http://www.carleton.ca/~shick/kelsey.htm DEMYSTIFYING APEC Dr. Jane Kelsey APEC (the Asia Pacific Economic Cooperation forum) is hard to get a grip on. Unlike the European Union (EIJ) it is avowedly not a trade bloc. Operating under the slogan 'open regionalism', APEC exists to service the needs of capital and promote its optimal expansion through unregulated markets, unrestrained foreign investment and unrestricted trade- firstly among its own members, then globally by ratcheting up the process in other parts of the world. What is APEC APEC has no institutional or bureaucratic structure, nor even a set of binding agreements of the kind the North America Free Trade Agreement (NAFTA) does. Instead it operates through a secretive annual cycle of ministerial meetings, scripted by meetings of officials and coordinated by a small secretariat in Singapore. The agenda, deliberations and outcomes of those meetings are visible only to those with privileged access, either as representatives of the member 'economies' or as official observers. The latter are limited to the Pacific Economic Cooperation Council (PECC), APEC's Business Advisory Council and the South Pacific Forum. It is impossible for any outsider to participate. A different member takes the chair of APEC each year and. depending on who it is, can wield considerable influence on the direction in which APEC moves. Commitments made by APEC members are described as voluntary and non- binding. That is formally true: APEC toes not directly regulate its member's economies. Agreement is reached by consensus; commitments are not binding on members: there is no formal dispute resolution process; and APEC has no enforcement powers. Peer pressure is meant to push governments to remove restrictions faster than they would on their own, and to minimize the risk of retreat. However, recent progress has been too slow for the Anglo-American members (US, Australia Canada and New Zealand) and they have begun pressing behind the scenes for a more legalistic, binding approach. While there are no formal criteria for membership of APEC, actual or promised liberalization is a de facto condition of entry. It is not clear where the APEC 'region' begins and ends. The 'Asia Pacific' is an artificial construct, with no natural geographical boundaries no common historical, D cultural social base, and no distinct or coherent identity of its own. It spans a diversity of small, middle and major powers with conflicting domestic concerns and in international alliances and interests. The 18 members comprise the six ASEAN countries of Malaysia, Singapore, Thailand, Philippines, Indonesia and Brunei, plus Australia, Canada, Chile, China, Chinese Taipei, Hong Kong, Japan, Mexico, New Zealand, Papua New Guinea South Korea and United States.. Yet the US and Canada have no obvious non-economic link to Asia. Australia and New Zealand have some geographical contiguity, but little more. Some obvious participants like China and countries of the South Pacific wore originally omitted altogether, most of the latter still are. The ASEAN countries who are integral to Asia have been least enthusiastic about the project. Indeed, Malaysia has actively promoted the idea of an East Asian Economic Caucus which would leave the US, Canada Australia and New Zealand out. A three year moratorium on membership was imposed in 1993. A number of countries, including Vietnam and India, are now seeking to join. The 1996 meeting in Manila will have to decide whether to take in new members and if so, an what criteria. Concern has been expressed that the inclusion of India, in particular, would significantly alter the dynamics of APEC, because of India's size, the intense domestic opposition to its structural adjustment program, and the difficulties India already faces in meeting its commitments under the Uruguay Round of the GATT/WTO. APEC has always been market driven and is heavily influenced by big business and private sector free marketeers. It mainly relies for research on the tripartite think tank of business representatives, academics and officials ‘acting in their own capacity' known as the PECC, which operates through specific task groups, forums and sponsored studies. It bas had formal observer status at APEC meetings from the start Between 1993 and 1995, APEC sought guidance on its vision from an ad hoc Eminent Persons Group (EPG), made up of radical free traders nominated by APEC members. Its reports were highly influential during that time in pushing APEC rapidly down the 'free trade and investment' road. But it was also perceived as heavily US driven, and far too ideological to be of practical use. Its role has since been assumed by the new Business Advisory Council (BAC), whose first report in Osaka in 1995 urged the accelerated implementation of Uruguay Round and APEC commitments, and expansion of APEC's mandate. Originally the BAC was to comprise one representative of big business and one from a small or medium enterprise (SME) of each member, but the number of representatives has risen to three. Few of whom tend to be from SMEs. There are three standing committees of APEC. The ad hoc committee on trade and investment became a standing committee (CTI) in 1993 and is responsible for coordinating the pursuit of trade and investment liberalization and facilitation. Similarly, the ad hoc committee on economic trends and issues became a standing Economic Committee in 1994. Its brief was to enhance APEC's capacity to analyze economic trends and specific issues, and to promote discussion among ministers on macro-economic issues and micro-economic issues that affect trade and investment flows. The Budget and Administrative Committee (BAC) looks after the programming and operation of APEC activities. All standing committees report to the senior officials meetings (SOMs) where the political business of APEC is done. There are other informal committees (e.g. Ad Hoc Policy Level Group on Small and Medium Enterprises, Ad Hoc Business Forum on Regional Cooperation for Power Infrastructure, Electricity Regulators Forum) and 'experts groups' (e.g. groups dealing with harmonization of customs procedures, dispute mediation, energy and competition