A new purpose for APEC
It’s as good as it gets considering this is APEC.”That was how a foreign newswire quoted President Arroyo’s view of the just-concluded summit of 21 leaders of the Asia-Pacific Economic Cooperation. It is at once a positive assessment of the new initiatives drawn up during the Sydney meet, as well as a subtle indictment of its lack of progress on the key issue of jump-starting global trade negotiations under the auspices of the World Trade Organization (WTO).
The President is no rabid supporter of the WTO. After all, she pushed for delays in the implementation of certain trade commitments early in her term in response to appeals from local industries for import relief.
But as observers have said since its founding, the APEC remains four adjectives in search of a noun, to underline the group’s failure to come up with binding agreements to move forward the global trade agenda.
Frustration has emboldened not a few members to push for the conversion of the consultative body into a free-trade area, much like the growing number of regional and bilateral accords that have risen in the wake of the WTO’s Seattle impasse.
Cynicism over the global trading regime has grown, as the promises of free trade have yet to bear fruit. Instead of more jobs and higher incomes, free trade destroyed homegrown industries and wiped out jobs, especially in the developing world.
This is because the developed world has yet to dismantle barriers that have prevented their poor counterparts from shipping more of their produce. As unemployment and poverty push more of the developing world’s population to seek jobs abroad, the developed world responded by further raising barriers to the movement of labor, especially after the 9/11 terror attack.
In contrast, footloose capital mostly from the developed world lay waste developing markets in what a number of experts is calling “toxic finance,” an apparent swipe at the developed world’s failure to rein in its hedge funds and greedy money-men.
This is exactly how the polemic on substandard exports, triggered by China’s poor safety record, is shaping up: Beijing, as the self-appointed spokesman of the developing world, is trading barbs with the United States and other developed countries that issued recalls of the mainland’s products.
This word war, conveniently framed as a battle between the developed and the developing world, however masks the tensions among members of each bloc. Among the rich countries, the US and the European Union remain miles apart on farm subsidies.
With regard to China’s safety record, other developing countries, mostly in Southeast Asia, have their issues with Beijing. China’s refusal to acknowledge its substandard shipments risks a trade spate not only with developed countries, but also with its developing Asian neighbors.
What used to be an argument between the developed and developing worlds has degenerated to shouting matches and bickering between and among the rich and the poor members of the WTO. In short, the global trading order is in disarray, which is exactly what free traders had warned about years ago if the WTO wasn’t organized soon.
Amid this chaos, we however believe that the APEC may have found a new purpose. It however has to rise to the challenge and help the WTO police its ranks. Standards must be imposed, but the consensus-building approach the APEC is known for can soften increasingly hard positions.
If it were to persist in its role as an informal consensus-building mechanism for the global trading regime, then APEC should be allowed to smooth the trading order’s rough edges. Barring that, then the time to wind down the group is long overdue.
