took the initiative in the early 1990s, when it seemed that the world might break up into regional blocs that would leave Canberra with no one to form a trade partnership with except New Zealand and Antarctica. The Australians, however, took the nascent grouping on a different tack from Tokyo’s original thrust, that is, from a loose consultative body to a formal free trade area.

Seeking a bargaining chip to deploy against the Europeans in the then stalled Gatt negotiations, the US took over the leadership of the effort to turn the grouping into a free trade area in 1993. Prior to the Seattle Summit of that year, Washington’s academic point man in trade affairs, Fred Bergsten, brought together several free-trade ideologues from the other countries, designated himself and them as ”Eminent Persons”, and proceeded to draft a blueprint for mandatory, comprehensive, and simultaneous trade and investment liberalisation. Bill Clinton lobbied hard for its endorsement in Seattle, but failed to secure this from Asian leaders who were jolted into passive resistance by Malaysian Prime Minister Mahathir Mohamad’s boycott of the meeting.

By that time, Apec was dividing into what Australian commentator Kenneth Davidson called ”Anglo-Saxon” free traders led by the US, and Asian governments that continued to be committed in practice to an activist state role in the economy, expressed in, among other things, preferential trade and investment arrangements for local firms.

But Washington and its stalking horse, the ”Eminent Persons’ Group”, were undeterred. During the 1994 summit in Bogor, Indonesia, after winning over the host, President Suharto, they were able to pressure the Asian bloc into endorsing the EPG’s vision of borderless trans-Pacific trade by the year 2020. This triggered a whole year of media hype about the birth of a new Nafta-like free trade area.

But Washington’s cheerleaders forgot one thing — Osaka was going to be the site of the 1995 summit, and in Apec it is true that whoever hosts the summit influences its outcome. In an impressive exercise of one-on-one, behind-the-scenes diplomacy, the Japanese, in the year leading up to the summit, were able to line up most of the Asian countries behind a declaration that whatever trade liberalisation would take place would be voluntary, flexible, and non-binding.

The Bogor vision of a concerted, mandatory, and comprehensive process leading to free trade was effectively derailed.

Events were anti-climactic after the Osaka shoot-out. The Subic Summit in November 1996 is mainly remembered for anointing the Philippines as Asia’s latest ”tiger” — a status that lasted less than a year, up to the collapse of the peso in July 1997.

As for Vancouver last year, who now remembers the vague agreement on ”early voluntary liberalisation” in ”15 industry sectors” that few governments had any intention of taking seriously? Vancouver will be remembered instead as the summit when the humbled Asians, like the Gauls of old, came on their knees into Anglo-Saxon territory to be lectured by Clinton and the US Treasury duet of Robert Rubin and Larry Summers on how to put their huts in order along the lines demanded by the IMF.

Apec is effectively in stale-mate, and all the players know it. Asean sees it as a rival to the Asean Free Trade Area (Afta) that must be emasculated. The Japanese, in typical fashion, know it is toothless but behave as if it mattered. The Americans now prefer to employ their arm twisting on trade and investment in other arenas, in other ways, through threats of unilateral trade action or by attaching trade and investment conditionalities to the IMF programmes imposed on the battered Asian economies. However, no one dares leave the grouping for fear that in their absence, some other faction might gain the advantage and ram through its vision for Asia-Pacific trade relations.

With his usual acute gift for sniffing out opportunities to promote the interests of both self and country, Fred Bergsten recently came up with a new raison d’etre for Apec, and that is to serve as the mechanism for formulating an expansionary programme to spend the US$30 billion Japan recently offered the troubled Asian economies. To which, of course, the Japanese, who are tired of having Washington direct economic programmes for which they put up the bulk of the funds, are likely to say ”Thanks, but no thanks”.

Which brings us to Mahathir, the old nemesis of the Apec free-trade scheme. Mahathir ought to read the handwriting on the wall and go.


Walden Bello is professor of sociology and public administration at the University of the Philippines and co-director of Focus on the Global South in Bangkok.