Chapter 10: Asia-Pacific Economic Cooperation (APEC) §

(F) Day of the week: Friday Class: IS308 Created Time: June 11, 2021 2:37 PM Database: Class Notes Database Date: June 11, 2021 Days Till Date: Passed Last Edited Time: August 4, 2021 3:16 PM Tags: Asia-Pacific Type: Lecture

Definition §

• Is an economic forum in the Asia Pacific Region
  • 21 members of both developing and developed
• APEC is centered on liberal POV (states must cooperate to prosper)
• Included 3 China(s) as members (Hong Kong, Taiwan, Mainland China)
• What are the 3 pillars of APEC?

  • Trade and Investment Liberalization

    APEC members take actions to reduce tariff and non-tariff barriers to trade and investment that boosts job creation, incomes and growth. Collaboration is guided by APEC’s Regional Economic Integration agenda and includes the advancement of bilateral and regional trade agreements and the long-term goal of a Free Trade Area of the Asia-Pacific (FTAAP).

  • Business Facilitation

    APEC members pursue measures to reduce the time, cost and uncertainty of doing business in the region and open new economic opportunities including for small firms, women and youth. APEC’s Structural Reform agenda supports the development and harmonization of policies that improve market access and efficiency, and uphold public interest such as the safeguarding of health and safety.

  • Economic and Technical Cooperation (ECOTECH)

    ECOTECH builds the technical capacity of APEC’s diverse members to promote trade, investment and robust, secure and sustainable economic growth that widely benefits the region’s people. Priorities include strengthening anti-corruption, cross-border education and skills training, emergency preparedness, energy security, environmental protection, defense against pandemics and infrastructure development, among others.

Process §

• Hundreds of meetings (all government levels) & organizations to deal with economic issues
  • promote economic activity across borders
  • Annual leader meetings
• Equal voting powers (consensus based)
  • not binding → more relaxed discussions

Origin §

• Why did APEC start?
  • Japan had the economic strength protected by US
    • Japan had close relations with Asian tigers in the 80s
    • Trying to promote economic integration
    • initiate pacific economic cooperation council: to promote regional economic growth
  • 1989 created APEC
• Why was it started in 1989?
  1. Cold War ended around those years
     • Soviet was going to dissolve
     • Countries wanted regional alternative to WTO (too many members)?
  2. Japan wanted economic based org that’s faster than WTO, promote economy faster
  3. Instead of OECD or Europe based orgs
     • why not have their own Asian bloc
• Why was the US not involved?
  1. Focused on security > economic
     • Was busy fighting the Cold War
       • spread of communism in the Vietnam War
  2. US’s economy already was really good, not interested in boosting economy with small countries
  3. US was concerned about the purpose of APEC not being what it says it is

Strengths §

• Platform to discuss and cooperate economic, social, and cultural issues: no other place to do that
  • Counter-terrorism
  • Anti-piracy
• Account for 50% world population & world trade, 30% Global GDP

Weaknesses §

• Diversity in culture, ideology, values makes decision making difficult
• Difference between the rich and poor countries have different interests and approach for different issues
  • Rich Western vs Poor Asia
• Small staff size (40)
  • APEC hiring is recruited by member state, loyal to their nation instead of APEC
• Small funding
• Absence of leadership: effectiveness reliant on willingness and enthusiasm of member states

Malaysian foreign ministry sources made it clear that the EAEC concept was retaliatory in nature and not merely a consultative forum stating, “The Prime Minister has called it a spade for a spade.” They also noted that the proliferation of trade blocs meant that “smaller developing countries like Malaysia are extremely vulnerable.”14 This rationale was intolerable to the United States inasmuch as the EAEC was expected to become a regional trading bloc, institutionally excluding the United States from East Asia.