Wednesday 13 Oct 2021 | 19:54 | SYDNEY
Wednesday 13 Oct 2021 | 19:54 | SYDNEY

AP community: APEC demotion


Graeme Dobell

11 November 2009 13:07

After 20 years on top, APEC no longer reigns supreme in Australia's foreign policy firmament. In the week of the APEC summit in Singapore — and only days after the 20th birthday of APEC's creation in  Canberra — APEC's demotion must be seen as a significant structural shift, hastened by Kevin Rudd.

From the moment of its birth, APEC was Australia's greatest achievement for community building in the Asia Pacific and quickly became — in Canberra's description — the pre-eminent regional organisation. From the first APEC leader's summit in Seattle in 1993, APEC was the key instrument for personal diplomacy by Australia's Prime Ministers — that was one point of agreement between Keating and Howard. 

But as an expression of Australian international economic interests, APEC now concedes top spot to the G20. And as a venue for leadership summitry, APEC must share equal billing with the G20 and the East Asia Summit.

Consider the different treatments of APEC and the G20 in Stephen Smith's recent speech on the Asia Pacific century. APEC is still pre-eminent but only as the 'regional forum for Australia's economic engagement with Asia and the Pacific.' For the Foreign Minister, the G20 shapes as an exciting new toy with a more avowedly political reach:

Australia has high ambitions for the G20 and the region's role in it. It should become the political driver of stronger global cooperation and governance, responding to the full range of global challenges that will confront us in the Asia-Pacific century.

The Rudd view of APEC has probably never been as enthusiastic as that of Labor predecessors such as Hawke or Keating. To get a fix on the Prime Minister's view of APEC, come back to 2001 when Rudd was still a not-so-humble Labor backbencher. Rudd was using his position as chair of the Parliamentary Party Committee on National Security and Trade to push for a position on the front bench — specifically, the Foreign Affairs portfolio (to the mounting chagrin of the then holder of the shadow Foreign Minister job, Laurie Brereton).

Then, as now, Rudd was prone to essaying, and he penned a chapter entitled 'Inserting a new dialectic: Governance', for a book on globalisation. You can find the full essay here. This old essay reveals both consistencies and shifts in the Rudd position. For a start, in 2001 Rudd was able to talk about neo-liberalism without exactly spitting — although he is certainly critical.

What also comes through is a distinct scepticism about APEC that you would not have heard from Howard, much less Keating. Rudd judged — correctly — that APEC had been slow to respond to the 1997-98 Asian financial crisis and had been 'irrelevant' to whatever recovery the region had achieved. Rudd's view was that APEC had shown little ability 'to proceed beyond its own narrow neo-liberal trade agenda':

In summary, APEC was founded on neo-liberal principles, and has so far seemed institutionally incapable of substantially addressing pressing policy challenges to its regional economic environment. As a ginger group on trade liberalisation, it has performed a useful function, but given that most substantial liberalisation measures are likely to be negotiated in the Millennium Round of the WTO, its main trade-related functions will consist of 'maintaining the faith' on the Bogor commitments and pressing the raft of practical trade facilitation programs currently underway. Still, APEC must formally address the critical, unresolved challenges from the 1997 crisis concerning the future regulatory regime for world currency markets, and the region's environmental issues are pressing. If and when APEC takes up these and other policy challenges in a substantive way, regionalism in the Asia-Pacific may have something new, positive and even dialectical to contribute to the globalisation debate.

We now know that Rudd's answer to world currency markets is not APEC, but the G20. As for maintaining the faith on Bogor, next year will be an embarrassing reminder that politicians should be careful about setting target dates, no matter how far into the future. The 1994 Bogor Declaration committed APEC to achieving free and open trade and investment in the Asia Pacific — the developed economies by 2010, the developing economies no later than 2020. There's a deadline they'll have to tip-toe around during the Singapore summit.

One of APEC’s wise owls, Andrew Elek, writes that there is no need to be overly concerned that APEC's Bogor goals will not be met in full, even by 2020. And he offers this excellent summary of what APEC can and can't do:

APEC should play to its strengths; building consensus on policies, including trade and investment policies, which can help each Asia Pacific economy to achieve its potential for sustainable growth. This means accepting the limitations of a voluntary process of cooperation. APEC’s successes have come in areas where governments have perceived the benefit of cooperating, voluntarily, to achieve agreed practical objectives. Problems, together with perceptions of failure, have arisen when participants in a voluntary process sought to engage in negotiations.

Image courtesy of APEC Singapore 2009.