Why APEC should be opposed


By Reihana Mohideen and Sonny Melencio

The Asia Pacific Economic Cooperation (APEC) summit will be held in the Philippines in November, at Subic Bay, once an infamous US military base and symbol of US domination of the country. Since the push began, primarily from the Australian and the US governments, to formalise APEC into a regional trade bloc, the region's NGOs have attempted to work out their response to APEC.

The strategy adopted by NGOs at a 1995 conference in Osaka has been described as "engagement without legitimisation". This tries to combine two contradictory objectives — "putting efforts into lobbying the official process to change this single minded focus on [trade] liberalisation", and trying to "avoid doing anything to legitimise the process".

A document produced by the Philippines NGOs hosting a forum in Manila argues that there are "certain spaces within the APEC and in parallel international agreements that NGOs and people's organisations can tap" and that the popular movement "can use these spaces ... to forward the rights and status of their communities and constituencies within the APEC". One such "space" is supposedly the identification of sustainable growth, equitable development and national stability as the "three pillars of APEC" contained in the Bogor Declaration of the APEC summit held in Indonesia in 1994.

How will this "engagement" take place? It ranges from lobbying to actual participation in the forums.

The strongest advocates for this strategy at Osaka were delegates from the US and Australia — the two countries with the most to gain out of APEC.

Lyuba Zarsky from the Nautilus Institute for Security and Sustainable Development, USA, argues that because APEC is "relatively young and flexible" there is an opportunity "to build people's concerns into APEC's very foundation". According to Ross Daniels from Amnesty International, Australia, "We would strongly advocate that within APEC there is a debate on central values to be had".

There have been attempts already by the region's NGOs to "engage" with APEC, and the experiences so far indicate that APEC is anything but "young and flexible". Japanese NGOs had discussions with the Ministry of Foreign Affairs and demanded a space at the press centre organised for the official meeting; their demand, hardly very radical, was refused. In Indonesia a room reservation at a hotel for a press conference organised by the NGOs was mysteriously cancelled — by the Indonesian government, no doubt.

What is APEC?

APEC has been described as one of the main emerging institutions for economic "liberalisation" (opening up of the economy under the philosophy of "free" trade) in the Asia-Pacific region. One its main purposes, pursued by the imperialist powers, is to reduce barriers to trade. So APEC is an attempt to fast-track GATT's trade liberalisation agenda in the region.

The APEC summit in 1993 was convened in Seattle under the auspices of the US. It was here that the idea of a regional trade bloc was launched — a position strongly pushed by the US and Australia.

At the second summit in Indonesia in 1994, the "Bogor Declaration" called for the implementation of free trade and investment by 2010 for developed countries and 2020 for "developing" countries. The Indonesian summit also affirmed the full participation of the APEC countries in the World Trade Organisation (WTO) and in advancing the processes and agreements of the GATT-Uruguay Round (GATT-UR).

The Osaka summit in 1995 focused on an "action agenda" which detailed the ways to implement the Bogor Agreement. The summit called on APEC countries to accelerate the implementation of GATT-UR commitments.

At the Manila summit in November, governments are expected to present their "action" plans for implementing APEC agreements starting in 1997.

According to Jane Kelsey, a New Zealand analyst and well-known critic of the neo-liberal agenda, while acceptance of the APEC declarations would be "voluntary" they are "backed by a familiar element of coercion". APEC acknowledges the role of the IMF and the Asia Development Bank, for example, "in influencing investment rules in both home and host countries."

Role of the US

The APEC agenda is very much dominated by the US. By the early 1980s, US policy towards the successful east Asian economies started to change from that of the Cold War years, when political considerations drove it to develop an economic buffer zone against China, North Korea and Vietnam. The east Asian economies got a "free ride" with economic growth being bolstered by massive US aid, preferential access to markets and military assistance.

In the early '80s, this relationship started to change. Already facing stiff competition from Japan, the US was not going to allow the new east Asian competitors to follow the Japanese path.

Countries such as South Korea came under intense pressure. As a result, the US trade balance with South Korea was changed from a US$9.5 billion deficit in 1987 to a surplus of around US$335 million in 1991.

The South Koreans were forced to appreciate their currency, which between 1986 and 1989 gained over 40%. In 1989 South Korea, Taiwan, Singapore and Hong Kong were knocked off the list of countries eligible for preferential tariff treatment.

