"Games of Coordination: APEC moves forward, but slowly"

By I. M. Noitall

Excerpted from the Far East Asia Economic Review....

At the 2000APEC Summit just concluded in Bangkok, Thailand representatives from ten countries grappled with the complexities of intellectual property rights and sustainable development. Foreign Ministers also had to combat an attack on the organization itself from public protestors who disrupted the meeting.

Here are some of the highlights from the Summit and reaction from editorialists and domestic politicians from the countries involved:

The interference with traffic in the streets of Bangkok (when is traffic in Bangkok ever not bottlenecked) and the disruption of the Foreign Ministers meeting from a set of groups calling themselves, the Coalition to Challenge APEC Domination was handled with great dispatch by the host country of Thailand and the other Foreign Ministers. In a decisive show of support for APEC, Foreign Ministers all took to the podium in a hastily called press conference and provided a unified front. Unlike the slow and divided response of WTO representatives at the 1999 Seattle Summit, APEC leaders responded directly to the protestors’ attacks on free trade and presented what the Far East Asia Economic Review called "a stinging defense of APEC’s principles of consensus, open discussions, and progressive agreements." The New York Times took pleasure in noting that America’s commitment to leading on free trade could not have been better exemplified than by the quick reaction of Secretary of State Signer, "who bounded on to the stage while others waited for help to arrive and showed the unruly intruder the door."

The Foreign Ministers were able to re-group and pass a Malaysian sponsored proposal for an APEC Development Fund (ADF). While the agreement was simply to place the discussion of an ADF as the centerpiece of next year’s APEC Summit agenda, the agreement to talk was seen as important. In Seoul, South Korean national legislators received the proposal and their national delegation’s support well, noting that alternatives to the IMF should be explored. While an idea unlikely to have found much interest in Washington and Tokyo only a few years ago, the external shock of the regional economic crisis made a regional response mechanism more appealing to the leading member economies. Final agreement in terms of contributions, in particular, as well as lending rules will take considerable effort, however. The American Congress will be wary of lending rules that do not correspond to the clout the US now has in the IMF. The Japanese Parliament is also cost conscious, but recognizes Japan’s increasing dependence on a healthy economic region. Tokyo’s Asahi Shimbun editorial noted that Foreign Minister Leah Nicholls and her well-prepared delegation were correct to allow further exploration of this idea. Most analysts gave credit to FM Fribourg and the Malaysian delegation for getting the proposal as the first agenda item. With all Summiteers looking to begin their strive toward consensus on the right foot, the proposal probably faired better than it would have if brought up later in the meeting.

The Utusan Malaysia indicated some surprise, however, with Foreign Minister Fribourg’s cooperation with the United States on the issue of enforcing intellectual property rights. Eyebrows were raised in Kuala Lumpur with agreement to create a council to develop "standards for enforcement of violations of IPR." Some in the business community were surprised that much more was not made of the high cost of many US goods and the patent advantage of US companies. (More on that below)

A Canadian proposal passed out of the IST committee that was also greeted by skepticism in editorials in China, Malaysia, Indonesia, and Thailand set acceptance of a base minimum wage as a worker protection principle. The Bangkok’s Thairath Daily was particularly concerned with the result. While praising the overall efforts of Foreign Minister Trevino and deputy Calvin Armour during the Summit, the paper raised concern about the "questionable slippery slope that our leaders may have stepped onto. Recognizing the principle of a base wage opens the door for advanced economies like Canada to place pressure on our development – a pressure they never had to deal with during their economic rise! Canadian concern for workers is well-timed and may lock-in advantages for progressive established economies." The Toronto Globe and Mail not surprisingly saw the proposal as "Canada’s most significant contribution to the Summit."

The Beijing Peoples’ Daily commended the efforts of ministers Bolten, Haberman, and Kaut in particular for their success in the formation of a committee that will examine competing cultural norms and business styles. The newspaper commented that, "getting western countries to recognize that there are differences between East and West, rather than the Washington view that theirs holds some universal insight is a step in the correct direction." American Senator Barbara Boxer (D-Calif) an advocate of tough human rights policy toward China, withheld judgment until she read the full text of the committee’s charge. She noted some concern, however, "if China is allowed to hide behind the veil of cultural diversity in its continuing violations of rights basic to all human beings, whether they live in Asia, Africa, or Europe."