policy, which is defined broadly to include deregulation, competition law, trade liberalization, corporatisation, privatization, anti-dumping and industrial policy.) Within these, key areas which enjoy the support of powerful APEC members ant INEs have begun to emerge. A new Electricity Regulators Forum has been established by the energy working group to 'provide a mechanism to pool expertise and compare experiences in managing regulatory changes requires to reduce risks faced by the business sector in undertaking independent power projects'. This has been making rapid progress in facilitating privately funded infrastructural projects. Facilitating the deregulation and privatization of telecommunications receive similar high-level support. There have also been moves for sympathetic academics to play a more active role. In 1993 the US suggested an APEC studies center should be established in every member 'economy' to promote collaborative research on APEC-related issues; teaching and academic exchanges among like- minded academics, and training of present and future technocrats, politicians and entrepreneurs on neo-liberal lines. The idea was slow to get off the ground this reflected the relatively low importance which academics attributed to APEC and the lack of government financial support for the project. A number of study centers now exist, but with no clear mandate, sense of direction or interface with APEC. Their first conference in Manila in May 1996 attempted to establish some coherence and connect them to the 1996 APEC agenda. However, papers produced by the centers show a divergence between the narrow neoliberalism of many of the Australian and American academics, who articulated their governments' preference for a more formal, institutionalized and binding APEC, and the more pluralist and culturally explicit appraisals from many of the Asian academics, notably the Japanese. The concept of open regionalism assumes a synthesis between APEC and other agencies in the global liberalization process. APEC maintains formal links and overlapping membership with other international, regional and sub-regional institutions and groupings (such as the IMF, Asian Development Bank. NAFTA) which are committed to the same agenda. In particular, APEC has been promoted as a way to push the free trade agenda of the GATT, now known as the World Trade Organization (WTO), further and faster than it would otherwise go. The Manila meeting is seen as an opportunity for APEC members to reach a joint position in preparation for the first ministerial meeting of the WTO in Singapore in December. The agreement reached during the Uruguay Round has already been extended since 1994. For example, officials have negotiated a new agreement on basic telecommunications; negotiations on liberalizing financial services took place in 1995; and negotiations to lift restrictions on maritime transport services are currently underway. New issues are being pushed to the fore in Singapore. The US is keen to get a labor or social clause on the WTO agenda (see further below). The EU has been lobbying hard to have GATT/WTO coverage extended from the current agreement on 'trade-related investment measures' (TRIMS) to a full multilateral investment agreement—which would make commitments to the liberalization of foreign investment binding and, once made, effectively irreversible. Given recent APEC developments in this area, the discussion in Manila is bound to flow on to Singapore. THE HISTORY OF APEC When APEC was formed in 1989 there was no agreed future plan or set of objectives. In the next five years it passed rapidly through three phases which can be likened to birth childhood, and adolescence. Views about its function, its relevance, and its form have changed significantly in that time. It has only recently become clear what the adult APEC might look like and do, but it is very unstable and its future is far from clear. The Birth: APEC was born in the frenzied atmosphere of the late 1980s. Major and middle powers jockeyed for a place in a new global economic order as its boundaries, institutions and alliances were redrawn. The Cold War was coming to an end. Multilateral trade negotiations in the Uruguay Round of the GATT looked like breaking down. Countries feared the aggressive unilateralism of the US, and the spillovers from bilateral tension between the US ant Japan. The deepening and expanded membership of the then European Community and of the Canada/US free trade agreement to include Mexico reinforced the image of world breaking into defensive trading blocs. Countries in Asia and the Pacific Rim—notably Japan, Republic of Korea, ASEAN members, Australia, and the US—had strong, but differing, motivations for reaching a regional arrangement of their own. A number of uncoordinated and often competing ideas were floated at the time. By early 1989 a base-line of support emerged for some kind of ministerial level cooperation on trade and economic issues, opposition to trade blocs, and support for the GATT. This was to be an outward-looking, non-institutionalized arrangement which would hasten liberalization of the global economy. But its specific function remained unclear. The Australians saw APEC as counterweight to unilateral, multilateral and regional aggression by the US and EC; logically, then, the US and by association Canada, would have to be left out. Japan's vision for APEC was a regional vehicle which could assess economic trends and options and foster dialogue. But it also favored a multilateral alliance which included the US. to help defuse fears of its own dominance in the region and strengthen the US' commitment to Asia. The US eventually finessed its way in, with the support of Singapore, Indonesia and Japan. There followed a year of behind-the-scenes dialogue, brokered by Australia. It was finally agreed to established APEC as a low-level process to help coordinate views on trade and economic issues at a ministerial level. Commitment and expectations varied. ASEAN countries were the most reserved, although they varied as to degree. They were both victims of major power aggression and major investors in the region themselves, so saw benefits in a