APEC’s purpose is missing

by Gregory Clark

Each year we have to ask the same question as world leaders drag themselves across the globe, taking days from their crowded schedules, simply to hand out platitudes on the importance of free trade, the environment or some other trendy topic of the day.

True, the same question could be asked about other fairly meaningless summits — the Group of Eight of the world’s allegedly most important industrial economies (which still manages to exclude China), ASEM (the Asia-Europe forum) and many others. But APEC (the Asia-Pacific Economic Cooperation forum) with its convoluted membership and lack of obvious purpose really should raise eyebrows. As someone peripherally involved from the start, maybe I can throw some light.

A Japanese economics professor, Kiyoshi Kojima, formerly of Hitotsubashi University, is correctly seen as the father of APEC. In the mid-1960s I was a member of his university research group. At the time, Japan’s leftwing was arguing that Japan had no choice but to normalize relations with its communist neighbors to the west — China, North Korea and the USSR — since they had provided the markets and resources crucial to Japan’s prewar development. Kojima set out to prove them wrong.

Instead, he argued, Japan could survive quite well by looking east to the non-communist nations of the Pacific. He proposed a Pacific Free Trade Area — PAFTA — whereby the United States, Canada, Australia and New Zealand would open their markets to Japanese goods in exchange for Japan turning its back on its communist neighbors. And Japan could continue to protect its farmers.

PAFTA was an obvious nonstarter. But Kojima was not dismayed. His idea still had legs. For many Japanese, including even some progressives, the idea of a postwar Japan making a fresh start looking out toward the advanced Westernized nations of the Pacific rather than having to look backward to the dark impoverished Asia, which had caused Japan such trouble in the past, was attractive.

Kojima moved quickly to have PAFTA replaced by PAFTAD — a forum where academics could discuss something called Pacific Free Trade and Development, even if their governments were reluctant to talk about pie-in-the-sky PAFTA plans.

PAFTAD was soon supplemented by PBCC (an equivalent forum for businessmen) and the quasi-official PECC (Pacific Economic Cooperation Council) where both the academics and the businessmen could come together for more discussions, this time with bureaucratic and political endorsement.

Meanwhile, Japan’s Foreign Ministry was toying with various schemes such as ASPAC (Asia-Pacific Community) that would see the noncommunist Asian nations brought together in some vague way. In the event, they all foundered on vagueness and Asian suspicion of Japanese leadership intentions.

Undeterred, Tokyo, with the indefatigable Kojima still at the helm, began to push for something that would allow the wreckage of ASPAC, together with the floundering PAFTAD, PBCC and PECC , all to be amalgamated into some entity enjoying full government backing. It was to be called APEC. That would be in 1989.

From the beginning Kojima’s fingerprints were heavy. For example, to retain his original Pacific Basin concept, APEC has had to include Latin Americans — Mexico, Chile, Peru. Their relevance to Asian trade and development was, and remains, minimal. Indeed, Asian manufacturing interests were, and remain, antagonistic to Latin American interests. Meanwhile the very relevant Asian communist nations, including China, remained firmly excluded.

The problem of APEC sponsorship remained. Tokyo was anxious not to repeat its ASPAC experience where Asian suspicions of Japan had caused so much trouble. So it turned to Australia.

Then Australian Prime Minister Bob Hawke, never reluctant to seek global headlines, was easily persuaded to be the front-runner. And Canberra was very happy to gain kudos as seeming to have promoted an Asian initiative, even though it seems to have done little more since then other than provide a platform for endless conferences on a range of fairly irrelevant issues.

True, APEC has since collected many member nations, including even the once detested communists in China, Vietnam and Russia. But this simply reflects the way governments will always jump at the chance to join any international grouping. They are always afraid of being left out of something, even if no benefit is obvious. This has been especially true of Moscow.

APEC is a testament to the way international groupings develop a life of their own long after they have fulfilled their original purpose. The G8 grouping, originally meant to bring Western powers and Japan into an anticommunist economic and political alliance, is another example even though its original protagonist — Moscow — is now a member.

Hopefully the rise of China and the growing clout of ASEAN (Association of Southeast Asian Nations) will eventually put APEC out of its misery as an Asian grouping. And if free trade is so important, the current reliance on the World Trade Organization and on bilateral free trade agreements (FTAs) seem much more relevant.

Gregory Clark is a former Australian government official and now vice president of Akita International University. A translation of this article will appear at: www.gregoryclark.net