Asia-Pacific Economic Cooperation

The Asia-Pacific Economic Cooperation (APEC) is a multilateral economic organization. It aims to enhance economic cooperation among its member states and, in particular, to improve trade and facilitate investment throughout the Asia-Pacific region. Its twenty-one members are Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, the Republic of Korea, Malaysia, Mexico, New Zealand, New Guinea, Peru, Philippines, Russia, Singapore, Taipei, Thailand, United States, and Vietnam. Collectively these states control some 47 percent of world trade and create some 60 percent of world gross domestic product.

APEC was formed in 1989, and its secretariat (administrative branch) was established in 1992. The creation of APEC was controversial. Critics argued that the Asia-Pacific was already the most economically advanced region in the world and that the creation of APEC would further increase its dominance to the detriment of other parts of the global economy. Supporters claimed that the creation of APEC would help renew economic alliances between the United States and East Asia following their fracturing during World War II and the Cold War.

Many commentators describe APEC as one of the trading groups that constitute a new pattern of regional governance in the international economy. Yet APEC differs from many similar bodies, such as the Association of Southeast Asian Nations, in that it relies on nonbinding commitments rather than obligations established by formal treaty. Some commentators have described this voluntary and consensual approach as a kind of open regionalism. Critics argue that APEC and its policies are thus ineffectual and irrelevant. They have even described it as “transregionalism without a cause” and suggested that it lacks the institutional basis needed to be a major economic grouping and to implement and enforce its policies. In contrast, APEC's supporters argue that a loose confederation is sufficient to accomplish its goals, especially the Bogor Goals for Free and Open Trade and [Page 31]Investment, which require the removal of trade barriers by 2010 for industrialized member states and by 2020 for poorer or developing countries.