forum where they could present a collective voice. But they also feared that a regional arrangement would undermine the cohesiveness and importance of ASEAN itself. Their support for APEC was premised on a flexible and gradual approach which was sensitive to the vast disparities in the region, its asymmetrical power relations and continuing tension between North and South. Japan, having already established its economic presence in most Asian countries, sought to promote its own interests by fostering economic cooperation and enhancement of host countries human and physical infrastructure. The US and increasingly Australia, New Zealand and Canada, became much more focused on eliminating barriers to trade and investment in markets which they desperately wanted to penetrate. Childhood: The first ministerial meeting of APEC was held in Canberra in November 1989, where they agreed to establish a ministerial forum to discuss Asia Pacific economic issues, to be coordinated through senior officials' consultations. A haphazard collection of collaborative projects were put forward and given ministerial support. A second ministerial meeting was held in Singapore in July 1990 but little was achieved. For most of 1990-92 APEC was preoccupied with sorting out applications for membership from governments which feared being left out in the cold. A particular problem was the simultaneous entry of China, Taiwan and Hong Kong, which were accepted in 1991. To avoid diplomatic problems, APEC was thereafter referred to as a community of economies, rather than countries. This was subsequently used to justify the artificial separation of economic liberalization from issues of governance, social equity and human rights. Mexico and Papua New Guinea came on board in 1992. When Chile was accepted for 1994 a moratorium on new members was set down until 1996. The Adolescence: The first real focus to APEC came with the Seoul Declaration of APEC Ministers in 1991. The Uruguay Round was still in stalemate and fears of 'introspective regionalism' were high. Some members were challenging APEC's lack of progress, and questioning its value and role. The Declaration asserted that economic growth had fostered interdependence and strong common interests. This had produced a healthy and balanced development, built on a spirit of partnership, openness and commitment to the free flow of goods and capital. Closer cooperation would mean more effective use of human and natural resources and sustained economic growth, while reducing economic disparities and enhancing the social well- being of the region's peoples. Topics identified for future attention were exchanges of information and consultation, including the private sector, reducing impediments to trade and capital flows; and promoting regional trade, investment, finance resource flows human resource development and industrial cooperation. Two significant moves came out of the fourth ministerial meeting in Bangkok in 1992. A secretariat was to be established in Singapore, and an 'eminent persons group' (EPG) was to be established to report to the 1993 meeting with a 'vision for trade in APEC to the year 2000'. APEC began to take a clearer shape in 1993 when the US assumed the chair and secured oversight of the meetings, the agenda and the documentation. A heavily US-driven agenda emerged. US leadership was symbolized by Clinton's agreement to host the first leaders summit in Seattle in November 1993. Despite the vague 'vision statement' which emerged. the meeting gave the political seal of approval to the entity. The US nominee also chaired, and heavily influenced, the EPG process and actively directed the trade liberalization part of its work. APEC's impetus for the next two years came from the EPG reports of 1993 and 1994 which promoted a post-GATT agenda of liberalized investment flows, harmonization of environmental, labor and product standards, and economic policy coordination as the driving theme. The 1993 EPG report presented a neo-liberal vision for the future: APEC as a market-driven initiative which would 'ratchet up' the GATT process through cooperation at the regional level, and 'protect the forces of market-driven interdependence against governmental intrusion that could otherwise retard its natural evolution'. This went beyond eliminating all border barriers to trade to include such 'domestic' policies as competition law, dispute settlement, environmental issues, export credits, financial services foreign investment, government procurement, intellectual property rights, state trading, tariff reductions and tariff matching in particular sectors. It would also require greater coordination of domestic economic affairs, including macroeconomic and monetary policy. Economic, finance, trade and industry ministers of APEC members should gradually assume the central role in the APEC process, including its annual ministerial meeting. This would see APEC take on an OECD-style policy coordination role, without the institutional framework or the visibility of the OECD. The 1994 EPG report reinforced the central theme. Conclusion of the Uruguay Round had made the world safe for outward-looking regionalism. The primary goal was free and open trade and investment in the region, to be implemented by the year 2000 and completed by 2020, with different stages according to the economic development of its members. This was intended to trigger a whole new GATT/WTO negotiation round. The EPG wanted link between APEC and the IMF, the World Bank. the International Finance Corporation and the Asia Development Bank made more explicit, with suggestions that they be included in the regional dialogue, along with the heads of each member's central bank. The interface between the international agenda and domestic politics was made explicit by stressing the overlap between trade liberalization and domestic 'trade-related' policies and the need for economic policy dialogue. In the EPG's eyes, APEC was a prime launching pad for future GATT agreements on dispute settlement, trade and environment, labor and investment 'harmonized promotion of economic growth, energy security and environmental protection' could be pursued either in the