APEC - Leading the Way
Op-Ed by George Yeo, Foreign Minister of Singapore
THE growing cooperation across the Pacific is reshaping the world. After a
century of war and revolution, East Asia has taken off. Transpacific trade,
which long overtook transatlantic trade, continues to grow. An intricate
web of political, economic and cultural relations increasingly binds the
countries on the Pacific Rim.
The most important institution bringing the two sides of the Pacific
together is the Asia-Pacific Economic Cooperation (Apec) forum. Established
20 years ago to promote freer trade and investment, it now comprises 21
economies that account roughly for half of global gross domestic product
and global trade. It is by far the faster-growing half.
In November 1989, in the same week the Berlin Wall fell, foreign and trade
ministers from 12 countries held Apec's inaugural meeting in Canberra. The
inclusion of countries on both sides of the Pacific was deliberate. For the
politics in the region to stay peaceful and for trade to continue
expanding, a line must not be drawn down the middle of the Pacific. That
became a core founding principle.
At the Singapore ministerial meeting the following year, bringing in what
was then commonly termed the 'three Chinas' - mainland China, Chinese
Taipei and Hong Kong - became a key topic of discussion. If all three had
not been included, there would have been a gaping hole in Apec. After
intense negotiations, China agreed to the participation of Chinese Taipei
and Hong Kong in the 1991 Seoul meeting, not as countries but as economies.
For this reason, national flags are never flown at Apec meetings.
Two possible reasons could explain why China was prepared to accommodate
Chinese Taipei at that time. First, Deng Xiaoping was determined to press
on with China's reforms and opening up. Second, cross-strait relations had
been steadily improving. I remember a relaxed luncheon conversation at the
1992 ministerial meeting in Bangkok involving China's Li Lanqing, Chinese
Taipei's Vincent Siew and Hong Kong's Brian Chau.
When the United States hosted Apec in 1993, then-President Bill Clinton
convened the first Apec Economic Leaders' Meeting at Blake Island. That act
of leadership transformed Apec and gave it global prominence. It helped to
bring about the conclusion of the Uruguay Round. Apec has become the
principal forum for East Asian leaders to engage the US president every
year. It sits at the apex of regional forums like Asean Plus Three and the
East Asia Summit.
A second act of leadership the following year led to the announcement of
the Bogor Goals of free and open trade and investment among industrialised
economies by 2010 and among all economies by 2020. That Indonesia, which
still had a protected economy at that time, should make this bold move was
remarkable and a tribute to the vision of then-Indonesian President
Suharto.
Step by step, Apec developed form and function. Regular meetings of
leaders, ministers and officials forged personal bonds of friendship that
proved invaluable when crises erupted - like the 1997-98 Asian financial
crisis, Timor Leste's independence in 1999, Al-Qaeda's attacks on the US on
Sept 11, 2001, the outbreak of Sars in 2003 and last year's global
financial crisis.
The most important relationship in Apec is that between the US and China. I
remember vividly when China was Apec host in 2001.
In April that year, the Hainan EP-3 incident had suddenly chilled relations
between Beijing and Washington. When US Trade Representative Robert
Zoellick arrived for the Apec Trade Ministers' Meeting in Zhouzhuang in
June, he was received with a certain coolness. Mr Zoellick broke the ice
with his words of friendship, to which China's Commerce Minister Shi
Guangsheng responded in kind the following day.
On the sidelines, they finally agreed on China's terms of entry into the
World Trade Organisation (WTO), after negotiations that went late into the
night. After Sept 11, the two countries cooperated in the war against
terrorism. When then-President George W. Bush flew into Shanghai in
October, Chinese fighter planes escorted Air Force One into China's
airspace. Without Apec providing a ready forum, it would have been more
difficult to restore good relations between the two countries.
The theme for the Leaders' Meeting in Singapore this year is 'Sustaining
Growth, Connecting the Region'. Keeping the Asia-Pacific region peaceful
and open to trade and investment must continue to be our collective goal.
Resisting protectionism is a particular challenge because of the global
economic crisis. With the Doha Development Agenda not making progress, it
is crucial for the Apec economies to take the lead.
The best way to achieve the Bogor Goals is a Free Trade Area of the
Asia-Pacific. Announcing this as a long-term objective will also help push
forward the Doha negotiations. In the meantime, a growing matrix of free
trade agreements has facilitated the flow of trade and investment
throughout the region. One of them, the Trans-Pacific Strategic Economic
Partnership (TPP), merits particular mention.
Currently it is a free trade agreement among four relatively small
countries - Brunei, Chile, New Zealand, and Singapore. Last year, the US,
Australia, Peru and Vietnam expressed interest in joining the TPP.
Enlargement of the TPP will have a positive impact on trade dynamics in the
region.
Among the 21 Apec economies, there are big and small countries, rich and
poor, strong and weak. Together, they reflect the make-up of the United
Nations and the WTO. What Apec is able to achieve peacefully will point the
way forward for the rest of the world.
The Singapore meeting comes six weeks after the last G-20 meeting in
Pittsburgh, which was attended by 10 Apec leaders. We can therefore expect
continuity in the flow of discussion from Pittsburgh to Singapore, and from
Singapore to the next two G-20 meetings in Canada and South Korea before
the next Apec Leaders' Meeting in Japan at the end of next year. The G-20
is perhaps the most important agent of economic change in the world today.
A close overlap between the G-20 and Apec agendas will help this process of
change to take place in a consultative and inclusive way.
The end of the Cold War 20 years ago opened a new chapter in world history.
After 20 years, Apec has become an indispensable forum in the Asia-Pacific
region. Looking ahead, Apec can help create a better future for the whole
world.
This op-ed was published in the Straits Times on 11 November 2009.
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