But oh, what a guest list. President Clinton will be there, as will Chinese leader Jiang Zemin, ensuring that the real work this year will be political. The Clinton-Jiang meeting will likely touch on everything from China’s admission into the World Trade Organization to heightened tensions over Taiwan and the NATO bombing of Beijing’s embassy in Belgrade. U.S. agreement to China’s entry into the WTO would be a huge boost ahead of the world trade summit in Seattle on Nov. 30. “Will there be a breakthrough?” asks Bob Broadfoot, managing director of Hong Kong-based Political and Economic Risk Consultancy. “That’s far and away the most important issue.”
But it’s not on the official agenda, and so it only accentuates growing criticism that APEC has become a largely irrelevant sideshow to the WTO. APEC was founded in 1989, when Asia was a place of miracles, but much has changed in the decade since. Japan’s stock market is still worth less than half its peak at the end of 1989, and much of the rest of the region is still trying to recover from the financial turmoil that began in the summer of 1997. Even now, with the South Korean and Thai economies expected to grow this year and Japan’s economy showing signs of life, the International Monetary Fund warns that Asia’s recovery is “precarious.”
You’d think that the Asian crisis might have given APEC a sense of mission. But think again. The leaders are likely to avoid ideological lectures on development that have stirred East-West tensions at previous meetings. MIT economist Paul Krugman recently declared APEC “an empty shell,” and even APEC’s own Business Advisory Council delivered a harsh assessment just last month. “APEC has at times lost sight of its own goals,” the business executives charged, noting that member countries had been sluggish in pursuing free trade and investment.
On specific, substantive issues–like liberalization of sectors including food and autos–APEC has foisted responsibility on the WTO. That’s partly because the WTO makes binding decisions on trade issues, while APEC “is not an organization really structured for action,” says Charles E. Morrison, president of the East-West Center in Hawaii. Unlike the European Union, which makes majority decisions, APEC is a much looser grouping that adopts nonbinding measures.
The need for consensus makes it even harder to expect anything dazzling from Auckland. APEC leaders might endorse financial transparency and more efficient investment, and they’ll try to agree on priorities for the upcoming WTO ministerial talks. In back rooms, meanwhile, the same leaders will discuss North Korea, which has recently threatened to test-fire its long-range Taepodong II missile, and Taiwan, which infuriated Beijing in July by inching toward a declaration of independence. Everyone will look to the Clinton-Jiang summit, in particular, for a political climax. (“The troubled waters have calmed,” says National Security Council spokesman Mike Hammer, who says China will have to take the initiative on WTO entry.) But if those talks fizzle, what then? Bored officials can always turn their attention to New Zealand’s 36,000 flocks of sheep–and rest up for the meatier WTO conference in November.