WTO, or some 'new institutional mechanism for international environmental management' based on 'polluter-pays' as a global norm. Standards should be harmonized where possible through a standards and conformance framework. Where not possible, a model mutual recognition agreement would promote the principle of 'tested once, accepted everywhere'. And a new dispute mediation process should be set up to supplement the WTO. The report urged APEC to adopt the draft Asia Pacific Investment Code developed by the PECC. Initial acceptance would be voluntary. Those members would then be bound and their progress toward implementation reviewed each year. Although called 'voluntary', competitive disadvantage was expected to attract all members in time. The eventual goal was full participation. That could be backed by an element of coercion. PECC referred to the role of international institutions, such as the World Bank. the IMF and the Asia Development Bank 'in influencing investment rules in both home and host countries and solicits their support through consistency of their policy recommendations and loan conditions with the provisions of this code.' The code's signatories would have to ensure transparency, most-favored nation treatment; standstill and progressive rollback of restrictions on establishment and performance requirements for foreign investment; national treatment; free and prompt transfers of currency, nationalization only for a public purpose, on a non-discriminatory basis, according to due process of law, after all legal avenues have been exhausted, and with prompt compensation based on the pre-nationalization market value; and progress toward harmonization of foreign investment policies, especially on taxation legislation incentives and subsidies, to encourage tax compliance and 'efficient location of investment'. The need to actively prevent the gross exploitation of workers, communities and the environment was ignored. 'Signatories recognize that it is not appropriate to relax domestic health, safety and environmental measures for the sole purpose of encouraging investment.' Investors were merely expected to act as 'good corporate citizens' by 'contributing to the well- being and development of host economies' and would be 'encouraged' to accept responsibilities and standards of corporate behavior relating to local community values and customs and compliance with local laws, regulations and policies. The Unstable Adult: In December 1994 the APEC leaders took their first concrete step and endorsed the proposed goal of free trade and investment in the region, to be achieved by developed countries by 2010 and developing countries by 2020. This was expressed through a set of 'voluntary, non-binding' investment principles. The only public voice of dissent was that of Malaysia's Prime Minister Mahathir Mohamad who annexed his own conditions to the agreement. Mahathir was ridiculed by the non-Asian media, politicians and officials; but his insistence on pragmatism and his skepticism of Western motives enjoyed considerable, albeit quiet, support from Asian allies. It seemed that the Anglo-American agenda had held sway. But despite the carefully cultivated image of consensus, underlying dissension began to emerge. In 1995. Japan took the chair with an agenda of its own. The 1995 Osaka meeting was required to produce an action agenda for putting the Bogor Declaration into effect. Much to the annoyance of the Anglo-American bloc, who wanted a schedule for liberalization that was binding, could be monitored and allowed comparison of performance between member, Japan promoted the model of 'concerted unilateral liberalization'—leaving each country to determine its own plan in a manner that was voluntary and flexible. Malaysia explicitly, and South Korea and Japan more cryptically, insisted that voluntary and non-binding mean they would meet the Bogor targets if they could. The US, Australia and NZ were adamant that entering the agreement was voluntary, but once that was done members were bound to comply. There was a similar disagreement on whether 'free trade and investment' means zero, or something less demanding. The US accused Japan of deliberately slowing the momentum by requiring only unilateral, non-binding offers under the 1995 Osaka Action Agenda; trying to protect its own agricultural markets for domestic reasons; and diverting attention from trade liberalization through its Partners for Progress program, which promised 10 billion yen over five years to promote development cooperation in the region. As a result of the Action Agenda, all APEC members are required to table at the Manila meeting their individual action plans (IAPs), setting out their initial steps toward the 2010/2020 goal. These IAPs have been negotiated by officials, in consultation with their ministers, at a series of meetings throughout the year. The IAPs were meant to remain secret until signed at Manila—only those whom governments and officials chose to consult would know, in advance, what future governments were being committed to do. To the irritation of APEC governments, the second (August) drafts of the IAPs were leaked to NGOs in Hong Kong and subsequently posted on the Internet. For the first time since APEC was formed governments can be called to account for what they are intending to promise before this has become a fait accompli. How much notice they will be prepared to take of criticism. and how far they will put the voices of their citizens ahead of the voracious demands of, and for. capital, remains to be seen. While the APEC rhetoric is uncompromising, the reality is therefore fragile. The US, Australia, Canada and New Zealand continue to push an aggressive liberalization agenda, while ASEAN and other Asian countries take a more pragmatic approach. Japan wants to stand with a foot in each camp. At Osaka last year there was speculation that APEC might not even survive, although this seems unlikely as no host 'economy' will want the responsibility for letting APEC fail. The tension between the Anglo- American desire for a more formal, legally-binding free trade agreement, and the determination of most Asian members to retain a flexible, voluntary and pragmatic approach will provide the sub-text at the Manila meeting this year. Meanwhile APEC's committee structure continues to pursue the common goal of promoting regional integration, with a bias toward the work program established during the period of American ascendancy. Whatever happens at the political level. this work will continue through the official committees of APEC and the support bodies of PECC, APEC study centers and the BAC. FALLACIES ABOUT APEC The image created around APEC is a lot of hype. To break through the propaganda wall a number of common fallacies need to be exposed. 