APEC: Continuity & Evolution

By Monica Whaley

President Obama attending APEC 2010 in Japan. Monica Whaley examines APEC's history and its continuing centrality to pursuing U.S. economic interests in the Asia-Pacific. Source: U.S. Embassy Jakarta, U.S. government work.

Enough with the ‘clever’ jibes about silly shirts or acronym fatigue. Asia-Pacific Economic Cooperation (APEC) is a robust, reliable and flexible “multi-tool” in the United States’ foreign and economic policy toolkit that has served U.S. interests effectively for more than 20 years.  Since 1989, APEC has withstood a whole slew of ebbs and flows, shocks and disruptions, distractions and pivots in U.S. global economic policy while remaining a steadfast instrument for advancing U.S. interests in the region. As former Cargill CEO Ernie Micek used to say with some regularity when he was a member of the APEC Business Advisory Council (ABAC), “If APEC didn’t exist, we would be scrambling to create it.”

In the post-WWII years, when new U.S.-backed global institutions like Bretton Woods, the United Nations and the General Agreement on Tariffs and Trade (GATT) were getting established, the United States strongly resisted any attempts to navigate trade and economic issues outside of the confines of the GATT or of direct bilateral or unilateral discussions.

After the United States struggled through the economic recession of the late 1970s, the 1980s emerged as a decade when Japan’s economy was booming, ASEAN countries were glistening with promise, and China’s first steps towards opening up gave the first hints of its tremendous potential.  During this dynamic period there was a movement afoot led by Malaysia to create an East Asia Economic Caucus – a bold and confident economic club of the fast-moving Asian giants and “tigers” that did not include the United States or any non-Asian economies around the Pacific.

It was at this time that Secretary of State James Baker uttered the oft-quoted line that the United States would oppose any attempt to “draw a line down the Pacific” that left the United States on the outside of any emerging regional architecture, and many of the economies in the region felt U.S. engagement in any Asia-Pacific construct was critically important for the long-term viability of any such initiative.

Secretary Baker had both geopolitical and economic interests of the United States in mind, and ensuring that economic dialogue in the Asia-Pacific region included trans-Pacific voices – at first just the United States and Canada, but expanding over the years to include Mexico, Peru and Chile – became a U.S. priority. Seasoned U.S. diplomats and economic policy experts began in the late 1980’s to build support for the Australian initiative now known as APEC – a 21-“economy” international forum inclusive of both sides of the Pacific that addresses trade and economic liberalization, facilitation, and capacity building within the Asia-Pacific.

The Pacific community that is APEC has continued to march steadily forward — reliably, if not always speedily — and has been an important asset in the United States’ global policy toolkit.  With its unique incorporation of private sector participation throughout the forum, APEC has established a way to make very practical progress on a whole range of economic and trade policy issues in trade facilitation, enabling new technologies, investment facilitation, promoting transparency and good governance, among others. At the same time, APEC provides the region with a table around which the leaders of these economies regularly gather to discuss not just economic issues, but also broader challenges the economies of the Asia-Pacific share, such as responses to natural disasters, managing health crises, and addressing terrorism.

While gatherings of Presidents and Prime Ministers now seem almost commonplace, when former President Clinton decided to gather the leaders of APEC’s economies on Blake Island near Seattle in 1993 it was a revolutionary concept for APEC. Some of the leaders had never met one another, and certainly there was no sense of “esprit de corps” among these very diverse players.  While the “silly shirts picture” came to symbolize APEC in the public imagination, very real and important relationships which had not existed prior to APEC were built amongst these leaders.  These relationships made it possible for APEC finance ministers to gather in the wake of the 1997 devaluation of the Thai bhat – the harbinger of the Asian Financial Crisis; for foreign ministers to meet quietly on the margins of the 1999 meetings in Auckland, New Zealand to address the East Timor crisis; for former President George W. Bush to develop the first phases of the international coalition aimed at responding to international terrorism when APEC met in October of 2001 in Shanghai, China, just three weeks after the 9/11 attacks.

APEC has not just been a reactive forum; it has also been responsible for pro-active, visionary policies to address global economic realities – including the original “Bogor Goals” commitment to free trade  and investment made in 1994 when Indonesia last hosted APEC; pledges to bring the benefits of the internet and technology revolution to the broadest possible number of citizens in the region, a long-term vision to create a “Free Trade Area of the Asia Pacific,” expanded opportunities for women in the economy and exploration of the potential of green growth through the freer trade in environmental goods and services.

APEC is the flexible yet surprisingly strong bamboo scaffolding that supports the trans-Pacific dialogue — not only on trade and economic policy but also on broader geopolitical and strategic issues.  It has remained a “go-to” forum for the United States to engage its neighbors around the Pacific across the whole spectrum of U.S. national interests.

This coming October, APEC returns to Indonesia for the 20th annual gathering of APEC Leaders. I am headed off to the region this week to meet with planners for the Bali meetings as well as those who will lead private sector efforts in APEC for the China year (2014), the Philippines chairmanship (2015) and Peru (2016).  My next entries in this series will focus on the private sector’s stake in APEC and a preview of Indonesia’s APEC priorities, as well as look ahead at APEC’s future horizon.

Ms. Monica Whaley is President of the National Center for APEC. Follow the organization on twitter @NCAPEC.

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