APEC’s role in ‘new regionalism’

Posted on September 1, 2012


The contemporary interest in regionalism, often referred to as “new regionalism”, is undoubtedly one of the important trends in contemporary international relations. The study of new regionalism has much to do with the resurgence or emergence of regional organizations during the 1980s and 1990s. The revival of academic interest in regionalism has been associated with a number of developments at a global level. These include, the end of the Cold War, the increase in economic interdependence, and globalization. Scholarly attention has been drawn to the creation of a number of regional organizations, such as the North Atlantic Free Trade Agreement (NAFTA) and the Common Market of the South (MERCOSUR), which was created in 1991 in South America. Meanwhile, 1989 saw the birth of the Asia-Pacific Economic Cooperation (APEC).

While regions have been typically defined as geographically proximate, the existence of interdependent states and regional attempts at formal cooperation has made it evident that, these definitions are too narrow for modern day usage. Simply put, the connectivity between state borders need not be a necessary element to reflect cooperation and integration. Instead, the geographical criterion is too limiting an explanation of regions, in an increasingly interdependent and globalized world. This leads to “new regionalism”, the second wave of regionalism that needs to be related to the transformation of the world, is associated with interrelated structural changes of the global system.

Of these new regional organizations, the Asia-Pacific Economic Cooperation (APEC) has become the most interesting case study for applying the characteristics of “new regionalism”. APEC was formed in 1989 in Canberra, Australia, with support from the United States of America. Australia first proposed the formation of APEC with the intention of promoting open regionalism, with emphasis on liberalization, privatization and open markets. The APEC forum is now one of the main regional organizations seeking to enhance the level of regional collaboration in the economic area (Haider, 2002). Therefore, it is important to study the APEC from the perspective of the new regionalism theory.

Regionalism in the Asia-Pacific
In this section, regionalism in the Asia Pacific will be discussed. Therefore, it is also necessary to define the use of the term “Asia Pacific”. In Asia Pacific in World Politics, Derek McDougall (2007) points out that the usual definition of Asia-Pacific Region includes East Asia and the Western powers of the Pacific (the United States, Australia, Canada, and New Zealand). East Asia can be divided into Northeast Asia and Southeast Asia.

Northeast Asia covers China (including Hong Kong), Taiwan, Japan, South Korea, North Korea, Russia, and Mongolia. Southeast Asia comprises of Brunei, Myanmar, Cambodia, East Timor, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Apart from East Timor, all Southeast Asian countries are members of the Association of Southeast Asian Nations (ASEAN). While Australia and New Zealand are major powers in the South Pacific, the entire Pacific islands region comes within the definition of Asia-Pacific. Gaspinski (1999) also points out that some definitions of Asia-Pacific include not just the United States and Canada, but the Pacific seaboard countries of Latin America, Mexico, Peru, and Chile. In one way, the Asia pacific region can be defined by the group members of the APEC.

Concerning cooperation, the Asia-Pacific economies have no substantial history of regional consciousness in the level of institutional building. At the same time, the ability to undertake collective action has always been quite poor in Asia-Pacific, relative to that prevailing in Europe and North America (Rapkin, 2001; Drysdale and Patrick, 2007). Prior to the Second World War, the colonial form of economic regionalism prevailed in the Asia-Pacific Region, within monetary fiscal policies designed by home governments of the respective currency regimes (Dutta, 1999). At the same time, the ASEAN countries for example, had diverse roots: Indonesia had colonial ties with Holland; Malaysia and Singapore had ties with Great Britain; and the Philippines with the United States; while Thailand always remained independent. This chapter provides a background about the APEC organisation by discussing the origins, goals, scope and the structure.

According to Richard Feinberg (2007), the end of the Cold War created fresh opportunities for regionalism in the Asia-Pacific region. Indeed, growing market driven economic interdependence in the Asia-Pacific created more demand for cooperative problem solving. Interdependence is a feature in which natural or policy barriers are lower for commerce with some partners than with others, and therefore economic relationships are deeper with some partners than with others (Petri, 2005).

Myrna Austria (2003) said that there are two main reasons of weak regionalism development in West and East Asia. First, Asia in general has no enduring history of unity and accepted commonality. Second, the trading interests of Asian economies have been traditionally outside of the region, in North America and Europe. Mireya Solis and Saori Katada (2007) are interested in identifying the various factors that affect all countries in the region, and create incentives for pursuing Cross-Regional Trade Agreements, which offer unique opportunities for these countries to consolidate their free trade Agreement strategies. In La cooperation economique en Asie-Pacifique or (Asia-Pacific Economic Cooperation), Nathalie Lachance (2003) points that “new regionalism” is simply “regionalism ouvert” which means, an open regionalism.