1. The APEC (and WTO) model pretends that all the players in the 'global economy' will play by the rules to which they have agreed. The track record of powerful governments in these trade organizations shows they are highly pragmatic and selective about what rules they are prepared to obey. The US, in particular, insists on its sovereign right to use unilateral sanctions against anyone it considers is behaving unfairly towards it—at the same time as demanding that all other countries subordinate their sovereign right to make their own decisions to the international trade rules. Threatened or actual US trade sanctions are an intimidation strategy familiar to many APEC members, especially South Korea, Thailand, Philippines and Japan, and may help explain their reluctance to provide binding APEC rules which the US can use in the same duplicitous way. 2. APEC is not simply about trade. APEC promotes a package deal of economic policies which include: minimal controls on big business; unrestricted foreign investment; unlimited export of profits; privatization of state assets, utilities and services; full exposure of domestic producers to cheap imports; removing support for domestic industry while offering foreign investors incentives; privately- funded and owned infrastructure (roads, rail, electricity, telephones, water. etc. operating through deregulated markets; market-driven service sectors, including social services like health and education; 'competitive' (i.e. low- cost and deunionised) and 'flexible' (i.e. temporary, part-time and contract- based) labor markets; destruction of sustainable community-based production in favor of costly and ecologically unsound cash crops for export; rampant exploitation of natural resources; free movement for business immigrants, while retaining strict controls on foreign workers and refugees; and so on. 3. APEC is not simply about economic policies. Such policies have serious 'noneconomic' flow-on effects, including: increased inequality and poverty, especially for indigenous peoples, women, children the elderly; unstable, low-quality, low-paid employment with cuts to real wages and to the social wage; tax benefits and high incomes for companies and for the rich, alongside income and welfare cuts for the poor; dispossession and forced relocation of indigenous peoples and local communities, often adding to the urban unemployed; commodification and commercialization of traditional, especially indigenous peoples', resources and knowledge; problems of access to, and affordability and quality of essential services; run-down state infrastructure; control by private, often foreign owned, conglomerates over the country's financial, transport, communications and media infrastructure; sale (or effective gift) to private, often foreign, owners of resources that legitimately belong to indigenous peoples; pressure to minimize environmental protections in the name of promoting investment, tourism, mining, and so on. 4. Decisions being made at APEC, and the WTO, are designed to set this model in concrete. The architects of APEC want to pressure present governments to adopt the free trade and investment agenda and make it impossible for future governments to change tack. So: if the economic theory doesn't work; if the social. environmental and cultural costs are too great; if the power it delivers to big business, foreign institutions and private actors is unacceptable; if citizens simply want to try a different way, there will be nothing they can do. 5. APEC is fundamentally anti-democratic APEC operates through closed meetings of like-minded officials, politicians, private sector representatives and academics, who belong to a network of related economic agencies and institutions. Almost all deliberations remain secret until after the decisions arc. New Zealand journalist Bruce Ansley observed the process at work during the APEC trade ministers meeting at Christchurch in July this year: "Little of it was reported. It met in secret, except for a few handouts, and the odd press conference where the idea was to say as little as possible and to stall questions with urbanities. No one outside the charmed circle knew what was going on, and those inside intended to keep it that way; for all we knew they could have been plotting a new holocaust (although that was unlikely; at its conclusion, the best that Trade Negotiations Minister Philip Burdon could say of their efforts was that the meeting could have been a disaster, but was not so it must have been a success). What they were plotting, of course, was a brave new world where nations and their corporate alter egos could browse across one another's boundaries without impediment A few elements of the new order presented themselves for inspection; there won't be nations—in APEC language (as singular as Esperanto) nations become "economies" without, apparently, irritating social philosophies. These economies aren't inhabited by people but by 'human resources". They don't have elected representatives: doubtless to his gratification, Jim Bolger becomes an economic leader". It is cold and gray and mechanical and scary as hell. (Listener, 3 August 1996) Because the signing of intentional treaties, including those dealing with trade is considered an act of state by many governments, these agreements do not require ratification by the legislature and can therefore be signed without any debate, let alone a formal vote. The US government requires both a mandate and formal ratification of any binding agreements they sign, but because APEC is described as 'non-binding' the US is able to