In May 1989 South Korea agreed to liberalise its foreign investment regulations (even health inspection regulations were denounced by the US as imposing trade barriers). By January 1992, 98% of industrial areas and 62% of service areas had been opened to foreign investment.

South Korea was also forced to open its agricultural markets and has now become the third largest importer of US agricultural products. On a per capita basis, South Koreans consume more US farm products than any other nation.

Taiwan was also forced to revalue its currency. Taiwanese goods were subject to additional duties on US markets on anti-dumping grounds, and tight restrictions were imposed on electronic goods and garment and textile imports from Taiwan. Thailand was also threatened with US trade retaliation.

Since the early '80s such unilateral pressure has been a key element of US strategy to gain access to these markets. But the US has also pursued multilateral and regional strategies such as GATT and NAFTA.

In fact, the threat of unilateral sanctions was used to get countries to agree to the GATT provisions. Some of the GATT provisions are particularly targeted at the newly industrialising countries in Asia. The General Agreement on Trade in Services (GATS) institutionalised the principle that foreign service providers be given the same treatment as local providers. This proved to be particularly effective in opening up telecommunications, insurance and the banking sectors.

The Trade Related Investment Measures (TRIMs) under GATT illegalised local content regulations and investment rules (which tie the value of a foreign investor's imports of raw materials and components to the value of the exports of the finished products). Asian economies had been using these mechanisms to achieve partial industrialisation in some areas (such as Malaysia's venture with Mitsubishi in developing the Proton Saga car). The US and the EU pushed through the banning of these practices.


Japan has so far been the reluctant participant in APEC because it has already managed to penetrate the region's markets. Industrialisation in the region has been largely stimulated by Japanese investments — $US60 billion worth of investment from 1988 to 1993.

This industrialisation has been dependent and subordinate to the Japanese economy, and is based on capital and technology from Japan. According to Philippines analyst Waldon Bello, one of the primary reasons for this subordinate status is Japan's virtual monopoly of high technology, which enables it to export high value added products and import low value added goods.

According to Bello, "Instead of transferring state-of-the-art technologies, Japan transfers less advanced ones to integrate Korean and Taiwanese firms as subordinate partners within an Asia-Pacific wide division of labour designed by Japanese firms to enhance corporate profitability".

In 1993 for the first time, Japan's profits from Asia exceeded those of the US. This is quite an astonishing development considering that as recently as 1980 only 2% of Japan's corporate foreign profits originated in Asia.

The stagnation of the Japanese economy through the '90s has been an added factor in the "regionalisation" of its economy as companies try to escape from the higher labour costs at home.

So an informal trading bloc of sorts already exists, increasingly under the economic influence of Japan. The US intends to use APEC to wrest economic dominance in the Asia-Pacific region from Japan through a further opening up of markets. Thus APEC represents the intensification of economic rivalry between the major imperialist powers. This is the primary conflict within APEC and has also tended to cast a shadow over the viability of the project.


Australian capitalism's interests coincide with those of the US in APEC. Australian business is desperate for access to regional markets for its main exports — agriculture and minerals, but also increasingly for its elaborately processed manufactured goods. Agricultural products, minerals and processed foods (all of which Australian companies are highly competitive in) have traditionally faced high tariff and non-tariff barriers in Asia. The elimination of trade and investment barriers, particularly in agriculture, is Australia's main agenda.

The central aim of this push into Asia is privileged access to Indonesian markets — potentially the largest in ASEAN. While the total invested by Australia in Indonesia so far is rather modest, it is set to grow at a spectacular rate. In 1995 alone three major investment proposals in the chemical industry totalled more than $4 billion, compared to the sum total of $3 billion invested since 1967!

Getting privileged access to Indonesia's markets means currying favour with the Suharto dictatorship. This is euphemistically called "people to people contact" in Australian government and business circles. This relationship with the Indonesian dictatorship includes support for Indonesia's occupation of East Timor.

Cheap labour

For the south-east Asian economies, the hope of growth and development is based on production of cheap exports rather than the growth of the domestic market. Low labour costs are the cornerstone of this policy.

