"Pan-Asian regionalism remains a long-term aspiration rather than a short-term prospect, but that having been said, that was true of Europe fifty years ago." - Michael Armacost, Shorenstein Distinguished Fellow

On November 2 Stanford University's Shorenstein Asia-Pacific Research Center, in association with University of California at Berkeley's Asia-Pacific Economic Cooperation Study Center, convened regional and economic experts to discuss the role of the Asia-Pacific Economic Cooperation (APEC) group and its relationship to the future of regionalism and regional integration in East Asia.

The meeting was timely, as APEC's annual week of high-level meetings begins on November 12th in Hanoi, Vietnam. It will culminate in a summit of heads of state (and a representative from Taiwan) on November 18-19 -- a key opportunity for President Bush to talk with regional leaders about a range of issues, including North Korea. In examining APEC's agenda and its potential institutional challengers, scholars focused on how the US might get more out of the forum and how the US could alter its approach to Asian regionalism to ensure continued relevance and influence in the region.

According to Dr. Donald Emmerson, director of the Southeast Asia Forum and senior fellow at Stanford's Freeman Spogli Institute for International Studies (FSI), "Asian regionalism is at a crossroads, and it may be at a crossroads for sometime." Recent events have demonstrated that countries in the region face a crucial choice: Will they move in the direction of an East Asian identity that actively excludes the US, or more toward trans-Pacific networks such as APEC that include the US? Or both?

As Asian countries consider the merits of APEC and American inclusion, US policy on Asian regionalism has been "curiously passive," especially when juxtaposed with the positive role the US played in supporting development of the European Union, according to Ambassador Michael Armacost, who was US ambassador to Japan and the Philippines and held senior policy positions on the staff of the National Security Council and in the Departments of State and Defense.

Dr. Vinod Aggarwal, a professor of political science and director of the Berkeley Asia Pacific Economic Cooperation Study Center, pointed to the example of the European Union (of which the US is not a member), urging that the US seek compatibility among regional and trans-Pacific institutions. Armacost agreed and maintained that the US should not fear exclusion from regional forums, such as the East Asia Summit (EAS), an outgrowth of the annual dialogue between the Association of Southeast Asian Nations (ASEAN) and other powers, which held its first meeting in Malaysia last year.

North Korea has said it will rejoin the six-party talks, but a meeting will not take place until after the APEC meeting. Here is an illustration of the utility of APEC that has nothing to do with economics. There could be an informal meeting of the five parties (without North Korea) in Hanoi. And that could be quite helpful in terms of coordinating strategy, especially with China. - Donald Emmerson, director, Southeast Asia Forum, Shorenstein APARC

Armacost underlined that American participation needs to correspond with American interests. In this sense, the US should put more effort into the Asian organizations of which it is already a member, including APEC. Armacost also suggested looking to Northeast Asia --"where the interests of the great powers intersect most directly" and there is no ASEAN counterpart -- according special attention to the six-party talks convened to denuclearize North Korea. He told the group that "fortuitously in the six-power talks, one has a negotiation which could be in embryonic form a regional security institution, in which American participation is not an issue -- it's self-evident. The US should put effort into the six-power talks succeeding, not only because of the substance of those talks, but because if they do succeed, then that format can provide a basis for a sub-regional institution of great importance to us, one that will give us a continuing role in the larger institutions that may emerge in Asia."

Emmerson said that there are essentially two views in Washington on US participation in Asian regional institutions: "one is to say that if these meetings are merely 'talk shops,' then our absence doesn't matter, and the other is to say that we are being, as the phrase goes, 'absent at the creation' of regional architecture, which we will regret not having been able to influence from the beginning, the longer we stay out." He urged greater US involvement in regional organizations and more creative approaches to tackling obstacles to involvement, such as finding a way to compromise on accession to the ASEAN Treaty of Amity and Cooperation, a key criterion for membership in the EAS. Attending that summit, in Emmerson's view, "would send a clear signal to East Asians that the US does want to be involved on the ground floor in the creation of an emerging regional architecture in Asia for the 21st century."

As the panelists encouraged the US to devote greater effort to the project of Asian regionalism, they also acknowledged that President Bush and other US delegates to this year's APEC meetings would not be in a position to embark on any bold initiatives, including the talked-of Free Trade Area of the Asia-Pacific, or FTAAP. According to Aggarwal, "in the current climate, the FTAAP is a political non-starter." Preoccupied by US midterm elections and the Iraq issue, "the administration is unlikely to put a lot of political capital into pushing for something like an FTAAP," not least because of the upcoming expiration of President Bush's Trade Promotion Authority. Aggarwal said, "I just can not imagine that any congressmen or senators will advocate free trade with countries with which we have our largest trade deficits. These massive trade deficits make the issue a political hot potato and no one will touch it." Instead, he recommended a less direct approach for trade liberalization. (A spokesman for the US Trade Representative's office has said that while they are still in the process of preparing their APEC agenda, they would consider discussing the FTAAP with their regional trading partners.)

