[asia-apec 341] Panel on APEC..., Remarks of Lyuba Zarsky (Part I)

[Asia Pacific Regional Environment Network (APRENET)]

"Panel on APEC and it’s Implications for Asia & the Pacific:
A Forum with NGO, Government and Business Leaders"
School for Advanced Strategic and International Studies, Johns Hopkins
University,
October 8, 1996
Remarks of 
Lyuba Zarsky

~~~~~~~~~~~~~~~~~~~

Thanks very much.
I don’t know about you but my mind is spinning like a kaleidoscope at the
moment. Over the past 2 and a half hours that I have been listening,  I
have agreed—in part—and disagreed, in part, with every single  speaker. My
own understanding of APEC, its character and possibilities, both overlaps
with and contradicts many of these perspectives. I think the heated state
of my brain reflects not just too much coffee but the fact that APEC is a
highly dynamic and evolutionary process. 

In APEC, we have a creature which is fundamentally different from the WTO
and quite different from NAFTA. APEC is not a negotiating body and is not
framed in terms of legally binding agreements. So what is it?  Well, it is
still to be defined. As Walden Bello pointed out, there’s a battle going on
for the heart and soul of APEC. And I think, as distinct from Walden, that
the United States is not itself clear on its own objectives.

Without doubt, achieving trade and investment openness in East Asia is the
overarching U.S. goal in APEC. However, the U.S. also has other objectives,
including long-term security interests and environmental cooperation. And
there is often incoherence between U.S. efforts to promote short term trade
interests and its long term diplomatic objectives. 
Even for the most powerful player, the purpose of APEC is evolving and
many-sided.

 The fact that APEC is not yet set in stone, that its future shape and
possibilities are still being created, is why I have hung my hat here. For
the last five years, I’ve been pushing on the potential of this young,
flexible, international organization to build into its economic logic the
social concerns that animate my life, that are my commitment in life.

So let me start  by making  some  comments which ground APEC theoretically.
I won’t make a fully developed argument but present just a few taste
treats. To do this, I’ll put on my academic hat—which seems appropriate
here at Johns Hopkins. 

I trained as an economist  primarily to help my work on international
environment and development issues—and especially the process of
institution building. I urge those of you who have yet looked at the
literature on institutions, especially students, to do so. The literature
is a cross-section of economics, sociology and law, and basically asks the
question: "Why are human institutions constructed the way they are?"  Two
broad schools of thought try to answer this question—both of which were
represented on the earlier panel. 

The first school of thought suggests that institutions emerge out of a
struggle between people, what are called distributional struggles. That is,
people fight for the goodies—power, money, status. Any existing institution
reflects the outcome of that fight and its dynamics are about the
continuing battle. 

The second school of  thought says that institutions emerge to solve
coordination and cooperation problems. The idea here is that, to live
together, humans need to create rules and procedures. Institutions provide
cohesiveness and allow humans to have
a society. They serve the common good.

I think that the earlier panel reflected a tug-of-war between these two
views. Some panelists argued basically that what APEC is about is a
struggle--between East and West, North and South—for the economic goodies,
especially market and investment access.  Other panelists  emphasized that
APEC is about  developing rules and policies for the common good. 

Well, my view is that APEC is both these things. And when we come to the
social issues, there is no doubt that we are struggling to define and
promote the common good in the region as a whole.

What is APEC? Well, APEC in fact has three faces. The first face, which you
heard a lot about on the first panel, is about economics. The existence of
APEC is driven by market processes of economic integration. Some 70% of the
trade of the region is within the region. Some 60% of investment flows go
from one to another APEC country. If APEC collapsed tomorrow, the processes
of economic integration would continue. 

This is an important point. Asia Pacific is emerging as a region not mainly
because of government initiatives but as a result of market processes. The
heart of the diplomatic, governmental agenda is how to manage the
market-driven process. For the poorer countries of the region, the central
concerns have been to make sure that integration promotes development and
industrialization. For the richer countries, it is about gaining or
maintaining access to the big growth potential of the region. 

The second face of APEC is about the "social agenda," that is, social norms
and policies. As countries or regions become more economically integrated,
they face pressures to converge towards the same economic and social
policies and norms.  The  debate in APEC is and increasingly will be
essentially about what those policies and norms will be. From an
environmental perspective,  the pressure to be the same  has been called
the "harmonization" debate. 

The key question is whether harmonization is better or worse for ecological
management. Without government intervention, competitive pressures will
mean that policy convergence happens at a level which is too low to promote
truly sustainable development.  The role of governments is to cooperate in
raising the game, raising environmental benchmarks for all countries and
companies. 

This issue of what will be the terms of convergence, both on environment
and other social issues like labor and human rights, is the second face of
APEC. Given the stakes, both ecologically and socially, these are crucial
issues.  The environmental agenda has begun to be addressed, it has come
inside the house of APEC—at least from the front yard to the foyer. Human
rights, however, remain well outside in the yard or even the street.