Cooperation Under Diversity: The Emergence of Asia-Pacific Economic Cooperation (APEC) 1989-1995

Abstract

The dramatic economic growth of the Asia-Pacific region during the 1980s has led many to predict that the 21st Century will be a 'Pacific Century'. Consequently, there has been growing official and academic interest in the efforts of eighteen Pacific Rim countries in establishing regional economic cooperation through the Asia-Pacific Economic Cooperation (APEC) process. While much of the focus of APEC's activities has been directed towards meeting the challenges of increased interdependence and sustaining the region's economic growth, this paper argues that a number of intraregional and international factors have exercised considerable influence over the definition and institutional framework of that regional economic cooperation. Importantly, APEC has emerged as a result of the pluralisation of leadership in a post-hegemonic system. With neither America or Japan willing, or able to mobilise their resources to provide leadership, the importance of alternative leadership skills has increased. Such leadership, based not, upon structural power, but upon the ability to provide the ideas underpinning cooperation, or to broker agreements amongst large numbers of players, has allowed smaller states, such as Australia and Malaysia, as well as nongovernmental organisations, such as the Pacific Economic Cooperation Council (PECC), to play a greater role in the provision of leadership and cooperation. The decline in US leadership was also accompanied by a weakening of the liberal trading system, as evidenced by the Uruguay Round stalemate during the late 1980s. Despite their economic growth, the region's principle markets remain the major developed economies, and as a result, the Asia-Pacific region is dependent upon a continuation of an open trading system. By ensuring consistency of principles and norms with the wider General Agreement on Tariffs and Trade (GATT) regime, and allowing the region's economies to present a strong, unified voice in support of liberalism, APEC has served to reinforce the liberal trade system. But while these international features have increased the need for, and have shaped the institutional development of regional cooperation, the political and economic diversity of APEC's membership has left an indelible mark upon the character of Asia-Pacific cooperation. This has led to a regime, based not upon formal, contractual institutions, but upon an informal processes of dialogue and consensual decision-making. This paper will argue that while APEC has the potential to transform states' expectations, thereby facilitating the emergence of stable and effective cooperation (as anticipated by the neo-liberal perspective), attempts to accommodate the diversity of APEC's members may allow some states, motivated by more realist-based concerns of short-term gain, to undermine the APEC process, slowing the advent of the Pacific Century.