History of APEC
The then Prime Minister of Australia Bob Hawke took the initiative to form APEC. In 1989, the first ministerial meeting was held in Canberra, Australia. The six then ASEAN countries (see separate chapter on ASEAN) attended the meeting, as did the United States, Canada, Japan, South Korea, New Zealand and Australia.
At the opening speech, Hawke explained with the cape aimed at the European Union, the EU, that one reason for the formation of APEC was to prevent the world from being divided into “defensive trade blocs”. That APEC does not intend to become a new protectionist EU, the members have clarified on several occasions since then.
The need to find more efficient and organized forms of the sharp increase in trade between North America and East Asia over the past two decades drove the organization’s formation. For the United States, it was important to try to remedy the growing deficit in trade, mainly with China and Japan. It also sought to reach agreement on the ongoing negotiations on freer world trade within the Uruguay Round of the GATT (the General Agreement on Tariffs and Trade, which was replaced in 1995 by the World Trade Organization, WTO). It was hoped that the tough negotiations would be facilitated if the Pacific countries agreed on a common line.
The United States argued early on to link the major Asian economies – China, Taiwan and Hong Kong – to the organization and give it a firmer shape. However, the ASEAN countries were skeptical of attempts to strengthen APEC; they were partly afraid of undermining ASEAN’s position in the region, and partly worried about the idea that the USA would further consolidate its influence.
In an attempt to find a counterpoint to American influence, Malaysia in 1991 took the initiative to form a new economic organization without the United States as well as Canada, Australia and New Zealand. The United States considered that the initiative threatened to split APEC and therefore launched an intensive counter-campaign in which both Japan and South Korea were exposed to strong pressure not to participate. An East Asian Economic Caucus was nevertheless formed in 1994, but it did not become the significant force that Malaysia had envisioned, but stayed with a group within APEC.
When APEC members eventually agreed to allow new members, China, Hong Kong and Taiwan joined the organization. The ministerial meeting in the South Korean capital, Seoul, in 1991 was attended by the three new members. However, Taiwan and Hong Kong (then another British crown colony, returned to China in 1997) did not have the same status as China, which was a prerequisite for the Chinese to approve their presence. Taiwan joins APEC under the name Chinese Taipei, the name of the island in China, and was also only given the right to send lower-ranking officials to APEC ministerial meetings. In 1993, Mexico and Papua New Guinea became members of APEC and in 1994 the membership was further expanded when Chile was also adopted. In 1998, Peru, Russia and Vietnam were also admitted to APEC.
According to shoppingpicks, APEC gained a firmer structure through the decision to set up a permanent secretariat at the 1992 ministerial meeting in Bangkok. However, plans for free trade cooperation progressed at a slower pace. At the Seattle meeting, many of the Asian countries were hesitant about the expert group’s proposal to introduce a free trade area in the Pacific region as early as 1996. But they agreed on a more general wording in which they expressed their desire to work for freer trade in the region. At the 1994 summit in Bogor, Indonesia, the APEC countries decided to form a free trade area by 2020; the more industrialized countries would have liberalized their trade as early as 2010.
At the Osaka ministerial meeting in Japan in 1995, the APEC countries took another step towards a free trade zone after agreeing on an action plan for trade liberalization. However, the negotiations stalled for a long time because the countries had different views, mainly in the field of agriculture. Japan, China, South Korea and Taiwan were reluctant to allow foreign competition into their agricultural markets while large exporters of agricultural products – such as Australia, the United States, Canada and New Zealand – refused to allow exemptions. The lock-in only eased after a compromise was reached, which in short was based on the countries liberalizing at their own pace until a certain end date. However, at the Philippines’ ministerial meeting in November 1996, each member could present an individual action plan.
At the Manila Summit in November 1996, the Ministers of Economy decided that tariffs and other barriers to trade in information technology would be removed from the year 2000. When the Ministers met the following year in Vancouver, Canada, the major topic of discussion was the economic and financial crisis. It was also agreed to speed up the liberalization of trade on a voluntary basis, so-called Early voluntary sectoral liberalization, EVSL, in certain areas, including the fisheries sector, wood products, medical equipment, toys.
At the meeting in the Malaysian capital Kuala Lumpur the following year, Japan refused to agree to reduced tariffs in the forest and fisheries sectors, which caused negotiations on reduced tariffs in the various EVSL areas to stall. It ended with the APEC members handing over the customs negotiations to the World Trade Organization, WTO. The work within the EVSL project was instead concentrated on reducing other types of barriers to trade as well as on economic and technical cooperation.