circumvent that requirement also. This secrecy gives officials and ministers, who hold office only in the short-term, enormous power that extends well beyond negotiations about trade and enables them to lock future governments into pursuing the global free market goal. For those who are subject to the rule of illegal governments, either as indigenous nations denied their sovereignty or people under military or foreign powers, who will be sacrificed on the table of free trade and investment, the injustice is even more profound. THE COST OF APEC Because APEC claims to be a community of economies—not governments or countries—it excludes from consideration any 'non economic', social or political issues like human rights, poverty, employment or environment, unless they are redefined in 'trade-related' terms. That is also used to rationalize its anti-democratic membership and processes which ensures that a mutually reinforcing elite of capitalists, government officials, academics and fellow travelers remain firmly in control. Human Rights Recent APEC meetings have become synonymous with human rights abuses, as host governments try to eliminate any potential embarrassment to themselves or their guests. In Jakarta in 1994 the government cleaned the streets of itinerants and the poor, cracked down on dissident journalists, and banned meetings and a press conference organized by a small number of regional NGOs who had gathered to express their concerns about APEC. At Osaka, Japan in 1995 the homeless who lived in the square outside the conference venue were forcibly relocated to the other side of town: local journalists reported that the ensuing inter-group conflict led to at least one death. In Manila this year thousands of families have suffered relocation and evictions for 'security reasons' in rural areas. The Philippine government has demolished the shanties of over 400,000 families in an attempt to create an 'eye-sore-free' zone for foreign dignitaries as part of its 'beautification' program. A state of virtual martial law has been declared in Central Luzon, with massive troop mobilization and reactivation of paramilitary groups, curfews and checkpoints. Farmland in the Clark Special Economic Zone has been cleared for a runway extensions, despite farmers protests that they were not even allowed to harvest their crops. Dissent is also being suppressed. Potential 'troublemakers' have been threatened with arrest, while surveillance and harassment have increased. Around 100 other East Timorese were reportedly turned away at the airport; they were denied entry even as transient passengers, on the unsubstantiated suspicion that they would stage rallies against the Indonesian occupation of East Timor during APEC. The Philippine government announced a blacklist of at least 100 people from 18 countries who would be refused entry to the country, lest they disrupt the APEC meeting. These included known supporters of East Timor independence including 1997 Nobel Peace Prize winner Jose Ramos Horta, who was invited to address the Manila People's Forum. South African delegates to the Anti-Imperialist World Peasant Summit and the People's Conference Against Imperialist Globalization were arrested by immigration personnel and threatened with deportation. Others were denied visas to the Philippines. Meanwhile the government has promoted pro-APEC rallies and supported a pro-APEC NGO meeting on sustainable development, which will culminate in a presentation to President Fidel Ramos. All this is designed to promote an image of a prosperous Philippines and avoid embarrassment to APEC leaders, especially the Indonesian government which is already a major investor in the Philippines. Defending the decision to refuse entry to Horta and others, Ramos said: 'It is not so much the threat to national security that we are banning foreigners from this announced fora relating to APEC. It is that it is inimical to our national interest.' If governments will go this far just to look good at a meeting, what will they do to create an attractive free trade and investment regime and lure foreign investors to their shores? Who and what will they sacrifice along the way? Such overt suppression exposes the narrow, self-serving definition of 'freedom' to which they adhere. As Conrado de Quiros observed in the Philippine Daily Inquirer on 25 October 1996: If you can allow goods to flow freely into countries, why can't you do the same thing for ideas? . . . They're not about justice, they are not about dissent, they are not about people being free to say what kinds of development they want. Freedom has no place in economic progress. Human rights have no place in economic progress. At the end of the day, principle must give way to expedience. Growth must take precedence over the moral imperative to right wrongs. Disrespect for human beings and human rights is intrinsic to APEC's goals. Economic equalization between countries in APEC is left to market-driven economic growth. People are treated as resources to be utilized in the quest for growth and economic gain. According to PECC in 1994: 'The very diversity of the physical and human resource endowments of APEC participants . . . creates enormous opportunities for further increases in mutually beneficial trade and investment within the region. Two Australian officials deeply involved in the process encapsulated the prevailing view: What is new in East Asia and the Western Pacific is that close observation in neighboring country after neighboring country that trade liberalization enhances economic performance has changed political perceptions of the payoff matrix. Any perceived disadvantages in changes in income distribution associated with trade liberalization are judged by the political process to be less important than national gains. Those judgments are helped by the obviously favorable effects on the incomes of the relatively poor in labor- intensive manufactured export expansion in labor-abundant economies. (P. Drysdale and R Garnaut, 'NAFTA and the Asia-Pacific region: Strategic Responses', pp. 103, 110) Human needs are subordinated to the goal of national and regional economic growth, based on the dubious assumption