A study conducted by the workers organisation BMP (Filipino Workers' Solidarity) points out: "In the developed economies within APEC, competitiveness means raising further the levels of productivity of the working class while reducing benefits and dismantling the welfare system. In the developing economies, it means keeping lower wages and destroying agricultural and fishing communities to increase the labor market and further depress wages. In the global or regional economic restructuring pushed by APEC, there is no place for the economic improvement of the lot of the working class which can even be comparable to the period of economic growth of the world capitalist economy in the '60s and the early '70s. What the world is seeing now is 'growth' without employment, 'growth' in the midst of increasing unemployment and poverty in both the developed and the developing countries.

"To carry out APEC's agenda ultimately means the weakening of working class organisations. Right now, a series of counter-union measures are being adopted in each of the APEC member countries ..."

Referring to the position taken by the International Confederation of Free Trade Unions of supporting "social security nets" for labour within APEC's trade framework, the BMP study argues: "While the issue of 'social security nets' should be raised to protect the economic and organisational gains of the working class, the workers should raise the bigger issues regarding APEC: its entire agenda and its horrendous effects on the working class movement. Limiting one's campaign to 'social security nets' means accepting APEC's overriding philosophy while 'begging for crumbs' within the whole setup."

'Engaging' APEC?

The Philippines NGOs' position is driven by a certain pessimism based on the seeming inevitability of the project. As one NGO paper explains, "Like a 'tsunami' or a tidal wave, it will rush ahead anyway and the point is to create channels where the waters can go".

While the importance of trying to wrest concessions from a stronger enemy is undeniable, this cannot substitute for the overall aims of the movement. And in the process of attempting to win short-term concessions, the goals of the movement (opposition to APEC-style neo-liberal projects) must not be compromised.

In a debate at a recent NGO forum, some of the participants argued against rejection of the APEC processes because it would cut across the strategy of "engagement". There is a grim logic in this position. If your overall strategy is to engage in the process, how can you reject it, or even oppose it?

It may well be, given the conflicting imperialist agendas, that APEC may not survive. But its underlying economic agenda will be continued through other means and through institutions such as GATT, the WTO, the IMF and the World Bank. Does this mean we also call for "engagement" with these organisations? The view that we should is presented in the Philippine NGO document which "hopes" that a successful "engagement" strategy with APEC will have an "impact on ... GATT, WTO, the IMF-World Bank and the operations of transnational corporations across the globe".

Such a perspective is based on the hope that capitalism can be humanised, made palatable to the toiling majority of the world, by lobbying and debating within the system and with the ruling elite. It's a vain hope that capitalism's drive for profits at the expense of the majority and the expense of the environment can be changed through persuasion and debate.

The ultimate logic of this "hopefully engaging" strategy is to accept (even unwittingly) the framework, albeit somewhat reformed, of the neo-liberal economic agenda and the ideological tenets that accompany it.

The unfortunate truth is that sections of the former left have decided to work, to varying degrees, within this framework. A major factor here is the ideological crisis of the socialist movement since the collapse of the Soviet Union and eastern Europe.

According to the unrelenting ideological assault of the capitalist propaganda industry, these examples (along with the liberalisation of the Chinese and Vietnamese economies) prove that all you can do is surrender to the unbreakable laws of competitive capitalism. And in the Third World we are told that if we follow these laws we have the prospect of attaining 'NIChood'; otherwise, we become "basket cases".

And then there is cooption in the form of funding from agencies in the imperialist countries which comes with ideological strings attached. Even the World Bank and the IMF today make overtures to NGOs.

Opposing the APEC agenda does not mean arguing for a national development model of total self-sufficiency. This "vision" is still adhered to by political forces aligned with the pro-Maoist Communist Party of the Philippines, for example. This is an unrealistic perspective and has never been a genuinely socialist vision.

The socialist goal is development that benefits the majority — the workers and the poor. This can be achieved only through the collective harnessing, ownership and democratic planning of the world's resources.

The left has to base its strategy on the fact that an APEC-type agenda will inevitably give rise to the resistance of workers and the poor. The special challenge that presses upon us is to internationalise this resistance. In this, the working-class movement has to lead the way, through strengthening international solidarity and cooperation.

Mass resistance, organised into an effective anti-imperialist movement, can wrest the most concessions, slow down the imperialist agenda and eventually win.

Organisations such as the BMP are currently preparing their responses to APEC. They will hold a national gathering of some 2000 worker leaders during the official APEC summit, to formulate a platform of demands opposing APEC and the neo-liberal agenda that drives it. They will also be inviting an international delegation of workers' representatives to attend. One of the aims of the conference is to set up an international labour network. The conference will be held in Manila from November 21 to 23.

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