Asia-Pacific Economic Cooperation

• 1. Introduction

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  Asia-Pacific Economic Cooperation began in a city most people associate with beaches and barbecues rather than diplomacy. In November 1989, ministers from twelve countries gathered in Canberra, Australia, for what would become one of the most consequential economic gatherings in modern history. The Australian Foreign Affairs Minister Gareth Evans chaired that first meeting, which wrapped up with a commitment to hold future annual sessions in Singapore and South Korea. The questions that followed were big ones. Could an organization that included both wealthy industrial nations and rapidly developing economies actually agree on anything? Could it hold together through financial crises, geopolitical tensions, and even terrorist plots? And what exactly happens when the world's most powerful heads of government are asked to put on grass skirts?

• 2. Bob Hawke's Pacific Vision

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  Australian Prime Minister Bob Hawke made the call in January 1989. He urged more effective economic cooperation across the Pacific Rim, and the idea caught fire in large part because of what had already been working in the region. The Association of Southeast Asian Nations had been running a series of post-ministerial conferences since the mid-1980s, and by 1986 those gatherings had grown to include twelve members. Hawke studied those results and concluded that a similar but wider approach could work across the entire Pacific. The organization he helped bring into being was initially conceived as an Australian initiative to secure greater Japanese engagement in the region. It quickly evolved into something more contested. From the start, a dynamic tension ran through APEC between members who wanted a structured trade agreement and those, like the United States, who preferred a looser, more consultative arrangement. That tension never fully resolved, and in many ways it shaped every summit that followed.

• 3. The Bogor Goals

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  Indonesian President Suharto hosted the 1994 Leaders' Meeting in Bogor, and what came out of it set the ambition level for the next three decades. APEC leaders adopted what became known as the Bogor Goals: free and open trade and investment across the Asia-Pacific by 2010 for industrialised economies, and by 2020 for developing ones. The targets were striking for how specifically they divided the membership into two tracks based on development status. The following year, at the November 1995 Ministerial Meeting in Osaka, Japan, APEC agreed to establish the APEC Business Advisory Council, a body composed of three business executives from each member economy. That council began operations in 1996 and became the only non-governmental organisation with a formal place on the agenda of the Economic Leaders' Meeting. The Bogor Goals also gave rise to a World Bank research brief in 2008 arguing that transparency in the region's trading system was critical if APEC had any chance of hitting its targets.

• 4. Who Actually Gets to Join

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  APEC's membership rule is stranger than it sounds. The criterion is not sovereignty but independent economic status. That single distinction allowed the forum to include Taiwan, which participates under the name Chinese Taipei, alongside the People's Republic of China. Hong Kong joined as a British colony and remained a member after becoming a Special Administrative Region of China. The practical effect is that APEC uses the phrase member economies rather than member countries throughout all its official documents. India has requested membership and received initial support from the United States, South Korea, Australia, and Papua New Guinea. Officials decided against admitting India on the grounds that it does not border the Pacific Ocean, which all current members do. India was invited to attend as an observer for the first time in November 2011. Colombia applied as early as 1995, but the organization stopped accepting new members from 1993 to 1996; that moratorium was then extended to 2007 because of the 1997 Asian financial crisis, and extended again to 2010.

• 5. Summits, Security, and Satire

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  The 1997 meeting in Vancouver sparked controversy when officers of the Royal Canadian Mounted Police used pepper spray against protesters who objected to the presence of Indonesian President Suharto. In August 2003, Thai police arrested Jemaah Islamiah leader Riduan Isamuddin in the city of Ayutthaya before he could complete planning for an attack on the APEC Leaders' Meeting in Bangkok. The Sydney summit in 2007 deployed airborne sharpshooters and extensive steel-and-concrete barricades against anticipated threats. Despite all of it, the security envelope was penetrated with ease by a spoof diplomatic motorcade organized by members of the Australian television programme The Chaser, one of whom was dressed to resemble Osama bin Laden. The 2019 summit in Chile never happened at all; it was cancelled because of ongoing protests over inequality, the cost of living, and police repression. And the 2020 meeting in Kuala Lumpur was held entirely online.

• 6. The Costume Tradition

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  Bill Clinton started something in 1993 that world leaders have been debating ever since. At the first APEC Economic Leaders' Meeting on Blake Island, Clinton insisted on informal attire and handed out leather bomber jackets. The tradition of dressing in the host nation's national costume took hold from there, though not without friction. At the 2010 meeting, Japan had leaders wear smart casual rather than traditional kimono. Barack Obama, who was hosting in Honolulu in 2011, initially joked about flowered shirts and grass skirts. After reviewing previous photos and weighing the optics during a period of economic austerity, he decided it might be time to end the tradition. Leaders received a specially designed aloha shirt as a gift but were not required to wear it. The costume tradition outlasted his hesitation. Leaders at the 2013 Bali conference wore batik outfits; in Beijing in 2014 they wore Tang suit jackets; in the Philippines in 2015 they wore barong tagalogs; in Peru in 2016 they wore vicuna wool shawls; and in Vietnam in 2017 they wore Vietnamese silk shirts.

• 7. The Free Trade Area Dream

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  The idea of a Free Trade Area of the Asia-Pacific predates APEC itself. A Japanese economist proposed a Pacific Free Trade agreement as far back as 1966. That proposal gained little traction but eventually fed into the Pacific Trade and Development Conference, then the Pacific Economic Cooperation Council in 1980, and ultimately APEC. APEC formally began discussing what it called the FTAAP at its 2006 summit in Hanoi, partly because the Doha round of World Trade Organization negotiations had stalled and partly to address what economists called the noodle bowl effect: by 2007 there were approximately 60 free trade agreements already in force across Southeast Asia and the Asia-Pacific, with another 117 in negotiation, creating overlapping and conflicting obligations. By 2012, ASEAN-plus-six countries alone had 339 free trade agreements, many of them bilateral. At the 2014 APEC summit in Beijing, leaders agreed to launch a collective strategic study on the FTAAP and instructed officials to consult stakeholders and report back by the end of 2016. The Trans-Pacific Partnership, which did not include China or Russia, represented one competing path forward; the Regional Comprehensive Economic Partnership, negotiated by ASEAN and existing free-trade-agreement partners and not officially including Russia, represented another. Both were on the table simultaneously at the Beijing summit, alongside the FTAAP proposal, with President Obama hosting a TPP meeting at the US Embassy in Beijing before the APEC gathering even began.