Mari Pangestu and Sung-Hoon Park
APEC was buffeted by the outbreak of the Asian financial crisis in 1998. Under the immediate influence of the financial crisis, APEC members were unable to launch the 'early voluntary sectoral liberalisation' (EVSL) initiative, for which they had negotiated throughout that year. This was counterproductive (because continued trade and investment liberalisation was necessary to underpin regional economic reform and recovery), and also dealt a blow to the global momentum then building towards new World Trade Organization (WTO) negotiations. The failure of the EVSL diminished APEC's credibility in constructing a relationship with the rest of the world with open regionalism as a conduit to the WTO. The Asian crisis also triggered rethinking in many Asian developing APEC members about their international strategies to promote development.
In achieving its goals, APEC has to find an appropriate balance between its two mutually reinforcing cooperation pillars: the 'Trade and Investment Liberalisation Framework' (TILF) and 'Economic and Technical Cooperation' (Ecotech).
Developing and/or transforming countries assume the rotating presidency of APEC until 2005-China in 2001, Mexico in 2002, Thailand in 2003 and Chile in 2004. Accordingly, there is some expectation that Ecotech activities may receive a stronger focus than previously. There is also a risk that excessive focus on Ecotech alone could diminish the momentum within APEC for trade and investment liberalisation, and undermine APEC's ability to make a constructive contribution to success of the new WTO round recently launched at Doha.
It is against this general background that we look at the implications of the new economy for APEC's future agenda. We examine the regional opportunities and challenges presented by the new economy, we discuss the importance of liberalisation and deregulation in the information, communication and technology (ICT) sector and we set out some priorities for regional capacity building.