The APEC summit has concluded. This year's declaration calls for a new round of WTO negotiations, as soon as possible.
Those member countries opposed to the announcement seem to have forgotten the 1994 APEC declaration, which proclaimed trade and investment liberalization targets for the year 2010 in developed economies, and 2020 in developing economies. As these countries have lost sight of trade and investment liberalization, the question of APEC's future direction becomes a matter worthy of concern.
APEC has never functioned as a compulsory economic organization. It doesn't force its members to open markets at a certain speed or to adopt liberal policies. It strives instead to be sensitive to differences in member nations' cultures, societies, and varying stages of economic development, as well as the issues of optional liberalization and open regionalism.
The environment of global market liberalization formed after the establishment of the WTO in 1995, along with the "spontaneous" liberalization adopted successively by thriving Southeast Asian economies, provides most of the background for APEC's decision in 1994 to establish the 2010 and 2020 trade and investment targets. At that year's summit a consensus was even reached to set regional trade as its highest priority. It seemed as if APEC had become a solid economic organization.
In 1997, APEC proposed fifteen products -- including forestry and fish products -- for early voluntary sectoral liberalization (EVSL). It intended to use the WTO's Information Technology Agreement (ITA) as a negotiation model from which to convince its 18 member economies to find maximum convergence on free trade amidst their many differences. The move failed, however, to interest those countries affected by the Asian financial crisis. In addition, individual countries' differing interests and varying commitments in terms of protecting domestic industries further exposed the difficulties inherent in APEC's liberalization.
The differing views expressed by APEC members at the recent Brunei summit regarding the question of whether to set a time for a new round of WTO talks shows that APEC, in its promotion of liberalization, must face the following obstacles:
1. Lack of political will in some member nations (like Southeast Asian countries) to liberalize their unstable economies and political systems, as well as sensitive industries and departments (forestry, fishing, chemicals, etc).
2. The fact that the setting of discussion topics for the WTO's new round of negotiations has been led by countries like the US, Japan, Canada and European countries. From the WTO's third ministerial conference held in Seattle in 1999, the US and European countries advocated bringing the issues of trade and competition, trade and investment, and environmental protection into future negotiations. The US insisted that core labor standards and trade issues be linked, and suggested that a task force be established within the framework of the WTO to advance discussions of these issues. The US proposal incurred vehement opposition from the majority of developing countries. Naturally, when these APEC members were unwilling to play cheerleader to America's promotion of new WTO talks, they brought pressure upon themselves.
Additionally, the majority of APEC members are presently attending sub-regional free trade negotiations. Even though members participating in the negotiations all stress "no exclusiveness," and while the talks are a chance to create trade liberalization for APEC and WTO, they still influence members' political will and level of investment in APEC's trade and investment liberalization. The sub-regional free trade negotiations thus negatively affect the loyalties of APEC members.
Among the structural impediments to APEC's trade and investment liberalization, one key issue is bound to be that of having to change from past trade and investment liberalization phenomena to ones that include substantial cooperation in the areas of finance, technology, skills, trade expansion, e-commerce cooperation, and the coordination of laws and regulations. Collectively handling and tackling new issues either via discussions among regional members, or by cooperating with multi-lateral institutions, will also become one of APEC's procedural tasks.
As for Taiwan, more is needed than mere promises to propose the liberalization measures needed to usher in beneficial economic development. If any benefit is to be derived from participation in the APEC summit, then Taiwan must develop global strategic management systems, as well as cooperation in the areas of multi-national technology, skills, finance, and the knowledge economy. Finally, there must be active participation in economic technical cooperation work.
Tsai Horng-ming is the Executive Secretary of the Chinese National Federation of Industries.
Translated by Scudder Smith
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