Launching APEC 1989

The Asia-Pacific Economic Cooperation (APEC) forum was launched in November 1989.  Ministers from twelve regional economies gathered in Canberra to commence effective consultations among the region’s decision-makers in order to:

• help strengthen the multilateral trading system;
• assess prospects for voluntary cooperation to reduce impediments to trade and investment in the region; and
• identify, then pursue shared economic interests.

By the third meeting of Ministers, it was possible to set out the guiding principles for APEC in the Seoul APEC declaration, to find a way to include the three Chinese economies (PRC, Chinese Taipei and Hong Kong and to prepare annual meetings of APEC economic leaders.

The first of those Economic Leaders’ Meetings took place three decades ago, in November 1993, hosted by the Clinton administration on Blake Island near Seattle. A year later, the “Bogor Goals,” APEC’s foundational goals of free and open trade and investment in the Asia-Pacific by 2010 for industrialized economies and by 2020 for developing economies, were adopted at the leaders’ meeting in Bogor, Indonesia.

This November, with the APEC leaders convening in San Francisco and issuing their Golden Gate Declaration, it is worth recognizing the distance traveled by APEC over the past thirty years and more. APEC anchored China’s external liberalization program in the 1990s, with Beijing committing to 50 per cent tariff cuts at the 1995 summit in Osaka on the way to its WTO accession, and APEC today reciprocally is anchored by China’s meteoric international economic rise. In the mid-1990s, APEC helped frame the Information Technology Agreement (ITA) at the onset of the digital age and today APEC countries constitute the world’s most dynamic and interconnected regional economic area for IT and digital products. At the onset of the COVID-19 pandemic, APEC played a key role in supporting supply chains for essential goods and services. And going forward, APEC will be key to realizing the ‘green transition’ by making the Asia-Pacific region the most dynamic and interconnected regional economic area for the production and trade in environmental goods and services.  

It is a testament to APEC’s longevity as well as to its singularity that even as the “Bogor Goals” have given way to the Putrajaya Vision 2040, APEC remains the only regional economic framework in the Indo-Pacific to count the United States and China as its members. As the Australian economist and thinker and the key intellectual architect of APEC, Peter Drysdale, has memorably observed, “the United States and China both have skin in the APEC game … the setting in which they must deal is multilateral and their dealing are on full display to all other 19 members.”  

APEC’s longevity and durability can be ascribed in very significant measure – not just to its vision and ideals but also – to the malleability inherent in its founding design.

APEC’s intellectual architects were sensitive to the region’s economic, cultural and ideological diversity. They knew a one-size-fits-all framework would not suffice. They proposed a variable geometry of step-by-step but sustained approaches to cooperation that deferred to local sensibilities.

APEC’s intellectual architects were keen to ensure that the institutional agenda should not be dominated by the largest members, nor should it crowd out existing forums such as ASEAN. They devised a framework which eschewed binding obligations in favor of one without compulsory elements and where every cooperative liberalization flowed from a common and conscious interest – nudged on, no doubt, by peer pressure. In time, this would come to be known as ‘concerted liberalization’.

APEC’s intellectual architects were aware that some of the regional actors at the time did not enjoy diplomatic relations. With ingenuity, they sidestepped this dilemma by framing their envisaged body as a club of regional economies – not one of regional states. To this day, the APEC summit meeting is an economic leaders’ meeting. The idea had the added virtue of bringing Hong Kong and Taiwan creatively into the fold.

And, foremost, APEC’s intellectual architects were sensitive to the imperative that any region-wide preferential trading arrangement should complement and strengthen – and not serve as a substitute to – the open, non-discriminatory multilateral trading system. ‘Open regionalism’, a concept coined and championed at the Pacific Community seminar that laid the foundations of APEC in 1980, has since come to be known, praised and admired widely.

In sum, the institutional edifice visualized by APEC’s intellectual architects was crafted in the image of the Asia-Pacific region, and its colors tied to the mast of trade multilateralism. The depth of conception was stunning and, as a consequence, APEC continues to deliver even today, three decades later. So long as the decisive weight of a majority of the Asia-Pacific’s economies is in favor of trade and investment liberalization, APEC will continue to remain a prominent feature of the region’s landscape.      

This report is a first-hand account of one of the senior officials ‘present at the creation’ of APEC in Canberra in November 1989 (the first Economic Leaders’ Meeting was still four years away). Andrew Elek was an Australian government official who served as the chair of senior officials. He worked closely with Foreign Affairs Minister Gareth Evans and Secretary Dick Woolcott.  First, to shape the APEC concept, then conduct a year of intense diplomacy.  That led to a successful meeting of senior officials in September, then the ministerial-level meeting in November.

This is his personal account. It is also a riveting one of the delicate task of broaching and obtaining buy-in for the APEC concept, first from the Australian government itself, then from a broad set of the Asia-Pacific’s powerful sovereign actors on terms that hewed to the vision and founding design of APEC’s intellectual architects. For those inclined to savor a taste of history, there is even a cameo appearance by Premier Li Peng at the peak of the Tiananmen protests.

Our thanks go out to Andrew for compiling this fascinating record of events leading to the creation of APEC in 1989.

Buckle up and enjoy the ride.

– Sourabh Gupta
Senior Fellow, Institute for China-America Studies