The APEC economic leaders' meeting in Chile, which begins Saturday, will be the first international meeting where the two sides of the Taiwan Strait will meet after Chinese President Hu Jintao (胡錦濤) took over as chairman of China's Central Military Commission. It will also be the first such summit after the US presidential election.
The numerous suggestions for free trade agreements in the Asia-Pacific region in recent years seem to be a reflection of a dissatisfaction with APEC's inability to coordinate regional economic policy during the East Asian financial crisis. Because APEC's 1994 Bogor Declaration declares that the integration of the region's advanced economies shall be completed by 2010, next year will be an important halfway point. The question of success or failure will have a major impact on the future of APEC. These factors make this year's APEC meeting extraordinarily important.
APEC is the only multilateral international organization in the Asian region in which Taiwan is a member. The question of how to best use APEC is therefore of practical importance in the current stage of Taiwan's multilateral diplomacy. At the same time, after the Asian economic order dissolved in the mid-1990s, no new "healthy" economic order has appeared. The wave of suggested FTAs appearing now to mostly exclude Taiwan due to Chinese pressure, even though this exclusion runs counter to the APEC spirit of "open regionalism."
If these agreements keep proliferating, they will weaken APEC, because such agreements block Taiwan's road towards regional integration. At the same time, APEC's ability to act behind the scenes will be reduced due to the confusion over its functions, and this will have a very negative effect on Taiwan's economy. Taiwan therefore needs to apply advanced strategies when looking at APEC development. Aggressive measures will be required during the APEC leaders' meeting.
Simply speaking, the nation's strategic interests in regional economic matters includes the hope that APEC will continue to be useful, and that its importance will override that of other regional organizations and trade agreements. After making APEC irreplaceable, ways must be found to expand APEC's role and the issues it should cover.
Some people believe that APEC has outlived its usefulness and suggest that a new multilateral organization be established. However, at a time when most Asian countries are unwilling to face Chinese political pressure head-on, it is very possible that Taiwan would be unable to join a new organization.
At the same time, Beijing is certain to use the establishment of a new organization to weaken the regional influence of the US and Japan and to set up China-centered political rules. Examples are the Boao Forum for Asia and the Shanghai Cooperation Organization, both set up by China. China is also using the six-nation talks on the North Korean nuclear issue to redefine the strategic position of the US, Japan and South Korea on the Korean Peninsula.
Taiwan must avoid giving Beijing an opportunity to build an Asian strategic order centered on China, which would increase the pressure on and isolation of Taiwan. A regional political and economic arrangement biased towards China runs counter to the establishment of an Asia-Pacific order beneficial to Taiwan's democracy. Based on these reasons, there's an inescapable conclusion for Taiwan: APEC must be strengthened.
To this end, there are a few issues that Taiwan should give particular attention at the APEC meeting in Chile. It is true that the development of a free trade agreement for the Asia-Pacific Region might integrate all economic entities in the region and cancel out the exclusion effects of recent bilateral agreements. But many member countries doubt whether such an agreement would comply with the spirit of the World Trade Organization (WTO).
They also see the regional free trade agreement proposal as making it impossible for APEC to meet the goals of the Bogor Declaration -- the success of which are seen as crucial to the organization's existence.
If APEC members see an Asia-Pacific free trade agreement as the death knell for the Bogor Declaration, they could react simply by lowering their expectations of APEC. But they could also go so far as to suggest setting up a new mechanism for regional economic integration. If the regional free trade agreement is seen as conflicting with the spirit of the WTO and doubts grow concerning APEC's function, then Taiwan's decision whether or not to support such an agreement will no longer be a straightforward issue. It will have to involve an explanation of what kind of regional free trade agreement Taiwan feels is reasonable.
Next year will see a review of the first stage goals set out in the Bogor Declaration. South Korea, Australia, Canada, Japan, China and Thailand have put forward their respective reform plans for APEC. Due to APEC's crucial importance to Taiwan's participation in regional Asian activities, Taiwan must pay close attention to the proposed reform agendas and resulting alliances. It must also prepare its own reform agenda.
The differing agendas for APEC reform will cause the group to splinter into various international alliances. We all remember how last year the G22 grouping, led by India and Brazil, benefited from the WTO's failure in the Cancun talks, and how Australia won US approval by opposing the G22 countries. As a result, free-trade talks between the US and Australia, which had ground to a halt over agricultural issues, were resolved with the signing of a US-Australian FTA late last year. Such strategic opportunities are the result of active maneuvering, and Taiwan must actively develop a strategy in its APEC reform agenda to maximize its political and economic gains.
APEC also plays a role in the development of cross-strait relations. In the past, APEC has dealt with the cross-strait relationship from the perspective of the unfair treatment of Taiwan, in particular Chinese pressure on Taiwan. After the Sept. 11 attacks, APEC stopped discussing purely economic issues and began putting counter-terrorism efforts on its agenda. As a result, we must determine how to use APEC, a forum with representatives from both Taiwan and China, as a platform for promoting cross-strait dialogue.
Past interaction between Taiwan and China in APEC has never been discussed in detail. "Red" Americans who lobbied the US government to grant China permanent normal trading relations claimed that the measure would help China enter the WTO, and that it would help deal with cross-strait interactions. Such arguments often neglected to mention cross-strait interaction in APEC. Now is the time to review the role to be played by APEC in cross-strait interaction.
To sum up, in participating in this year's APEC meeting, Taiwan should adopt a comprehensive strategy based on its view of the Asia-Pacific economic order and its hopes for a regional integration mechanism. Taiwan should act strategically to prevent the rise of a regional arrangement detrimental to its interests, while actively building an environment beneficial to regional integration and the strategic order.
Although the question of who leads Taiwan's delegation and what issues are proposed are indeed important, the nation cannot afford to do without a broad strategic vision that can incorporate and unite the issues mentioned above.
Lai I-chung is the director of foreign policy studies at the Taiwan Thinktank.
Translated by Perry Svensson
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