[asia-apec 342] 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

PART II
~~~~~~~~~~~~~~~~~~~

The third face of APEC, one is just beginning to be talked about, is
security.  APEC is the only transpacific multilateral institution, the only
forum where all Asia Pacific countries sit down together and talk. These
are powerful, dynamic countries—China, Japan, the United States. In the
long run, this may be APEC’s most important aspect,   this potential role
in helping to peacefully manage economic and political transitions in Asia. 

When I hear American business people say they are not keen on APEC, do not
see it as especially relevant or important, because they want to sell more
financial services or auto upholstery, I think they are missing the boat.
Likewise, when NGOs want to simply say "No to APEC," they are also not
considering the bigger issues of international relations.  There are some
important processes at work in APEC in terms of world relations and in
terms of the U.S. role in those processes.

Asia Pacific is going to look very different 25 years from now. The U.S.
might be
a gorilla as Walden Bello suggests but Japan is a rather big chimpanzee and
China is a might big baby gorilla. In Asia Pacific,  a new power balance is
emerging. If not managed, the potential for an arms race—including a
nuclear arms race—is high. APEC is not likely to be the primary security
framework in Asia Pacific but the process of 
engagement and cooperation is good for maintaining peace over the long term. 
Processes of cooperation are also good for the environment—so many
environmental problems require nations to work together to find solutions.
Cooperation is better than flinging missiles at each other, whether orally
and figuratively or for real. To achieve both the social "common good"
issues and promote peace, we as NGOs need to promote regional cooperation. 

So what should APEC be doing on environmental issues? What could and should
it do that couldn’t be done by other international groups like the UN
Environment Programme 
or the Commission on Sustainable Development? Why APEC? It is precisely the
linkage to trade—but not trade rules, like the WTO—which makes APEC a
creative and potentially effective arena. 

APEC can not, should not, and hopefully will not be a place where the
United States or other rich countries be the boogie man on environmental
issues. We should not approach environmental cooperation at APEC by saying
that countries must perform in particular ways on environmental management
or else face trade restrictions. This has been the primary approach—and
stumbling block—at the WTO. Rather, in APEC, the approach should be "how do
we move together to set new common policy frameworks which improve
everybody’s environmental performance?"

The environmental agenda at APEC, in other words, should not be framed
solely in terms of what China must do, what Korea and ASEAN must do, but
what the U.S., Canada, Australia must do. One of the big issues which APEC
has not yet addressed is sustainable resource management—forestry,
fisheries, agriculture, minerals. 

Agriculture is one of the stickiest issues for APEC on the trade side. The
U.S. has pressured Japan and Korea to liberalize their rice markets and
embrace "free trade" in rice. Well, given the way that agriculture is
managed in the U.S., the barriers to "free trade" are much deeper than just
trade restrictions in East Asia. 

I live in California, a major rice growing area. Free trade for rice would
mean more rice exports from California. Now, those of you have ever flown
over California would be stuck by what a brown place it is. Yet California
has garnered a competitive advantage in rice—a very wet commodity. How?
Well, water is highly subsidized in California. The water subsidies both
skew trade AND create environmental problems in California. We undermine
our own environment, financially favor certain products over others,  and
sell that rice to Asia in the name of free trade.   This is fundamentally
incoherent, inconsistent—and irrational. 

Policy convergence at APEC means addressing these kinds of resource
management issues. APEC, for example, could be a place where countries move
toward common policies on resource subsidies, on energy pricing, on broad
guidelines for environmental standards. 

If governments don’t move together, they will face competitive pressures
which keep environmental standards "stuck in the mud." They have to
coordinate policies or else market pressures will make it tough for an
individual country to raise standards much above their main competitors. In
economics, we call this a collective action problem. 

The main agenda for environmental cooperation at APEC is how to move
towards policy convergence in ways that raise everybody’s game. The common
framework is needed not so much to manage resources everybody shares, like
the Pacific Ocean—there are other institutions like UNEP that could do
that. Rather, APEC provides a vehicle to coordinate and improve management
of domestic resources that are implicated in trade: coastal zone
management, resource subsidies, and standards across a host of sectors.

Moreover, APEC can be a place to help close the gap between richer and
poorer countries in environmental standards by promoting
"capacity-building."  Technology transfer, training, and the development of
standardized data bases would help countries get on the same track. APEC
could be a place where the richer, OECD countries lend a helping hand to
newly industrializing and developing countries.

Some of what APEC has actually done so far represent  some international
milestones. In 1994, APEC adopted a set of sustainable development
principles which set a broad vision. The vision was that environmental
issues would be integrated throughout the economic agenda of APEC and into
domestic economic policy of APEC countries. Rather than set up a separate
"environment committee", the directive went out to every Working Group and
Committee to incorporate environmental concerns. Most of the Groups,
however, didn’t know what to do or how to do it. A deep-seated inertia
remains within APEC to stay mired primarily in old ways of thinking about
economic and trade policy—ways that exclude environmental and social
concerns. 

So on the one hand, APEC offers the potential to move forward in ways that
go much farther than other organizations. But on the other hand, that
potential is still in its infancy. 
We as policy oriented and activist NGOs should be clear about what the goal
is and how to effectively push along the agenda.  

One of the central issues is integrating the "trade track" of diplomacy at
APEC—the place where trade and investment issues are discussed and
commitments made—and the "environmental track." If the "trade track" is the
sun, then the "environmental track"  still orbits somewhere around Jupiter. 

The Sustainable Development Principles, for example, did not seem to inform
the Individual Action Plans. As a first step, these Plans should be
reviewed for environmental and social impacts. I was very interested to
hear the U.S. say it would support the concept of environmental review of
trade agreements at the  WTO.  This was certainly not said at the APEC
Senior Officials Meeting.

Secondly, commitments to improve environmental performance should be
included within the Plans. The great advantage of the Plans is that they
offer broad benchmarks set by individual nations for achieving trade and
investment openness. Well, they could also be a framework for achieving
goals of better environmental management and improved social and human
rights management.

So far, APEC has focused mainly on capacity-building. It has had two
Ministerial-level meetings on the environment and a third is set for 1997
in Canada. It  selected three priorities for regional
cooperation—sustainable cities, clean technology, and sustainability of the
marine environment. It has sponsored studies and expert group meetings and
spawned Leaders initiatives.

What is needed now is to broaden and deepen the environmental agenda by
moving toward discussion of policy, including resource management policy.
APEC also needs to create avenues for public participation, especially
participation by "civil society,"  and greater public transparency.
Finally, APEC needs to fulfill its own vision by  integrating environmental
diplomacy and commitments with the trade agenda. Then, the process of
creating a trade and investment regime in Asia can be truly designed
according to principles of sustainability.