APEC's Small Steps
THE G-7 it isn't; but give it a decade.
The Asia Pacific Economic Cooperation forum (APEC) ended a finance ministers' meeting over the weekend with a joint statement that leaves little doubt about the forum's direction toward a more formal grouping.
APEC proposed several principles that it said should guide the economic policies of the group's 18 member-states; it commissioned the International Monetary Fund to conduct a study of capital flowing into and within APEC; it scheduled a meeting of finance ministers and deputies for later this year or early next to discuss how to manage capital flows; and it began an effort to raise $1 trillion over the next decade - with help from private sources and from institutions like the IMF and the Asia Development Bank - to help pay for the infrastructure to support the region's growth.
The group faces some formidable obstacles on its road to trade-blocdom. Relations between the United States and Japan remain strained over trade issues. The US and China are engaged in political and economic chest-thumping as the deadline approaches for President Clinton to decide whether Beijing's human-rights record merits renewal of most-favored-nation trade status. China and Japan are embroiled in their own disputes. And, by the way, Malaysia, one of the region's strong economic performers, isn't at all sure that APEC itself is such a great idea, especially if the US participates. Small wonder that US Treasury Secretary Lloyd Bentsen sought to play down these differences at the meeting.
US attention to Asia generates a good deal of Euro-angst on the other side of the Atlantic. Some Europeans question how Washington can reconcile its support for multilateral trade while aligning itself with what look suspiciously like trade blocks. But the US can ill afford to avoid stronger economic ties with 2 billion people who buy about 60 percent of US exports. (Nor can APEC long afford to ignore a potentially key Pacific player: Russia.) The challenge for Washington may lie in acting as a bridge between blocs, rather than a barricade.