[VIEWPOINT]Opportunity at the APEC summit

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[VIEWPOINT]Opportunity at the APEC summit

The recent Association of South East Asian Nations summit and the meeting of the three leaders of Northeast Asia ― Japan, China and South Korea ― usher in a promising era of regional economic integration and cooperation. Despite the setback at the World Trade Organization meeting in Cancun, Mexico, East Asian nations showed a renewed commitment to economic liberalization. Most significantly, ASEAN is moving beyond just talking about issues and now aims to create an ambitious single market by 2020 along the lines of the European Union. Pressed by China’s intense economic challenge, ASEAN seeks to create a counterweight by leveraging its 500 million people and $700 billion economy to compete with Chinese exports and attract foreign investment.
All the other regional powers have similar instincts in responding to China’s growing challenge. China has agreed to create a free-trade agreement with ASEAN by 2010, for example, and India is seeking one with ASEAN by 2011, while Japan has proposed one by 2012. It has already agreed to negotiate a free-trade agreement with South Korea. Caught in the middle of this competitive maneuvering, South Korea also called for a free-trade agreement with ASEAN and “building a comprehensive framework” with its Southeast Asian neighbors.
Unfortunately the three Northeast Asian nations at their separate summit at Bali could not agree to economic integration among themselves. South Korea advocated a three-way free-trade agreement, which could match the United States in total global trade, but the rivalry for regional leadership between Japan and China blocked progress on a pact. Instead, each will broaden and deepen economic relations bilaterally and with ASEAN without seeking for now to develop a regional economic community. The three did take steps in other areas such as security and cultural exchange cooperation. They also seek policy coordination toward North Korea.
What role will the United States play? It is the second largest trading partner and investor in the region. It recently concluded a free-trade agreement with Singapore, is well advanced on one with Australia and may announce negotiations on one with Thailand when U.S. President George W. Bush is in Bangkok later this month for the Asia-Pacific Economic Cooperation summit.
The 21 APEC members are committed to “free trade in the region” by 2010 and 2020. APEC could help overcome regional rivalries by creating an Asia-Pacific community that would benefit all countries much more than the proposed bilateral and smaller regional arrangements. A series of exclusive free-trade agreements would create complexities in trade rules and procedures that an APEC agreement would avoid. Hopefully leaders will seize the opportunity at the APEC summit.

by W. Robert Warne

The writer is a visiting professor at the Graduate School of International Studies, Korea University, and former president of the Korea Economic Institute of America in Washington.
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