HONOLULU (Oct. 17) -- The Asia-Pacific Economic Cooperation meeting next week in Bangkok will be looking at ways to revitalize the APEC process and make it more relevant to APEC leaders.
The meeting in Thailand marks the 10th anniversary of APEC leader gatherings. "For leaders, however, much of the focus is on bilateral side meetings with each other rather than the APEC agenda itself," says Charles E. Morrison, president of the East-West Center and a specialist on economic and security issues in Asia. "There is concern that APEC has become too much like a ritual rather than addressing the issues of real concern to leaders."
Morrison expects the leaders to call for an organizational review. Ideas that have been put forth, he says, include bringing political and security affairs more directly into the APEC agenda; and greater separation of the leaders meeting from the ministerial meetings, which can be the final approval process for the more technical issues being addressed by APEC committees and working groups. That could provide more free discussion time for leaders.
Another issue to watch for is whether APEC can play a positive role in helping put the Doha Round of multilateral trade negotiations back on track following the breakdown of the ministerial meeting in Cancun, Mexico, last month.
At the APEC side meetings, according to Morrison, President George Bush will be seeking greater support for the U.S. effort in Iraq and understanding of U.S. views on exchange rates. In his meeting with South Korean President Roh Moo-hyun, for example, he is expected to seek a greater South Korean troop presence in Iraq, while he will reiterate the U.S. call for flexible exchange rates in his meeting with President Hu Jintao of China.
Sumner La Croix, an economist at the East-West Center who focuses on Japan and China, said both of those countries are coming to the APEC meetings ready to resist U.S. pressures to allow their currencies to appreciate.
China is not ready to end its fixed exchange rate with the dollar and begin floating the yuan, La Croix said. "Its banking system is in a precarious state, with roughly half of all loans in China now categorized as non-performing loans. Taking the risk of floating the yuan would be totally unacceptable to the Chinese leadership."
La Croix said the Japanese government already allowed the yen to depreciate against the dollar in the last month. It believes any further depreciation "would risk short-circuiting the promising Japanese economic recovery now underway. The U.S. government is likely to understand and accept these arguments but will likely press for additional depreciations to stimulate exports to Japan from the depressed U.S. manufacturing sector."
Charles E. Morrison can be reached at 808-944-7103 or morrisoc@eastwestcenter.org
Sumner La Croix can be reached at 808-944-7508 or lacroixs@eastwestcenter.org
East-West Center China specialist Chris McNally can be reached at 808-944-7239 or mcnallyc@eastwestcenter.org