APEC: Evidence and Implications for Policy

Abstract

Against the backdrop of the theory of economic cooperation and integration, this paper examines and analyses the mechanics and dynamics of the Asia-Pacific Economic Cooperation (APEC) forum . Available evidence indicates that the APEC has emerged as a building block of the World Trade Organisation (WTO) and can offer solutions to a wide array of problems in international business. Possibly the greatest potential of this forum lies in its strength to bring several economically diverse and geographically dispersed countries together to address the oft-quoted issues and problems in international business in the Asia-Pacific region. However, it is argued that APEC is not the only policy track that is going to be used by the member-states to protect and promote their business interests. For instance, the ASEAN Free Trade Area (AFTA) and the North American Free Trade Area (NAFTA) do provide legal frameworks for some of the APEC members to iron out tariffs and other invisible barriers to international trade. The idea to promote “open regionalism” in the Asia-Pacific region is also subject to scrutiny in this paper. We argue that this emphatically articulated idea by APEC is in line with the WTO charter. One may, however, consider the bilateral and multilateral actions within the APEC with regard to “open regionalism” before trying to develop a theory of open regional groupings. These actions will significantly determine how APEC can actually function in an environment characterised by discriminatory regional groupings and anti-free trade lobbies manifested in recent violent protests in USA, Switzerland and Thailand. Finally, we examine various scenarios for policy following the 1999 APEC Summit in New Zealand.