The idea of an enlarged Asia Pacific economic community is one whose time has come - and gone – several times in recent years. But now it looks like it's here to stay. For some, this marks the emergence of the Pacific Century (PC) and although Europe may continue to capture the front pages, the world's economic and political center of gravity will shift from Europe and the Atlantic to Asia and the Pacific. Others, however, see it as a sign of rising protectionism and the division of the world into competing trading blocs in Europe, Asia, and the Americas. Neither view is quite correct.
The most recent initiative, known by its acronym APEC (Asia Pacific Economic Cooperation), was set in motion by Australia's prime minister, Bob Hawke. It began with a speech by Hawke in South Korea in January 1989 and led slowly to a preliminary meeting of ministerial-level representatives from twelve countries in November.
In his speech, Hawke cited supporting multilateral trade liberalization, lifting Asia Pacific trade barriers, and encouraging regional policy coordination as major objectives. A year later, these remain the declaratory objectives of APEC.
Some give the initiative little chance of succeeding in the long term because the participating nations are separated by vast distances and widely divergent cultures. On the other hand, its mission has never been clearly defined. Given the history of diversity and rivalry in the region, success might well be defined simply, as it is in ASEAN (the association of South East Asian Nations): namely, coming together, a paramount achievement. That yardstick, however, leaves unanswered questions about timing and its future prospects.
There is a carrot-and-stick element in the thinking of Asia Pacific leaders. The answers to the question "why now" rest in conditions both inside and outside the region. The primary answer lies in the area's economic strength (at an all-time high and set to continue) and in developments surrounding three prominent, seemingly contradictory trends in the world's trading system. These are global economic integration, growth of bilateral or regional trading arrangements, and the poor performance of multilateral trade negotiations.
On one level, the speed of worldwide economic integration, fueled by technological change, swelling capital flows, and burgeoning trade, has outgrown the international mechanisms designed to manage change. The rapid march to maturity of the Asia Pacific economies has transformed several countries into both regional and global commercial rivals, not only in such sectors as elect6ronics and telecommunications but also in finance and services.
The speed and magnitude of change have given rise to problems of adjustment as the global system tries to accommodate the new dynamics. One factor is huge regional surpluses, such as Japan's nearly $100billion and Taiwan's $75 billion. Other pressures include measures that in effect would erect protectionist barriers.
Examples of recent trends toward regional or bilateral cooperation include the European Common Market plans for further integration by 1992, the U.S.-Canada Free Trade Agreement, the Closer Economic Relations agreement between Australia and New Zealand, and plans for an Arab cooperation Council.
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