PACIFIC BASIN ECONOMIC COUNCIL
MAIN PAGE | CLIPS | 1998 | COMPANIES SAY IT'S TIME

Companies say it's time for APEC to deliver the goods Barry Wain The Asian Wall Street Journal Publication Date Unknown HONG KONG -- Almost from the start, critics have derided the Asia-Pacific Economic Cooperation forum as a talking shot that’s long on promises and short on results. Now, seven years after APEC's formation, sections of the business community are joining those early naysayers in what appears to be a growing band of APEC skeptics. Indeed, for private companies that have forged the so-called East Asian economic miracle with little help from regional governmentt organizations, the key question has become: What does APEC add to the formula? APEC enthusiasts have plenty of answers. "We give business people access -- real access to the policy process," says Douglas Ryan, director of public affairs for the APEC secretariat in Singapore. "They haven't had this before on a regional level." And Fred Bergsten, an independent American trade specialist, credits the first APEC summit In 1993 with generating the pressure on Europe to conclude the protracted Uruguay Round of global trade talks. He quotes one European negotiator as telling him at the time: "It sent us a clear message that you in that region had an alternative, and we didn't." Lacking 'Deliverables' APEC Is rated a success in many ways, but producing Immediate, concrete benefits for business, deliverables, "as the jargon has it -- isn't use of them. Its achievements thus far are mostly geostrategic -- building a community of 18 diverse economies; establishing habits of dialogue among governments. some of them historical and ideological rivals; and keeping (the U.S. involved in Asian affairs. But it's the emergence of these deliverables that the business sector will be looking for at this year's summit. "It's theme for APEC to deliver", says Robert Lees, Secretary General of the Pacific Basin Economic Council, a region-wide business association established nearly thirty years ago and representing 1,200 executives. "They’ve got to come up with some tangibles." To be sure. APEC has adopted a grand vision – free trade in the region by 2010 for developed economies and 2020 for the rest – but for most people that seems too remote to matter. The decision to make liberalization voluntary, rather than legally binding, has added to the doubts about APEC. Moreover, too often member governments talk and act as if they aren't serious about their commitment to liberalization. For example, Indonesia during the past year took a step backwards in sever important sectors, including the automobile industry, where a son of President Suharto was given big tax breaks to produce a national car." The U.S. also upset Asian Pacific garment producers in July by changing the country-or-origin rules underpinning the quota system, even though quotas are supposed to be steadily reduced: and abolished by 2005 under the Uruguay. Round agreement. Even some firm supporters arc beginning to question whether APEC is going to! make a significant difference, given that regional countries are opening up[anyway as they compete for foreign investment a-.id markets. Those supporters seek hard evidence that it is having an impact. APEC's failure to agree to a number of basic measures urged by business. such as a multiple re-entry APEC visa, dismays many and stirs them to ask how can it tackle more complex and sensitive issues. The APEC Business Advisory Council now the official voice of the private sector, has recommended an APEC visa this year. The Philippines, taking the lea;d as the current APEC chairman, has announced that it will introduce such a visa, but few other members is expected to follow suit. Without the participation of the larger economies, especially the U.S. and China., which are considered most unlikely to take part, the arrangement will be of limited value. A Diversity of Nations APEC defenders protest that it is unfair to expect achievements so soon when concensus has to be found among economics ranging in size and sophistication from the U.S. to Papua New Guinea. One Western official, who declines to be identified, cites competition policy to make his point. "Quite a few people sitting around the table don't even have competition policy law; and regulations." he says. "An awful lot of spadework has to be done to bring everybody up to a kind of common level from which we can start to talk to each other seriously." The initial offers from members are laid out in Individual Action Plans that were issued last week. While come of those who have examined the plans were disappointed, others re(yard them as a reasonable first step. Almost everyone agrees that tile plans increase transparency considerably. They will provide a snapshot of each members current import regime, though insiders say some economics are still concealing details. In any event, analysts maintain that if APEC is going to yield deliverables in the near future, it will be in the field of trade in(I investment facilitation rather than liberalization.- Facilitation covers everything from the harmonization of customs documentation to mutual recognition of product standards and testing procedures. "The guy who owns a furniture business may say you haven't reduced tile tariff on my furniture yet," says the APEC secretariat’s Mr. Ryan. "But what I we can tell him is that we're making it a little bit easier for you to do business across borders." Promises Cesar Bautista, Philippine secretary of trade and industry: "we are going to have deliverables this year."