But if you're ever going to pump new life into [APEC] you've got to find some practical projects around which people can rally. I would have thought the one economic issue that seems to be very timely, although some of the timeliness is being lost as prices sink, is energy. Virtually everybody in Asia is an importer of energy, and there are a lot of consumer interests that would benefit from the kind of collaboration that you could organize at a meeting like this. I would try to get subjects like that on the agenda, maybe more than trade liberalization. - Michael Armacost, Shorenstein Distinguished Fellow

Founded in 1989, APEC has 21 member economies on both sides of the Pacific. As a trans-Pacific, network, APEC connects the US, Chile, Mexico, and Canada on one side of the Pacific with a diverse group of Asian economies including China, Japan, South Korea, Taiwan, Indonesia, Vietnam, Malaysia, Australia, and New Zealand. Aggarwal described the body as more of a "discussion forum" than an organization, as it explicitly rejects the deeply institutionalized approach taken by the European Union in Brussels - something he said should be reconsidered if it is to become more effective.

Panelists raised the paradox that APEC's agenda seems overly ambitious, yet at the same time the forum is under-utilized, in terms of addressing some pressing issues in the region, including as energy, avian flu, and maritime security.

Aggarwal acknowledged that APEC has been host to a wide range of activities, including security, environment, women's rights, finance, and technology policy. "What's striking is that these activities have been discussed in the European Union, for example, but really only in any significant way after 25 years of economic integration." In the mid-1990s, APEC set deadlines for trade liberalization -- 2010 for developed countries and 2020 for other countries. These goals will be hard to meet.

Security in the Asia-Pacific means lots of things. If we always focus on the latest American security issue, then that becomes the driving factor in Asians saying because the Americans have their own agenda, we want to have our own organization. So, yes, I think we should revitalize some of [APEC's] trade goals, we should try to work toward that, but we should be willing to address broader issues, other than only counterterrorism or only North Korea. - Vinod Aggarwal, director of the Berkeley Asia Pacific Economic Cooperation Study Center (BASC) at UC - Berkeley

Armacost compared APEC to the European Union, asserting that the EU succeeded in large part because it "started small, built gradually and focused on depth rather than breadth at outset." In addition, the European body, considered the gold standard of regional integration, concentrated on very practical projects that yielded tangible benefits and generated political support for further endeavors.

In this vein, Armacost recommended two practical purposes for the group. "Virtually everybody in Asia is an importer of energy, and there are a lot of consumer interests that would benefit from the kind of collaboration that you could organize at a meeting like this." Also, returning to one of the organization's fundamental purposes, Armacost contended that in large part, "APEC is only useful insofar as the US uses it as a place to rally support for making one last ditch effort in trying to stimulate the Doha Round."

"I don't think that these bilateral trade agreements are particularly good for American business, or in general for trade negotiations at the Doha Round." - Vinod Aggarwal, director of the Berkeley Asia Pacific Economic Cooperation Study Center (BASC) at UC - Berkeley

"If APEC members really wanted to get the Doha Round back on track, they should agree to a moratorium on preferential trade agreements for a period of one year and challenge the Europeans and other non-APEC members to match them in this moratorium on preferential trade agreements," urged Aggarwal.

Overall, the group agreed that despite inherent problems in APEC, overall participation in this trans-Pacific institution should be considered important to the United States. Armacost made the practical point that "APEC happily provides the major occasion in which the President goes out to the region. Basically, it's an opportunity to cultivate your allies, find out what your adversaries in the region may be up to, and to have a point in your schedule where you've got that agenda of Asian concerns that you are forced to wrestle with. For that reason alone it's worth keeping APEC alive."

All the panelists acknowledged Asian countries' criticisms that the US had too much control over APEC's agenda, and that Washington utilizes the forum to discuss its "issue of the day." Emmerson called on the US to remember that "from the standpoint of a number of developing Asian economies, the American emphasis on trade liberalization has been somewhat distorting. These are low-income countries; they're interested in economic cooperation that can somehow help them raise their populations above poverty levels. There's a whole agenda there that we really haven't discussed, and in a way it has been slighted in APEC by this overriding emphasis on trade liberalization. If trade liberalization turns out to be unrealistic at least in the short run, development goals are an alternative agenda that has some utility, and is worth exploring."

Similarly, Armacost stated that APEC would be a "more valuable institution to us, if we stopped talking for a while and listened a bit." Reflecting on US policy more broadly, he said he "personally regrets that in recent years the institution building instinct, or reflex, in the US has been directed at remaking other people's institutions internally. The international institution focus has been on relieving ourselves of the burdens of institutions which cramp our style or impose limits on diplomatic maneuverability."

