Trade Experts Gather to Discuss APEC’s Role and Relevance

Since its formation in 1989, the Asia-Pacific Economic Cooperation (APEC) has functioned as a platform for economic engagement and cooperation across the Pacific Rim. The forum, which expanded to include 21 member economies, emerged following the success of other regional trade blocs, aiming to draw upon the increasing level of interdependence of Asia-Pacific economies to make progress on multiple member-defined priorities. Traditionally trade-focused, APEC has expanded its cooperation to other areas such as human resources, marine conservation, and public health.

On October 6, 2023, Shorenstein APARC kicked off its fall 2023 seminar series, Exploring APEC’s Role in Facilitating Regional Cooperation, to accompany APEC’s upcoming convening in San Francisco on the week of November 12. Meetings between the member economies will cover trade, innovation and digitalization, energy, and other related issues, with a special emphasis on fostering sustainable economic growth and prosperity across the region.

The first event in the series, APEC’s Role in the Evolving Asia-Pacific Order, featured panelists Aida Safinaz Allias, the minister for economic affairs at the Embassy of Malaysia to the United States and a former APEC senior official for Malaysia; Ambassador Kurt Tong, a managing partner at The Asia Group, former U.S. Ambassador for APEC, and former U.S. consul general and chief of mission in Hong Kong and Macau; and moderator Michael Beeman, a visiting scholar at APARC and former assistant U.S. trade representative for Japan, Korea, and APEC at the Office of the U.S. Trade Representative.

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Beeman opened the session by acknowledging that “these are very complicated and often tense times in the Asia-Pacific region.” APEC has been charged with being a facilitator for economic cooperation in the region and “current challenges in the region have impacted and, in many ways, limited the ambition that APEC held at its inception,” said Beeman.

Beeman recognized that there are many who question the value of multilateral groupings like APEC, but said that “APEC is in its 34th year and the level of activity and work in APEC going on under the surface is as high as it's ever been…although it has faded from public attention, it is still valued by its members and there are hundreds of meetings going on every year in APEC, with thousands of participants joining.”

Throughout the session, participants examined the extent to which APEC still has value in the region, can still shape the region and its future, and whether APEC is “worse for wear.” The panelists investigated the degree to which the forum remains a flexible way of maintaining cohesion on economic cooperation and setting an agenda while promoting ongoing engagement “under the surface.” For Beeman, APEC still maintains its usefulness because of its flexibility, and “in many ways, APEC has bent but not broken, which is an important attribute in this day and time, and it may be more valuable today in the current environment.”

Speaking from her experience as a former APEC official, Aida Safinaz Allias outlined the relevance of APEC over the years and its distinct mechanisms that separate it from other multilateral groupings. Allias discussed the unique elements of APEC’s mission and its voluntary, non-binding, and consensus-building principles.

Allias referenced the three pillars of APEC's agenda: Trade and investment liberalization, business facilitation, and economic and technical cooperation. “APEC’s three pillars are very important for a country like Malaysia because it balances out things like liberalizing trade and investment, but it also builds [Malaysia’s] capacity to work out its own issues further…It's not just liberalizing the digital regime but upgrading skills and infrastructure in many parts of the Pacific.”

In 2020, during the height of the COVID pandemic, Malaysia hosted APEC and members agreed upon the tenets of a new 20-year plan, Putrajaya Vision 2040. Allias outlined the initiative to establish an open, dynamic, resilient, and peaceful Asia-Pacific community by 2040. The Vision is predicated upon the goals of driving trade and investment to ensure that the Asia-Pacific remains a dynamic and interconnected regional economy driven by innovation and digitalization to empower people and businesses and promote sustainable and inclusive growth to increase resilience to shocks, crises, and pandemics.

Ambassador Kurt Tong further elaborated on some of the prevailing challenges facing APEC member economies and forecasted that such challenges would dominate the upcoming forum discussions in San Francisco. First and foremost, according to Tong, is the issue of global supply chain resilience, which “is not really a liberalization issue but rather an information issue.” Tong questioned whether solutions to global supply chain interruptions might be found and made useful through coordination between economies at the upcoming APEC convenings.

Tong also listed green growth as a top priority for member nations and asked, “Can APEC capture the desire of every economy to have less of an environmental impact while still growing rapidly?” He indicated that the primary impediment to energy transformation is the question of “who's going to pay for it, and can APEC make a contribution?” Tong listed other pressing issues including the mobility of people between economies, educational coordination, and cooperation between economies in the digital age.

The participants agreed that APEC still has an important role to play in bridging the divide between different constituent groups in the Asia-Pacific and directing economic policy that may lead to genuine public-private cooperation across boundaries, not just within economies but across economies. For Ambassador Tong, “APEC is well organized to accomplish that kind of discussion… [which is] very important if you want to try and drive things forward.”