Transcript APEC

Alphabet Soup
Jesse Bohnet
Mike Smitka
May 19, 2000 - Economics 286
The International Order
• Trade & intl finance issues
– Establish and encourage adherents to
behavioral norms
– Crisis intervention
• Security
– Multilateral arrangements to enhance security
– Crisis invention
• Misc: world "public goods" (environment)
Europe
• EU and predecessor organizations
– Built upon natural trade ties among European
economies
– Large role of (united) Germany
• NATO: in inverse order of importance?
– Kept Russians out
– Kept Americans in
– Kept Germans down
The Americas
• Informal dominance by US
• NAFTA including possible expansion
• Monroe doctrine for security
• Clear hegemonic status meant formal
organizations were not as central
• In a crisis, clear US interest in intervention
Asia - trade
• No clear economic power
– Neither Japan nor the US nor (now) China dominate
• Tremendous diversity of interests
• Initial and varied ex-colonial focus in 1950s
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Indonesia --- the Netherlands
Vietnam - Laos - Cambodia --- France
HK, Malaysia, Singapore --- Britain
Philippines, Korea, Japan --- US
China, Russia --- autarky
Asia - security
• Security: issues
– No unifying external threat (Russia . . . India?)
– Internal rivalries and flashpoints
– US ambivalence to playing a role: unrealible?
• Old organizations failed
– SEATO ended with US exit from Vietnam
– ANZUS ended with New Zealand pacifism
– US presence in Philippines ended with Marcos
Global economic framework
• The GATT and WTO
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MFN as foundation
Reciprocity as process
More awkward as membership expanded
Enforcement? - WTO provides adjudication . . .
• UN
– Global goals, but limited enforcement tools
– Difficulty in acting
• IMF - few resources
The EU
• European Union
– Political goals
– Economic means
• Lowering of internal trade and capital /
labor restrictions
• In turn, setting of common external trade
rules
• Does the ROW benefit?
Trade diversion & creation
• EU enhances trade within Europe
– Specialization increases, and incomes with it
– Higher incomes create expanded trade opportunities
with the ROW
• EU diverts trade to within Europe
– Fewer barriers leads to shift from trade partners outside
the EU to trade within the EU
– Higher external barriers accentuate - would they choose
the politically easy route of imposing the highest
existing member barrier to the whole EU?
EU and APEC
• Fears of trade diversion from a "Fortress
Europe"
• APEC founded in part as a not-so-subtle
counter to any untoward European behavior
• In the end, those fears were not realized
• So what then is APEC?
– Is the Pacific Basin a natural unit? - data and
details follow!
APEC (Asia-Pacific Economic Cooperation)
APEC (Asia-Pacific Economic Cooperation)
Basic Facts
• Established in 1989.
• As of today, there are 21 countries in the
organization.
• Combined GDP of $16 trillion US dollars.
• Accounts for 42% of global trade.
• Meet annually to discuss business.
GDP Growth 1989-1998
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
China
Hong Kong
USA
356 370 399 452 599 547 711 834 918 902
69
72
75
79 116 131 139 154 172 163.8
5478 5522 5458 5637 6553 6936 7265 7636 8080 7783
APEC’s share of global trade
Annual Meetings
• First five conferences produced a lot of talk but no
action
– Main issues revolved around membership
– Three China compromise ==> China, Taiwan and HK!
• 1994-Bogor, Indonesia
– set definite goals for the future
• 1995-Osaka, Japan
– Osaka Action Agenda
– TILF Account opened
Annual Meetings (II)
• 1996-Manila, Philippines
– MAPA
• 1997-Vancouver, Canada
– Customs Modernization
– WTO participation
Annual Meetings (III)
• 1998-Kuala Lumpur, Malaysia
– Cooperative growth strategy to end crisis
– Programs to facilitate skills upgrading/
improvement
• 1999-Auckland, New Zealand
– APEC Food System
– Banking standards developed
– Reaffirmed Bogor goals, prioritized trade
APEC Fora
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Committee on Trade and Investment
Economic Committee
ECOTECH Sub-committee
Budget and Management Committee
Policy Level Group on Small and Medium
Enterprises
• Fisheries Working Group
• Human Resources Development Working Group
APEC Fora (cont..)
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Industrial Science and Technology Working Group
Marine Resource Conservation Working Group
Telecommunications Working Group
Tourism Working Group
Trade Promotion Working Group
Transportation Working Group
Agricultural Technical Cooperation Experts Group
APEC and trade
• Hope that smaller membership makes
achieving liberalization easier
• Focus on trade facilitation and on "public
goods" issues separate from tariffs and
NTBs (non-tariff barriers)
• Results?
– Not much
– But low expectations
APEC and security
• Never a formal topic at APEC
• However, always a behind-the-scenes issue
• ARF as developing security forum
– Southeast Asia focus but includes as observers:
• China - distrusted and weak
• Japan - pacifist and narrow interests as "follower"
within US-Japan security treaty
• US - disinterested but strong
APEC: Links &c.
• APEC Secretariat in Singapore
– US site for APEC (Dept of State)
– Columbia University site
• PECC (Pacific Economic Cooperation
Council)
• PBEC (Pacific Basin Economic Council)
• ASEAN and ASEAN Regional Forum
Glossary...
• ASEAN - Association of Southeast Asian
Nations (a trade / political organization)
• ARF - ASEAN Regional Forum (in'tl
security forum, including the US, China and
Japan as observers)
• ANZUS - Australia - New Zealand - US, a
defunct security pact
• CBM - confidence building measure
Glossary, cont
• SEATO - Southeast Asia Treaty
Organization, a defunct counterpart to
NATO (North Atlantic Treaty Organization)
• ESCC, EEC - European Coal & Steel
Community, European Economic
Community: predecessors to the EU
• EU - European Union
Glossary, cont.
• FTA - US - Canada Free Trade Agreement
• NAFTA - North American Free Trade
Agreement, successor to the FTA to include
Mexico
• GATT - General Agreement on Trade and
Tariffs. Included the Kennedy Round, the
Tokyo Round and a final Uruguay Round
• WTO - World Trade Organization,
successor to the GATT