Beginning last week, world leaders from 21 countries in the Asia-Pacific region are gathering at the 2013 Asia-Pacific Economic Cooperation (APEC) Summit in Bali, Indonesia. To learn more about this forum and why it’s still relevant to global governance and Canada, we speak to CIGI Distinguished Fellow Len Edwards.
CIGI: Canadian Prime Minister Stephen Harper will be among those leaders at the 2013 APEC Summit. What relevance does this forum (sometimes criticized for having agendas that are too over-ambitious) still have for the Asia-Pacific region?
Len Edwards: APEC continues to have relevance as a community-building exercise, although some do say its work program has been criticized for its size and complexity (as any visit to the APEC website will confirm). It also tends to be a talk shop rather than a negotiating forum with hard outcomes and commitments for members (as in a trade agreement or treaty).
Still, it serves a purpose, especially for Asians, who find the gradualist approaches more to their liking. Remember that ASEAN (Association of Southeast Asian Nations) has been built on the same kind of informal framework. They see that it works for them.
APEC’s community-building benefits are two-fold.
First, however large, slow and cumbersome the progress, its agenda does deal with some of the real problems that stand in the way of economic growth in the region. The Committee on Trade and Investment has been the real “workhorse” from the beginning, covering many areas, including improving the movement of goods through customs (trade facilitation) and movement of business people (APEC lanes at most Asian airports). APEC’s Economic Committee discusses the dynamics of the regional economy and helps governments understand trends and design macroeconomic responses. Other subgroups handle everything from emergency preparedness, to food security, to anticorruption, to science and innovation. The list is certainly too long, but in the absence of other regional mechanisms for bringing governments together to deal with problems this huge, APEC does bring benefits.
Second, its intensive work program and meeting schedule develop regional networks and habits of discussion at many levels: from experts, to mid-level and senior government officials, to ministers, to leaders. The networks are both institutional and personal; they create long-lasting facilitative pathways. The discussions slowly break down resistance to change and forge common approaches outside the give and take of a negotiation. There is also strong interaction with the business community, through the APEC Business Advisory Council, which is made up of representatives from each member economy and has an annual dialogue session with leaders, and through the annual APEC Business Summit, which many leaders and ministers attend.
CIGI: What do you think the global economy (or other regions like Europe, for example) will learn or take away from the 2013 APEC Summit?
Edwards: The APEC Summit is not like the G20, where the economy is the top agenda item and key reason for leaders to meet. In APEC, it is the cooperative community-building agenda that tends to dominate. Of course, there is usually a discussion around economic trends in the region and I expect there will be some discussion in Bali of these trends and implications for the regional economy of the improvements evident in Europe, and the US recovery.
I expect that the rest of the world will look at what is said in Bali for signs that APEC leaders remain bullish about the long-term future of the Asia-Pacific economy as a driver of global growth. But there will be nothing too remarkable in that.
To the extent that leaders discuss the current softness in some emerging economies and the slowing down of Chinese growth as that economy matures, then outsiders may well pay more attention. There could also be signs of discontent from Indonesia and others evident in Bali that the end of quantitative easing in the US and the prospect of higher interest rates has led to worrisome capital flight from many emerging economies and weaknesses in some currencies, such as the Indonesian rupiah. The APEC Finance Ministers statement in July is probably a good guide to what leaders in Bali will be saying collectively at the end of the summit.
CIGI: Some have commented that Canada’s engagement in the Asia-Pacific region can improve dramatically through deeper signs of commitment from Ottawa — what steps should the Canadian government take if it seeks stronger relations with countries in the region?
Edwards: Obviously, the government has made it clear that economically it is now taking the Asia-Pacific world very seriously and taking major steps to position Canada for reaping the benefits of the growth expected in the region over the coming decades.
It will be important for Canada to complete some trade deals to support our business sector more effectively. Finishing the TPP (Trans-Pacific Partnership) negotiations (which is on leaders’ minds in Bali), and completing a trade agreement with Japan are two critical steps that Canada must take. It would also be good to complete the long-standing negotiations with Korea, although there have been signs for some time now that the Koreans have moved Canada down its priority list for a deal.
The government, and Canadians generally, must also do more than just talk trade with Asians. They must let their customers and partners in the Asia-Pacific region know that Canada sees itself as part of the region, that we have a stake in its future, and want to be part of the broader picture and the solutions to regional problems beyond the economic sphere.
Prime Minister Harper’s attendance at APEC (despite the fact that it is not a “hard outcomes” grouping) is important in this respect, since Asians value APEC for its approach to community building. Moreover, APEC is a trans-Pacific body; it ties the western hemisphere and Canada into the institutional network of Asia. The United States does not need APEC to be taken seriously or to play its role in the region. Canada needs this and other instruments to keep itself in the game.
Beyond the economic sphere, Canada has to be more present on the range of traditional and non-traditional security issues that continue to trouble the region. One can argue that security threats are, in fact, increasing through great power rivalry, growing military buildups, cyber security threats, and continuing terrorist and human smuggling operations. Natural disasters are also a huge concern. Engagement on regional security issues would be the most powerful message Canada can send about commitment; it will have direct benefits when Asians decide with whom to do business and set up long-term relationships.
This need not be a high-cost undertaking, although it will involve costs and re-allocations. For instance, it means Canada being present when security issues are discussed in important intergovernmental and Track 2 fora. It means bringing our expertise to bear where we have it. It means increasing our naval presence and visits, our training and exchange programs in military, policing, customs and other areas. It means joining in more exercises, including those that bring China and the United States closer together.