Tuesday, August 16 2022 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
20 YEARS ON, BEIJING REVISITS BOGOR IDEALS
THE China initiative for a Free Trade Zone for Asia-Pacific reinvents the APEC Bogor Declaration of 20 years ago – and that went simply nowhere . . .
BEIJING - China has asserted its will and the leaders of APEC nations have acquiesced - APEC will explore Beijing’s initiative to pursue a free trade initiative among its 21 nation members, including the United States, which reportedly was against the idea pre-summit.
It is a measure of Beijing’s growing clout on the global stage - and, simultaneously, a reflection of the weakening authority of Washington.
But what has not been explained is just how the hoped-for Free Trade Area for the Asia Pacific (FTAAP) is different from the so-called Bogor Declaration, similarly announced with much fanfare after the 1994 APEC leaders’ summit in Bali – 20 years ago.
Then, APEC leaders agreed to common goals of free and open trade and investment by 2010 for industrialised economies, and by 2020 for developing economies.
They also agreed to pursue these targets, known as the Bogor Goals, by reducing barriers to trade and investment to promote the free flow of goods, services and capital among APEC economies.
The Bogor Goals were to reflect the shared belief that free and open trade and investment was essential to realise the region's growth potential and to enhance economic and social outcomes for all APEC economies.
Not much has been mentioned of the Bogor Goals in the intervening 20 years because APEC started to drift, its energy sapped by competing interests and priorities distracted by other global issues.
Whether Beijing is able to shepherd the disparate membership of APEC into eventually negotiating an agreed FTAAP will be a real test of China’s diplomatic skills.
If the commentariat chatter is to be believed, Beijing had been smarting because it was being overlooked by the US in its proposed Trans Pacific Trade Agreement (TPP), which aims to establish 21st century “gold standards” for a trade agreement.
TPP has exacting demands on intellectual property, labour laws and investment rules, among other things.
As Asian scholars and analysts have noted, TPP requires rules which even developing countries find hard to agree to. The less demanding rules expected of a Regional Comprehensive Economic Partnership (RCEP) - China’s response to TPP - are more acceptable to most potential participants.
As ASEAN has claim to ownership of a proposed Regional Comprehensive Economic Partnership (RCEP), the reality is that ASEAN wants to drive the RCEP agenda. This does not necessarily suit China.
One hears motherhood statements on the benefits of free trade, but the harsh truth is that countries are only interested in opening up selectively. No country – and we include the US and China – truthfully practices what it preaches in trade matters, wanting to be able to pick and choose what benefits them best.
Still, the fact that China has been able to pull off an agreement at APEC to initiate a “collective strategic study” may well be more than a face-saving gesture for the host.
The atmospherics in Beijing at the 2014 APEC Summit were a far cry from the very first APEC leaders’ summit, initiated by then-US President Bill Clinton and held in wet and windy Seattle in 1993.
The world was different then – full of hope and optimism. It was before the Asian Financial Crisis of 1997-98 and the global financial crisis 10 years later – the first damaged Asia, the second robbed the developed world of its vitality.
In 1993, the US was still undisputed global trade leader. China, like all other APEC members, relied on US consumers to buy its products and keep its factories humming.
China was an emerging economy – itself full of promise and hope. But as early as 1993, there came a hint of assertiveness from China’s then-leader, Jiang Zemin, as he addressed the summit in English.
Since then, of course, China has surged ahead, overtaking Japan as the second-largest economy in the world. In 2014, the US may still be the leader – but China is nipping at its heels, impatient to share the US mantle on the global stage.
Scanning through Chinese media during the APEC summit, the tone of editorials and reports by Chinese journalists was unmistakable – China was entitled to an equal say with the US in global affairs.
Apart from its APEC initiative, Beijing has, in recent times, unveiled its vision for the development of a modern silk road to open up Central Asia. And it is pushing its contentious Asian Infrastructure Investment Bank concept.
Clearly, the rules of the game have changed. And APEC members know it is time to play ball according to the new rules. Commenting to Singapore media on the FTAAP, Singapore’s Prime Minister Lee Hsien Loong described it “a significant move forward”.
“I think the time is right for us to take another step forward. And I think the Chinese have done us a favour by making this move,” Lee said, while also pointing out that FTAAP is not a Chinese idea, but was “the reason we created APEC back in 1989”.
Support for the China trade initiative among some other players is more muted - they are grappling with their own domestic issues.
APEC deliberations on China’s FTAAP could well go the way of the 1994 Bogor Goals, unless of course, China can persuade fellow APEC members to come to its party.
Florence Chong is Editor of ATI Magazine