Building Asia-Pacific Regional Institution: The Role of APEC

Abstract

East Asia, influenced by the Asian Financial Crisis (AFC) of 1997-97 and the current financial tsunami starting from 2008, is undergoing fundamental changes in its regional governance and economic cooperation. The region's inter- state cooperation and institutional building was long perceived as underdeveloped. But now a wide range of economic cooperation and community building initiatives have emerged, and they are profoundly transforming the dynamics of regional economic cooperation and institution-building in East Asia. These regional cooperation programs include, but not limited to: the ASEAN+3 process, the Chiang Mai Initiative, the East Asia Summit (EAS), the Asian Bond Market, and a series of bilateral and multilateral Free Trade Area (FTA) and Economic Partnership Agreements (EPA). Unlike prior attempts to construct a trans-Pacific regional architecture centered on APEC, these projects were driven by the shared sense of purpose among East Asian countries to construct a more Asian-oriented community and to serve the need of better East Asian regional governance. Also, unlike the regional production networks largely shaped by the Japanese economic power and corporate strategies from the 1970s to 1990s, the rapidly rise of the Chinese economic power has become a leading force to reshape regional governance and regional institutional building. To what extent does China influence other East Asian countries’ economic development, and how others have benefited from China's growth? As the countries in East Asia have become increasingly interdependent, leaders in the region have become more determined to build a framework for greater regional cooperation and integration. What regional political-economic organizations would emerge in East Asia? How leaders in China think about future regional cooperation and regional governance in East Asia? This paper attempts to address these questions and shed light on the policy and academic debates about these issues.APEC celebrates its twentieth birthday in 2009. Yet, to many people, APEC's “good old days” have passed and is facing an uncertain future in years to come. APEC has lost its momentum and even relevance to the on-going regionalism in the Asia-Pacific region. For the last two decades, the regional organization has been unsuccessful in attaining some of its ambitious goals such as regional trade liberalization and building a Pacific community. It is now facing a challenge of how to remain relevant in the future Asia-Pacific regional architecture. It relevance could be jeopardized by its hollow dialogue agendas as well as a growing number of regional community building projects in the Asia-Pacific region.There is no doubt that APEC is a useful platform for bilateral and multilateral meetings among regional leaders, and, as the only forum for trans-Pacific dialogues, it is important for stability and prosperity in the Asia Pacific. But besides that, how can APEC contribute to regional institutional building in future? How will it be related to the emerging regional architecture in the Asia Pacific? This article addresses this issue through analyzing its role and weakness in regional community building, the shaping forces for future regional architecture, challenges APEC is facing in the competitive environment of region building, and what possible roles APEC could play in the construction of the regional architecture in the Asia Pacific.