El Financiero trumpeted the Mexican delegation’s ability to pass what it called "two important cautions to globalist exploitation of weaker economies." The two proposals that found consensus highlighted national sovereign rights in the emerging area of biotechnology and the need for MNC investment in the local educational systems in which they base their operations.

The New Straits Times Press noted that the Kuala Lumpur business community was more pleased with Malaysian Minister Sitawi’s ability to find consensus in the linkage between environmental protection and local domestic capabilities. The acceptance of a relative weighting of responsibility for support of sustainable development efforts was applauded in the Indonesian capital as well, although environmental groups in Washington and Ottawa expressed some disappointment with the American and Canadian delegations. The Sierra Club of North America released a statement that it is "our hope that such a system turns into one of open support by the advanced countries and not an excuse for inaction." American Senator Jesse Helm’s office was also concerned, but for the opposite reason. A press release stated "The Senator hopes our delegation has not agreed to free resource and technology transfers that harken us back to the agenda of the NIEO of the 1970s and other such socialist-type experiments. The hard work and risk of American entrepreneurs should not be sacrificed on the altar of environmentalist-driven moralism and egalitarianism."

Finally, Australian environmental groups were pleased by their delegation’s co-sponsorship and support rendered the American proposed wildfire emergency containment unit. Undersecretary of Treasury Keith Potter was singled out for a "well conceived and structured proposal that speaks to the consensus nature of APEC as an organization."

The main area of disagreement surprisingly surfaced on the issue of piracy. In fact, there were surprises on a number of fronts. In a general sense as the New York Times noted

"in the end it was the United States that stood in the way of an effort to address piracy; an effort promulgated by Thailand and the PRC. At first glance this seems an odd role reversal. However, below the surface there was a complex dynamic going on. In part, Chinese and Thai wording suggested a linkage between the issue of piracy and pricing; a linkage the Americans would be right to want to avoid. Despite her protestation of innocent fact-finding, Chinese Trade Rep Haberman (who alluded to an American movie unlikely to have suffered much in the way of copyright violation in China, but one that continues inexplicably to amuse Americans years after its release) could not dispel the sense that there must have been something behind Chinese moves in an area that Washington has been complaining about for some time. It revealed how trust is a scarce commodity even in a consensus-oriented regime like APEC. What was equally not clear, however, is whether the ever-tough American Trade Representative Jim Masterson actually made his firm stand on a complete recognition of the price connection or whether America's obstinate position was grounded in diplomatic niceties (or the lack thereof). Interestingly, Mexican Representative Brafford recognized the apparent stumbling block over the pricing-piracy link, but mediation during an increasingly acrimonious Foreign Minister session became elusive. A tradeoff of no votes between PRC-Thai and the United States brought to a close probably without an agreement the most important issue on the agenda."

The Washington Post and Toronto Globe and Mail both called the lack of movement on piracy "a disappointing missed opportunity." The Bangkok Thairath Daily noted that the Thai government seemed "stuck between a rock and a hardplace" in their desire to appease both Washington and Beijing and did not make a strong enough attempt to play mediator. The New Straits Times Press, however, heaped praise on Minister Apgar, who "distinguished herself throughout the Summit despite the heavy ‘weights’ of China and America."

One proposal involving the possibility of privatization of core infrastructure and industries surprisingly moved out of committee, but was unable to find support among the foreign ministers. Had it done so, a number of powerful domestic constituencies would have demanded explanation and possibly much more (some ministerial jobs, for example) in Thailand, China, Indonesia, and South Korea for starters. The Jakarta Post was pleased that the Indonesian delegation was not involved in contributing to a consensus on such a problematic idea.

In the final assessment, this reporter was surprised by one consistent self-assessment offered by almost 20 ministers interviewed for this piece. All mentioned how the compression of time made reaching consensus on key issues difficult. What was surprising is that not one of those raising the issue of time constraint pointed to the possibility of using the preceding two weeks of pre-Summit diplomacy more effectively to establish points of agreement prior to face-to-face talks. While country positions are the skeleton of diplomacy, personal interaction is its heart. To a large extent, the Summit had the flavor of a pre-diplomatic session. Perhaps continuing dialogue will lead to continuing success in the future. All of the delegations contributed to moving APEC slowly forward in its evolution from general norm-based regime to a promising international organization and found favor in their domestic political circles.

March 17^th, 2000