Even though open regionalism is still not well defined among analysts, it is still an important characteristic of the contemporary studies of regionalism. Also, there are two other characteristics that go together with open regionalism. These are, namely, non-discrimination and voluntarism. According to Lachance, there is no difference between the words open regionalism, cross regionalism and new regionalism. Either one of them may be utilized in the discussion of the contemporary wave of regionalism. She also discusses the objectives of APEC in her article. So, the achievement of liberalization of the market, investments, and technical cooperation represent the main three objectives of APEC.

A new way of regional cooperation
It is necessary to recognize that we are dealing with a new wave of regional studies, different from previous ones in terms of theory and practice.

To begin with, the study of “new regionalism” is being carried out within the context of a structural change in the global system. The end of bipolarity has removed the significance of the Cold War as a structural description of the world. New regionalism needs to be related to the changes in the global system, especially in terms of economy and politics. Previously, the world economic system was a product of the Cold War. However, the economic system is now shaped more by the structures and dynamics of an increasingly, globalized world economy. Moreover, at the political system level, the boundaries between domestic and international ideas as well as values have become more intermingled.

Secondly, extensive scholarly interest in new regionalism has yet to generate a widely accepted definition of this term. As a result, the concept of regionalism is developed and used differently by different authors but with new vision. For example, new regionalism may be defined as a multi-dimensional process of regional integration that includes economic, political, social and cultural aspects (Hettne, 1995). According to Hettne, regional integration is a package rather than a single policy, whether concerned with economics or other aspects. New regionalism may also mean a complex process of change simultaneously involving state as well as non-state actors, occurring as a result of global, regional, and national levels. It is not possible to state which level is dominant, because actors and processes interact at the various levels and their relative importance differs in time and space.

Thirdly, the work of Schulz, Soderbaun, and Ojendal (2001) introduced new regionalism as a body of ideas, values and concrete objectives that are aimed at creating, maintaining or modifying the provision of security, wealth, peace and development within a region.The objective of new regionalism is to activate the process of cooperation and integration as an instrument to enhance the role of the state in an interdependent world. On the other hand, new regionalism is usually associated with a policy programme, with goals to be achieved and strategy, which consists of means and mechanisms by which goals should be reached. It normally leads to the creation of regional cooperative enterprises, organizations or institutions. (Chunyao Yi, 2007).

Lastly and in terms of practice, APEC is a premier forum for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region. APEC has 21 members, referred to as “Member Economies” which account for approximately 40.5% of the world’s population, approximately 55% of world’s GDP and about 43.7% of world’s trade. Also, the Asia-Pacific region is the geopolitical centre of the struggle for world power. It is the driving force of the global economy.

APEC member-states the US, Japan, China, and Russia are the most powerful economies in the world (Ravenhill, 2000). Moreover, the old regionalism usually grouped together similar countries, with the most successful being developed countries, while the less successful were developing ones. In contemporary times, however, regional organizations, specifically APEC, can consist of both developed and developing countries. Moreover, studying APEC is a necessity if a complete understanding of world politics and the international economy in the post-Cold War environment is to be reached.

Composed of the fastest growing economies of the world, coupled with the practice of new regionalism features, as well as the sizeable populations involved, APEC is capable of becoming a global leader in trade and economy. It is also a vehicle for trade facilitation and cooperation. More importantly, for developing countries, it provides a venue for discussion and collaboration on issues and technical matters that will enhance growth and cooperation with the leading developed economies in the Pacific region. Without APEC, there would be no regular framework for smaller economies, such as the Southeast Asian countries, to engage the United States in dialogue and debate on regional issues.

However, it must be mentioned that, notwithstanding the important role it plays in trans-Pacific economic cooperation, APEC has been the target of criticism concerning its apparent confusion as to its purpose and that it seems to have lost sight of its goals, as it is been suspended on the brink of terminal irrelevance. For example, is it possible to realize the ambitious goal of the liberalization of trade by 2020 for the developing countries? It also has to compete with a number of regional sub-groupings in Asia with interests that could potentially challenge APEC’s role in the region.

APEC has created numerous opportunities for its developing country members. For the past 20 years, many countries in the region have gained from their participation in APEC activities. APEC has effectively brought together countries in the region and established ties and networks that were previously non-existent or were not thought feasible. Its strength lies in the vastness and diversity of this network. It should therefore strive to strengthen this network by coming up with programmes that reinforce cooperation among member economies. APEC should pool in more resources for its goals in the coming years as it has the capability to build programmes that will be able to help members overcome the obstructions to significant participation in global cooperation on economic and security issues.

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Ramzi Bendebka

Posted in: Economy, Politics