that the benefits will eventually trickle down. They avoid addressing this by redefining the region as a 'family' of 'economies'. States, governments, indigenous peoples, paid and unpaid workers, women, children, communities, and ecosystems are all irrelevant, except as vehicles to promote the interests of capital or resources to fuel production and profits. A Social Clause and a Green Clause? In the past two years there has been a cautious and self-serving recognition of these issues in official discourse on free trade. Indeed, demands for improved labor and social conditions, and for greater democratization, now frequently accompany calls for free trade, and are beginning to emerge at APEC. This poses a rather bizarre paradox. Protection of labor and human rights assumes that a state has the recognized right, and the practical ability, to regulate relevant activities that occur within its realm. But the deregulatory requirements of free trade and investment makes such protection ideologically unacceptable, economically costly and extremely difficult to achieve. Human rights abuses frequently accompany free trade. Foreign and domestic investors seek minimal barriers to the exploitation of people and resources. International competitiveness almost inevitably dictates the deregulation of labor markets, less onerous health and safety requirements erosion (or elimination) of minimum wages and conditions, lack of job security, reduction of the social wage. Governments seeking to promote these conditions often resort to repression to silence the victims, political opponents and public critics. Recently there have been calls for a labor or social clause in both APEC and the WTO, supposedly to address these concerns. It is no accident that such calls emanate from governments and businesses in Anglo-American countries. Their domestic political conditions and constitutional obligations make it difficult to compete with countries which have less restrictive political, human rights, labor and environmental codes. Hence their motives are basically projectionist—they want to enforce a uniform model of free trade ant investment on all countries, but require a regulatory environment that protects them in areas where they can't compete. At the same time, these governments increasingly apply double standards—demanding stronger commitments to labor and human rights, and democratic government from their trading partners while they move to erode such standards at home. Their trade unions often support these calls out of concern to protect the jobs of their members from cheap labor offshore. Likewise, NGOs which have significant leverage in these countries want to secure commitments to higher standards offshore, rather than see their own standards fall. Similar controversy has surrounded calls from some environmental groups for engagement with both APEC and GATT/WTO to promote the 'greening' of international trade. At the end of the Uruguay Round the WTO created a Committee on Trade ant Environment to examine the tension between the multilateral trading system (MTS) and multilateral environmental agreements (MEAs). APEC has established a committee to develop a Japanese-initiated project to reconcile economic growth, energy requirements and environmental sustainability. Earlier this year APEC held a ministerial on environmental sustainability and trade. PECC has produced its own report on the issue. APEC's interest in the environment and sustainable development is driven by the needs of the economy, not concern for the environment or the people who depend on it to survive. The futility of attempts to redirect the priorities of such agencies from within is vividly illustrated in a legal brief prepared in September 1996 by the World Wildlife Fund (WWF)—a relatively conservative organization in envirornmental terms, and one which has promoted 'constructive engagement' with the WTO. The brief, entitled 'Trade Measures and Multilateral al Environmental Agreements: backwards or forwards in the WTO', exposed recent moves within the WTO to subordinate environmental interests to those of trade. Similar positions are undoubtedly being promoted by same body of trade officials within APEC. New Zealand officials, in particular have argued that conflicts between MEAs and the MTS should be resolved within the WTO framework, thereby giving precedence to issues of trade. They propose an 'accommodation' which would allow trade restrictive measures to be taken under MEAs, but on very limited terms. These conditions are: proportionality: the negative trade effects of the measure must not outweigh its environmental benefits, even if alternative measures cannot achieve the environmental objectives. That means the WTO would decide what level of environmental protection a country could legitimately impose; effectiveness: the burden of proof falls on the environmental side, with problems of evidence, levels of proof, the time scale in which effectiveness is to be achieved, and the determination of such factors by non- environmental experts at the WTO; least-trade restrictive: precedence would be given to trade rules when determining which is the best way to secure environmental policy objectives—again, as judged by the trade experts at the WTO. These restrictions on the use of trade sanctions would not only apply to the GATT/WTO agreement on trade in goods, but would include agreements involving intellectual property (TRIPS) and services (GATS) (dealing with matters like transport and tourism). Further, New Zealand's proposals would only 'accommodate' MEAs that deal with a limited number of global environmental problems. That would exclude, for example, the Convention on International Trade in Endangered Species and the Basel Convention on the Control of the Transboundary Movement of Hazardous Wastes. The WWF expressed grave concern about the potential chilling effect which these proposed guidelines or limited exceptions could have on commitments to negotiating, extending and implementing MEAs. For example, if this position had applied when the Montreal Protocol to control ozone-depleting substances was negotiated, it could well have inhibited the inclusion of essential