Problems with Current U.S. Policy.

Key Problems

* Washington's free trade model for the Asia-Pacific region has met with resistance.

* U.S. policy in APEC promotes an economic model that downplays human rights and sustainable development.

* U.S. policy has ignored the lower profile but essential elements of community building in the region.

Between 1989 and 1992, APEC had a relatively low profile within U.S. foreign economic policy. During that period, NAFTA and the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) were Washington's top free trade priorities. The 1993 Seattle APEC meeting, hosted by President Clinton, marked both a higher priority U.S. role in the Asia-Pacific region in general and a more coherently articulated free trade and investment agenda for APEC. Clinton's free trade vision received strong backing from Australia, Canada, and New Zealand, but other countries--notably Japan and Malaysia--were less than enthusiastic.

For the U.S. government and business community, APEC offers an opportunity to exercise economic leadership in an important world region. U.S. economic objectives, however, have been at variance with those of several Asian members and with the goals of NGOs that are trying to raise issues about human rights, labor, and democratization. Washington regards APEC as an instrument to assert its economic liberalization agenda, reduce its merchandise trade deficit with the region, and build a regional free trade bloc with strong U.S. participation, while serving to discourage Asian nations from organizing into an exclusive trading bloc.

The Asia-Pacific region has surpassed Western Europe to become America's largest regional trading partner--both as a supplier of U.S. imports and as a customer for its exports. Like NAFTA, APEC is regarded by the U.S. both as a regional bulwark against advances of the European Union and as a lever to strengthen Washington's economic liberalization agenda at the World Trade Organization (WTO). By developing initiatives supported by a significant group of APEC members, the U.S. uses APEC to build a "critical mass" for incorporating its global liberalization agenda into the WTO.

The primary resistance to expanding NAFTA into a hemispheric Free Trade Area of the Americas (FTAA) comes from opponents within the U.S. who either oppose the free trade agenda or oppose attaching labor and environmental agreements to new trade accords. In the Asia-Pacific region, however, opposition to the U.S. free trade juggernaut comes from both governments and citizens. Although the Clinton administration has succeeded in winning rhetorical commitments to free trade, its proposals for the establishment of a mandatory timetable for the implementation of a free trade area have been consistently rejected.

The Clinton administration's insistence on liberalization--especially in the face of a massive economic crisis--was widely reviled in the region as predatory. Rather than trying to address the social costs of the crisis, Washington focused on pursuing policy reforms that would enable U.S. corporations to pick at the choice carcasses of Asia's economic crisis. Washington harshly criticized the 1998 host, Malaysia's Prime Minister Mahathir, for his use of capital controls, and the U.S. derailed efforts by the Japanese to establish an Asian Monetary Fund to protect countries from currency. speculation.

Washington's narrow economic approach to APEC is problematic. The U.S. argues that economic liberalization, democracy, and security in the region are all mutually reinforcing (forming "three pillars" of foreign policy in Asia). But with the scramble for market share dominating the U.S. agenda, other issues get short shrift. U.S. policy demonstrates no abiding concern for the patterns or effects of either economic growth or financial crisis in the region.

Asian member nations prefer that APEC revert to its original focus on the eco-tech agenda of economic and technical cooperation to facilitate economic and human resource development. This agenda emphasizes consensus building on broad policy areas and the pursuit of a range of projects. The over 300 eco-tech projects have produced meager results, with the major output being the construction of databases of dubious quality. This is because wealthier countries are unwilling to devote significant resources to fund projects, and because the process of selecting projects is uncoordinated and unfocused. With a fairly small amount of money and some minimal coordination, Washington could expand some useful capacity building efforts, especially between U.S. state and local governments and their counterparts in the region. The broader benefit would be the commitment to community building in a region where multilateral institutions are weak.

With the exception of Vice President Al Gore's strong vocal support for the region's democratic reform movements at the 1998 APEC meeting, the U.S. has generally taken a passive posture with respect to citizen movements for democracy in the Asia-Pacific region. Thus Washington fails to maximize the opportunities, provided by its bilateral meetings with heads of state, to raise issues associated with the sustainable development and human rights agenda.

Beyond liberalization, the U.S. has no serious proposals to offer at APEC. While the U.S. concentrates on overcoming the objections to what regional leaders see as Washingtons agenda for a U.S.-dominated pattern of globalization, other problems raised by U.S. citizen groups and regionally based NGOs receive little attention. A central complaint is that APEC is opaque and undemocratic. As a result, citizen organizations have difficulty raising their concerns about the development process in the Asia-Pacific region.

Absent a coherent agenda for cooperation, APEC's future is uncertain. Attention by nongovernmental organizations (NGOs) to APEC has ebbed and flowed with APEC's own activity. The 2000 meeting will be the second year since 1993 that NGOs will not organize a parallel summit (the Indonesian government blocked a planned NGO forum in 1994). Next year's meeting in Shanghai will probably lack an NGO parallel meeting as well.

John Gershman ([e-mail]) is the Asia/Pacific editor for Foreign Policy in Focus.