Political Handbook of the World

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ASIA-PACIFIC ECONOMIC COOPERATION (APEC)

ESTABLISHED
At a meeting of foreign and economic ministers of twelve nations at Canberra, Australia, on November 6-7, 1989; objectives and principles set forth in Seoul Declaration approved during ministerial meeting at Seoul, South Korea, November 12-14, 1991; Declaration of Institutional Arrangements adopted September 10-11, 1992, at Bangkok, Thailand.

PURPOSE
To provide a forum for discussion on a broad range of economic issues and to promote multilateral cooperation among the market-oriented economies of the region.

HEADQUARTERS
Singapore

PRINCIPAL ORGANS
Annual Ministerial Meeting (all members), Senior Officials Meeting (all members), Working Groups, Secretariat.

EXECUTIVE DIRECTOR
Shiyiro Imanishi (Japan).

MEMBERSHIP (18)
Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Philippines, Singapore, Taiwan ("Chinese Taipei"), Thailand, United States.
Observers: Association of Southeast Asian Nations, Pacific Economic Cooperation Conference, South Pacific Forum.

OFFICIAL LANGUAGE
English

ORIGIN AND DEVELOPMENT
In early 1989 (then) Australian Prime Minister Robert Hawke proposed that a permanent body be established to coordinate economic relations among market-oriented nations of the Pacific rim, with particularly emphasis to be given to dialogue between Western Pacific countries and the United States. The proposal was endorsed by the Pacific Economic Cooperation Conference (PECC-a group of business, academic, and government representatives who had been holding informal discussions since 1980) and the first APEC meeting was held at Canberra, Australia on November 6-7. Ministers from twelve nations (Australia, Brunei, Canada, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and United States) attended the inaugural session, debate centering on how to proceed in adopting formal APEC arrangements.
Due primarily to concern among some members of the Association of Southeast Asian Nations (ASEAN-see separate article) that they might be "overwhelmed" by the "economic giants" such as Canada, Japan and United States if the organization moved too quickly, the Canberra session decided to keep APEC as a loosely-defined, informal grouping, officially committed only to an annual "dialogue" meeting. As regional economic cooperation gained momentum in other areas of the world, however, pressure grew within APEC for a more structured format. Consequently, the Ministerial Meeting at Seoul, South Korea, in November 1991 adopted a declaration outlining APEC's objectives, established additional organizational structure, and approved the membership of China, Hong Kong, and Taiwan. The "institutionalization" of APEC was completed during a Ministerial Meeting at Bangkok, Thailand, on September 10-11, 1992, with the decision to establish a permanent Secretariat in Singapore as of January 1, 1993. Mexico and Papua New Guinea were admitted in November 1993 while Chile's membership application was approved effective November 1994. The latter was the subject of debate within APEC, some officials suggesting that admission of South American countries could cost the organization its "focus". Consequently, a moratorium on any additional APEC members was declared until at least 1996 (see Activities, below, for subsequent developments).

STRUCTURE
APEC's governing body is the annual Ministerial Meeting, whose chairmanship rotates each year among the members. Since 1993 overall guidance has been provided by a summit of the heads of state and/or government of APEC members, who have been meeting annually immediately following the Ministerial Meeting. Responsibility for policy implementation rests with a Senior Officials Meeting (SOM), which convenes as necessary. Reporting to the SOM are ten Working Groups (Trade and Investment Data, Trade promotion, Investment and Technology, Human Resource Development, Regional Energy Cooperation, Marine Resource Conservation, Telecommunications, Transportation, Tourism, Fisheries) . . .
groups (Regional Trade Liberalization and Economic Policy). A small Secretariat is led by an Executive Director appointed for a one-year term by the nation chairing the upcoming Ministerial Meeting. In addition, an Eminent Persons Group was established in 1992 to analyze how trade should be conducted in the region to the year 2000.

ACTIVITIES
The November 1992 Ministerial Meeting authorized a $2 million annual budget for APEC's new permanent Secretariat and directed it to establish an electronic tariff data base for the region, survey members regarding investment regulations, and study ways to harmonize custom procedures and reduce impediments to "market access" among members. Additional emphasis in the telecommunications, tourism, and environmental sectors was also approved at the November 14-18, 1994, Ministerial Meeting at Seattle, Washington. On the other hand, the APEC ministers postponed action on what were seen as "modest" recommendations from the Eminent Persons Group regarding development of a Pacific free trade area. Ongoing apprehension in some Asian nations (most pointedly Malaysia) was also a background issue at the much-publicized summit of the APEC heads of state convened at the request of US President Bill Clinton immediately after the Ministerial Meeting. Nevertheless, the summit endorsed a broadly worded "economic vision" for its members and agreed to establish "nonbinding" codes for investment and the transfer of technology.
Hoping to impel integrationist sentiment in the region (which controls more than one-half of the world's economy and conducts over $1 trillion in intraregional trade annually), the APEC finance ministers met for the first time on March 18-19, 1994, at Honolulu, Hawaii. Among other things, plans were endorsed to double the capital of the Asian Development Bank, to promote cross-border investment, and to study ways of facilitating the financing of large infrastructure projects. The mood of the meeting was described as "upbeat" although caution was still expressed about tension between the United States and Japan over the Japanese trade surplus and disagreement between Washington and several Asian capitals, particularly Beijing, over US efforts to couple trade and human rights issues.
A potentially historic step was taken at the second APEC summit, held November 15, 1994, at Bogor, Indonesia, with the adoption of a "declaration of common resolve" to pursue "free and open trade and investment" over the next quarter-century. The loosely worded accord called upon the region's developed nations to dismantle their trade barriers by 2010, followed by similar action on the part of the developing nations by 2020. However, many observers cautioned that it would be extremely difficult to translate APEC "resolve" into action, one journalist suggesting there was a "never-never land quality about a pledge 25 years into the future." On the other hand, proponents argued that the Bogor Declaration represented a crucial "psychological breakthrough" on the way to creation of what would the world's largest free trade zone.