APEC and ASEAN – Competing or Complimentary Organizations

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Context

250_apec-fAPEC and ASEAN are the two main bodies facilitating cooperation between nations of the Asia Pacific region. This article seeks to stipulate the main differences in the two organizations and also to analyze the cause of rising tensions over the future of APEC and how major stakeholders are seeking to influence its evolution. Pakistan’s outlook in the region will be looked at in the context of PoliTact’s previous article on India’s Looks East Policy.

Analysis

 

APEC

APEC is the Asia Pacific Economic Community, established in 1989 to help facilitate the growth and community of ‘member economies’. There are 21 member economies (countries) today, with the original 12 countries consisting of the US, Australia, Canada, New Zealand, Japan, Indonesia, Singapore, Malaysia, Brunei, Thailand, the Philippines and the Republic of Korea. Since then, Chile, Peru, Mexico, China, Russia, Vietnam, Hong Kong, Papua New Guinea and Chinese Tai Pei have joined.

APEC’s basic goals are to work towards tariff reduction and reduction of other trade barriers between member economies in order to promote efficiency in domestic markets, and to increase exports of member economies. Less enthusiastically, APEC is also concerned with the free movement of people between member economies-however this is a bone of contention within the organization, given that it has such wealth disparities present between member economies.

Member economies of APEC account for over 50% of world GDP, and over 40% of the world’s population.

 

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ASEAN

ASEAN is the Association of South East Asian Nations, created in 1967 with a much narrower charter than APEC, and only five founding members: Thailand, Indonesia, Singapore and the Philippines. Today there are 10 members of ASEAN, with Brunei, Cambodia, Laos, Vietnam and Myanmar joining at various stages between 1984 and 1999.

ASEAN is much more focused on regional stability and community with initiatives involving education, cultural exchanges, research and technological advancement. Economic interests are of course a part of ASEAN; however they are far less articulated than in APEC.

In 1997 ASEAN + 3 was formed, including the regional powerhouses of China, Japan and the Republic of Korea into the ASEAN fold. The +3 members are not considered full ASEAN members, but partake in similar activities as between the ASEAN members themselves. On top of the ASEAN+3 members, ASEAN as a regional body has dealings with other non-member states in the Asia Pacific region, these include the US, Russia, Australia, Canada, India, New Zealand and Pakistan. Inter-organizational relationships are also present between ASEAN and the EU and UNDP.

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ASEAN and APEC both figure prominently in the region, however APEC is marked for being the organization which can, if any can, bring an Asia Pacific community into being. While comparisons with the EU are inevitable, they can never be more than passing comparisons because of the vastly different historical, cultural and economic make-ups of the two organizations. APEC is unique in that it seeks to make community where little common history and culture exists-the nations of Chile and Japan will never share the same kind of bond that countries of the EU share, simply because they have not be forged in a common historical furnace. APEC has found commonality in its member countries via economics.

The future of APEC is widely contended, even between member economies. For China, the current, non-binding and voluntary nature of the organization is perfectly suitable for its needs, and China has expressed a desire that the ‘APEC Approach’ continue in its current course. The benefits China has derived from being a member of APEC are manifold, and include the development of over 14 bilateral FTAs since becoming a member. Japan on the other hand, partly because of the Chinese economic domination in the region is pushing for a more institutionalized and enforceable set of governing principles for the organization. Prime Minister Hatoyama of Japan has expressly stated the APEC as an institutionalized regional economic body should be put ‘firmly into place’-an agenda that he will be pushing as the APEC host in 2010.

The US shares this view with Japan to a certain extent-APEC has the distinction of being the only regional economic organization of significant size the US is a member of-with 60% of the US’s export heading to APEC member economies, the US wants, nay needs APEC to become the primary regional body for the Asia Pacific, since it is excluded from the majority of other regional organizations. The US is in direct opposition to China, in that the so called ‘noodle bowl of agreements’ that has served China so well, is seen as an obstacle for US interests in the region. The US doesn’t necessarily share the vision of an all-encompassing community as hinted at by Australian Prime Minister Kevin Rudd, or even Japan’s more integrated vision-the US desperately wants APEC to become a Free Trade Area, so that the more than 150 bilateral FTAs signed between APEC members and other regional nations (to the exclusion of the US) are subsumed under the overarching APEC Free Trade Area.

Pakistan is looking at being on the fringe of an increasingly integrated Asia Pacific-as discussed in a previous analysis of India’s Look East Policy, Pakistan is somewhat isolated from the member states of this region due to India’s industrious alliance building. That being said, China remains a friend to Pakistan, and the US is bound up in Pakistan with the ‘War on Terror’. Pakistan is in the duplicitous position of being comparatively smaller importance economically, but being of central importance to regional security and even global security matters.

India has been denied membership to APEC, despite support for inclusion by the US, Japan and Australia-a primary reason being that it does not border the Pacific-a founding logic of the organization. Its hopes are better places within ASEAN, but both Indian scenarios paint a dim picture for Pakistan with the future of either organization. China’s vision of APEC is the one that will be most in Pakistan’s favor, as any solidifying of regional community will most likely be to the exclusion and detriment of Pakistani interests in the region.

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