APEC: Amazing, Yes-Awesome, No. (Taurus)

By Fischer, Tim | Business Asia, August 2002 | Go to article overview
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APEC: Amazing, Yes-Awesome, No. (Taurus)

Fischer, Tim, Business Asia

NOW well into its second decade, it could be said that APEC rolls along, without breaking any records, and it is the only major international economic grouping which has involved both China and Chinese Taipei from inception.

The first decade was one of too much expansion and, some would say, too much pushing the envelope on trade breakthroughs. However, APEC performs well and without the otherwise mandatory huge secretariat to ensure gravitas.

Point of strength

To deal with this last point first, it is probably more of a strength than a weakness that there is still no huge APEC headquarters nestling beside a lake in one of the key Member Nations, eg the equivalent of Lake Geneva in Canada, Chile or China.

The bulk of the work tends to be carried out by the host nation for each year--2001 this was China and 2002 it is now Mexico's turn.

APEC does have a small secretariat located in the efficient hub of Singapore, and this secretariat works closely with the host nation each year, which in turn establishes a local unit to handle the Leaders conference and other meetings.

Whilst being host nation can be a heavy burden on small nations, such as when it was the turn of Brunei, there can always be some sharing of the task--and so Australia and Darwin stepped forward to host the Trade Minister's annual APEC meeting in the Brunei year of 2000.

Jury still out

Examining APEC's performance and the impact of its key Member Nations, it has to be said that the jury is still out on the economic front. The initial key breakthroughs related particularly to the Bogor Declaration which saw in the early '90s APEC Member Nations accept full trade liberalisation for developed countries by 2010 and for developing countries 2020.

No APEC Member Nation has formally defined in detail the next to zero tariff position which should apply after 2010 and/or 2020, but the general disposition seems to favour anything between zero and an absolute maximum of five per cent--significantly not zero only.

Of course, if all APEC Member Nations were to reach this benchmark of tariffs zero to five per cent by 2010 or 2020, then APEC has done a great service to its Member Nations and to the world in showing the way forward and creating win-win situations in the process.

As the clock ticks down, not only has the objectives not been defined in absolute detail but there has been tariff drift upward in some of the Member Countries. For instance, Malaysia has further increased its automotive tariffs to over 300 per cent in certain categories of motor vehicles which means that, when Malaysia gets to the Bogor deadline, unless a gradual transition is implemented, theoretically there will be the biggest right-angle bend in the history of tariffs worldwide as Malaysia drops from 350 per cent to 4.

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APEC: Amazing, Yes-Awesome, No. (Taurus)


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