I do believe we're not paying enough attention to a region whose importance to us will be greater than any other region ten to fifteen years from now. We should devote more attentiveness to Asia. - Michael Armacost, Shorenstein Distinguished Fellow, Shorenstein APARC

Shorenstein APARC's associate director for research Daniel Sneider moderated the panel. This seminar was an outgrowth of the center's work on the role of regionalism in East Asia. The research center will publish a book on this subject next spring, in conjunction with the Brookings Institution.

About the Panelists:

Vinod Aggarwal is professor in the Department of Political Science, affiliated professor of Business and Public Policy in the Haas School of Business, and director of the Berkeley Asia Pacific Economic Cooperation Study Center (BASC) at the University of California at Berkeley.

Michael H. Armacost has been the Shorenstein Distinguished Fellow since 2002. From 1995 to 2002, Armacost served as president of the Brookings Institution. Previously, during his twenty-four year government career, Armacost served, among other positions, as undersecretary of state for political affairs and as ambassador to Japan and the Philippines.

Donald K. Emmerson is director of the Southeast Asia Forum at Shorenstein APARC and a senior fellow at FSI. He also teaches courses on Southeast Asia in International Relations and International Policy Studies.

Daniel C. Sneider is the associate director for research at Shorenstein APARC. He was a 2005-06 Pantech Fellow at the center, and the former foreign affairs columnist of the San Jose Mercury News.

North Korea's announcement this week of plans to test a nuclear weapon is hardly surprising. The six-party talks to negotiate an end to its nuclear program are dead, and the North faces escalating financial and economic sanctions by the United States and its allies.

Experts have long debated the real motivations of the North in developing nuclear weapons. Some contend that the nuclear program, even the latest pronouncement, is simply a bargaining chip to gain security guarantees and economic aid. Others see a long determination to become a nuclear state.

The North Korean leaders may have begun the nuclear program as leverage. But the U.S. invasion of Iraq seems to have hardened their conviction that the only way to protect their nation and their regime is to join the nuclear club. The North Koreans want to become a Pakistan rather than an Iraq.

Still, officials in Pyongyang hesitated to cross the provocative line of visibly demonstrating their capability. Pressure is being mounted to get them to back down from their pledge. But for a variety of reasons, they apparently believe the timing for a test is now optimal.

First of all, they hope to blame the Bush administration for their decision. In the statement issued this week, the North Korean government argued that alleged American war plans justify a nuclear test, a position that reflects the views of the North Korean military.

Second, the North anticipates the test will be successful. Although a plutonium weapon is more complicated than a uranium bomb, it is quite likely that the North now has sufficient confidence in a Nagasaki-style primitive bomb. This success would be an object of pride for an otherwise failing state, and bolster its claim to the status of a world-class military power.

Third, the North Koreans see their potential enemies tied down and unable to respond effectively. The Bush administration is locked into a disastrous war in Iraq, and about to be weakened even more if the Republicans lose the upcoming midterm elections. In South Korea, the government of President Roh Moo Hyun is already a lame duck and politically paralyzed.

Fourth, Pyongyang may bet that China and South Korea, the two principal sources of trade and economic aid, would not join the United States and Japan in any real sanctions against the North. The July missile tests by North Korea provoked international uproar and led to a U.N. resolution. But the real impact has been minimal.

Finally, the North may calculate that testing will facilitate Japan's efforts to become a "normal'' nation with a broader military role in the region. That prospect could increase tensions in Northeast Asia, especially between Japan and China, and that, the North may believe, is not necessarily bad for it.

The United States, South Korea and China must act together to show that these calculations are misguided and that the North will pay a painful price if it goes ahead. Certainly this severely tests the troubled American alliance with South Korea and the emergent partnership with China. But Pyongyang's miscalculations also offer an opportunity to repair the strained alliance and create a new structure of security cooperation in Northeast Asia.

It is no secret that Seoul and Washington have been at odds over how to deal with North Korea. But the test announcement has already accelerated a shift in South Korean opinion. Rather than holding the United States responsible for the current impasse, most Koreans now see North Korea as the instigator of crisis.

South Korean officials understand that without reinforcing the alliance now, no policy toward the North can be effective. The United States and South Korea should urgently agree on common action plans -- including a shutdown of investment and economic assistance from the South to the North -- and make those consequences clear to Pyongyang.

The planned visits of newly installed Japanese Prime Minister Shinzo Abe to Beijing and Seoul next week offer a similar opening to turn threat into opportunity. Abe intends to repair tattered ties to those Asian neighbors. Now the three Northeast Asian powers can demonstrate that a nuclear test will not lead to increased tensions but to the complete isolation of the North.

The danger of escalating actions that could lead, again, to war on the Korean peninsula is grave. The North Koreans should be assured that the door to a diplomatic solution remains open to them. But they must also understand that by profoundly misreading this moment, the North Korean leadership now stands completely alone in Northeast Asia.

Reprinted by permission.