Going where no Apec has gone before

By JOHN ARMSTRONG in Shanghai

We have seen it all so many times before. Apec leaders emerge from their talks wearing silly costumes - this year they looked like overdressed mandarins in an amateur production of The Mikado - and release a communique laced with "commitments" they have little intention of fulfilling.

Like Groundhog Day, they come back the following year and do it all again. In a way, it doesn't matter too much. Apec's informality has been its strength.

Presidents and prime ministers from 21 Asian and Pacific Rim countries - big and small - spend three days rubbing shoulders and discussing problems under the umbrella of a rather unwieldy economic forum.

This year, Helen Clark had her first get-to-know-you meeting with Indonesia's new President, Megawati Sukarnoputri. The Prime Minister scored hard-to-get chats with United States President George W. Bush and Secretary of State Colin Powell.

The President also met Russia's Vladimir Putin for the third time in five months. Bush and China's Jiang Zemin put to one side chasm-like differences over Taiwan and the Hainan Island spy-plane incident to present a united front against global terrorism.

Because progress requires consensus, Apec is a bit like a glacier. Movement is usually slow; some years it advances, in others it retreats. But this year's summit in Shanghai marked a definite advance - and not simply because of the events of September 11.

As hosts, the Chinese, about to become members of the World Trade Organisation and wishing to flex their superpower muscle, were always going to give Apec's trade and economic agenda more grunt, compared with little Brunei last year.

The outcome is the Shanghai Accord - an appendix to the main communique which is described as a "roadmap" to Apec's longstanding goals of free trade and investment in the region by 2010 for developed economies and by 2020 for developing economies.

The accord aims to strengthen Apec's "implementation mechanisms" to check members' progress towards those goals. The leaders also agreed to undertake a stocktake in 2005 to review progress.

"A lot of countries are making a lot of commitments but as 2010 draws closer, some aren't getting any closer to those commitments," Helen Clark said after the summit wound up on Sunday. "A new process of checking people are doing what they say they'll do is going to be important."

But some economies may want closer cooperation between one another even sooner.

The Prime Minister envisages a European Union-style approach that would allow members to "opt in" to Apec initiatives when they felt their economies were ready.

Of more pressing urgency, this year's meeting came against the backdrop of the slowdown in the US economy, particularly in high-tech industries, which are big markets for Asian-manufactured components.

The fear of deepening recession has intensified since the terrorist attacks on New York and Washington. Apec delegates had only to read the litany of job layoffs across the region in each edition of the Asian Wall Street Journal popped under their hotel room doors.

Failure by Apec leaders, who represent two-thirds of the global economy, to reaffirm the 13-year-old organisation's goal of free trade across the region by 2020 would have further weakened already shaky business confidence.

Even Japan, which has dragged the protectionist chain, acknowledged the need to break down global trade barriers to jump-start world growth.

At the same time, Apec is finally listening to the likes of Malaysia and is placing renewed emphasis on helping developing countries trade from a position of strength, rather than becoming victims of globalisation.

This year's communique contains some of the strongest language yet in support of further trade liberalisation - good news for export-dependent New Zealand, which already has low tariffs.

Failure to reaffirm a more open multilateral trading system would also have sent an awful signal before the big World Trade Organisation meeting in Qatar next month.

That meeting is supposed to be the starting point for a new round of global trade negotiations - and officials are quietly confident there is now enough consensus for that to happen.

It has to. The last attempt to kick off a new round, in Seattle in late 1999, collapsed amid acrimony among conference delegates inside the venue and violent anti-globalisation protests outside. Another flop, as US Trade Representative Robert Zoellick acknowledged this week, is unthinkable.

It was also unthinkable that Apec leaders could ignore the straight diplomatic implications of the terrorist attacks on the US.

But Apec is an economic forum - members are "economies", not countries. Until now, it has kept political issues off its formal agenda because of Asian sensitivities about interference in domestic affairs.

The violence in East Timor that coincided with the Auckland summit in 1999 was treated strictly as an off-agenda item.

The Chinese, for example, were worried the pressure placed on the Indonesians at that meeting to allow the United Nations to enter East Timor might one day be repeated with regard to Tibet.

In contrast, Apec leaders formally discussed counter-terrorism measures in Shanghai - but under the pretext of the economic impact of the September 11 attacks. They issued a declaration on counter-terrorism - but kept it separate from the end-of-summit communique.

It was not difficult for members to "unequivocally condemn" terrorism, while ducking taking a position on the military strikes on Afghanistan. Indonesia, for example, could not be expected to endorse military action against fellow Muslims, but is grappling with separatist movements which it might brand as "terrorist".

Still, the special declaration is a precedent for Apec and implores members to carry out anti-terrorist measures, from ratifying United Nations conventions halting the flow of funds to terrorist networks such as Osama bin Laden's al Qaeda to bolstering airline security.

Progress will be monitored at Apec's finance and transport ministers' meetings next year in the lead-up to the next summit in Mexico.

With two summits under her belt, Helen Clark believes Apec is changing and that the strict economic focus was always too narrow.

"Economics occurs in a context," she said. "That terrorism was able to be dealt with in a mature fashion suggests other important issues will be able to be debated without acrimony.

"That will see the organisation go in directions perhaps not envisaged when it began."

Full coverage: Apec 2001

Apec China 2001 official site