enforcement provisions which rely on trade sanctions. Even if introduced now, these criteria could undermine the effectiveness of trade sanctions for ozone-depleting substances still being phased out under the protocol. Alternative Responses Opposition to the promotion of a social and green clause in APEC and the WTO does not mean that issues of labor, environment, human rights and democracy are of no concern. To the contrary, they are critical issues which should be accorded primacy in the appropriate international, regional and national forums, not subordinated within the global free market framework of APEC and the WTO. Demands to that effect have now emerged. Until 1995 APEC successfully presented an image of determination and unity, with public dissent limited to attacks by and on Mahathir. Its apparently unchecked progress toward a free trade and investment regime and integrated economic policy attracted growing concern from NGOs, workers' organizations and human rights groups. The price of rapid economic growth had already been the exploitation of peoples and the environment, and increased dependency on European and North American markets and major regional powers. In the APEC community of 'economies', apparently the only relevance of governments, indigenous and local peoples workers, women, communities and ecosystems was as vehicles to promote the interests of capital, or as resources to fuel production and profits. Anger at his was reinforced by the anti-democratic, unaccountable and non-transparent way in which APEC operates. The informality of the process made it almost impossible to secure information, participation and access, and there was no place to force a debate on its economic agenda or regulatory policies. This, in turn, usurped the authority of national governments, who were considered unaccountable enough on their own. After the US began to assert itself in APEC in 1993, a counter-network of NGOs, unions, human rights and environmental groups rapidly emerged. In April 1994 the working group on APEC met in Bangkok and issued a statement which urged discussion and debate over the role of APEC. They proposed a people-centered approach to economic and social self- determination through a regional social charter 'that will ensure that urban and rural workers, subsistence consumers, small scale and informal sector producers are effectively protected against the onslaught of economic globalization'. Alongside the Jakarta APEC meeting in November 1994, representatives of 10 regional NGOs struggled to meet and discuss concerns about APEC in the face of Indonesian government hostility. One year later, representatives from over 100 NGOs ant unions concerned with the environment, human rights, labor issues, and economic and social justice gathered for a meeting before the Osaka summit. Most of these were linked to other NGO or labor groups working on related issues, forming an active overlapping counter- network of their own. Their official statement endorsed cooperation among the countries and peoples of the region, but rejected the free market and trade liberalization model embraced by APEC as negating the development and democratic aspirations of the region's people. While most APEC governments were hostile to, or dismissive of, the NGOs, many of the issues were taken up by the media at official APEC briefings. Subsequent moves to incorporate environment and labor issues within the APEC agenda (on APEC's terms) and suggestions by the Philippine government of dialogue with NGOs suggest a desire to pre-empt serious questions about APEC's legitimacy. The official in charge of the Manila SOM recently suggested in May 1996 that 'the networks of civil society deserve attention in a participatory framework of markets corrected for failures due to externalities and non-provision of public goods. Viewed this way, truly representative non-government organizations must therefore be given chances to present their own agenda for eventual incorporation by the intergovernmental network of APEC in the implementation of action plans.' This apparent sensitivity begs more questions than it answers: who would be considered a truly representative NGO, by whom and according to what criteria; can NGOs, by their very nature, ever be 'truly representative'; who would they be accountable to? On what terms might NGOs and their agenda be incorporated? Can pro-liberalization, non-market organizations demand to be included? What would such NGOs need to do to maintain their credibility and credentials with APEC? And, obviously, how could the democratic, social, cultural and environmental deficits of APEC be remedied simply by allowing NGOs to take part in APEC on its terms? As within APEC itself, there are differences among its critics on the appropriate response. Many, but not all, Anglo-American NGOs and unions tend to support dialogue and participation within APEC to secure commitment to a green and/or social clause. That generally implies a more rule-based approach of the kind their governments propose. Most, although not all, Asian NGOs at the Osaka meeting opposed such participation, believing that would help formalize and legitimize APEC and condone the redefinition of basic rights within the APEC paradigm. They preferred to develop independent, people-based strategies to challenge APEC's lack of political and popular legitimacy, transparency and accountability from outside. Despite a greater cultural sympathy for the Asian governments' approach, their target was not simply one faction in APEC, but the interests of Asian and Western capital whose aspirations it represents. The message behind this position is crucial. APEC is not the enemy in itself. It is a relatively transitory vehicle through which the global interests of capital, and those of its agents and allies are presently pursued. Even if it falls apart or its internal conflicts reduce it to a shell, the networks which feed it will continue operating and perhaps take on another form. Mobilization and strategies to address the core issues of economic, social and popular justice need to remain the focus. and not be subsumed to the agenda of those whom we seek to bring under control.
