Canada: Harper In Bali: Right Place, Right Time

Last Updated: October 9 2013
Article by Len Edwards

Prime Minister Stephen Harper boarded a government Airbus Thursday morning and headed for Bali, to attend another of the many summit meetings that form a major part of his job.

This summit — the Asia Pacific Economic Cooperation summit — is not well known in Canada ... unless one remembers a certain pepper spray incident in Vancouver in 1997. It doesn't have the clout of a G20 or G8, or the singular focus of the Nuclear Safety Summit coming up in the Netherlands next March.

The APEC group was created in 1989, largely on Australia's initiative. Since 1993, the annual meeting has been held at the leaders' level.

APEC's founding coincided with the sudden burst on the global scene of the Asian growth miracle, led by the 'tigers' — Korea, Taiwan, Hong Kong and Singapore — and just as Deng Xioping issued his remarkable call for economic reform in China. APEC's purpose was to build a new 'economic community' in the region — not on the European model, but on Asian terms and with Asian approaches. It eschewed the hard-edged, rules-driven economic methods favoured by western countries and institutions such as the GATT and the IMF. Instead, relationships were to be fostered, problems discussed and cooperative arrangements encouraged.

On trade policy, if trade agreements proved too difficult to negotiate, member economies were encouraged to move unilaterally to lower their barriers to outside goods and services to achieve regional free trade by 2020 — and drive growth. Developed countries would move first, developing countries later.

Unilateral liberalization on a major scale has never happened in APEC or elsewhere, although the economic argument is sound. Politics, as usual, gets in the way.

Over the past 24 years, despite the enthusiasm that accompanied its birth, APEC's 'hard outcomes' have been few and far between. APEC's work on practical improvements in moving goods across borders has been a particular achievement. Last year's agreement to liberalize trade in environmental goods is another positive example. Yet, against the passage of time, progress towards a more open, community-driven economic model is evident. APEC also did some work on anti-terrorism following 9/11, but it has not expanded its mandate seriously into non-economic areas.

So is this APEC summit in Bali important? Is it really worth Harper's time?

If we only consider the hard outcomes, the answer to both questions is probably "no". APEC remains a hard sell — outside Asia.

Bali's results likely will follow the modest pattern of past summits: statements of intent to tackle this or that barrier to regional growth and instructions to bring experts together to discuss cooperative solutions for eventual approval and voluntary implementation. For example, the G20 has been considering how the lack of financial resources is holding back badly-needed infrastructure development in the emerging and developing worlds. This is a particularly problem in Asia, and a natural target for APEC.

But if success is measured on softer outcomes and against strategic benefits, then Bali is worth the PM's time. APEC's power to convene Asian leaders gives him another occasion to do business directly with key players. In Bali, watch for Harper to strike up a strong relationship with new Australian Prime Minister Tony Abbott.

Bali also provides the PM with an opportunity to push his messages on the challenges facing global economic recovery. It's an area strength where he can make a difference. Although India is not in APEC, the Asian leaders in Bali represent those countries whose economies will be among the key drivers of global growth in the coming decades. Its vital that Asia gets it right.

Strategically, APEC links the Americas with Asia and promotes a trans-Pacific economic growth model. This linkage was a major achievement in 1989 for Canada and the United States. It must be sustained and nurtured as a complement to the Asia-only models also in play.

Expect to see a side-meeting at Bali among leaders of those 12 countries participating in the Trans-Pacific Partnership trade negotiation. These negotiations are reportedly making good progress in spite of fears that Japan's recent entry into the talks could cause delays. While an end-of-year completion date is probably impossible, leaders will want to use their presence in Bali to drive towards a successful conclusion in the first half of 2014.

Finally, the prime minister's presence at APEC (and that of John Baird and Ed Fast at the lead-up ministerial sessions) reinforces the government's message, and that of the Canadian business community, that Canada is serious about re-engaging with the Asia-Pacific.

It helps confirm with our customers and partners in Asia that we have a long-term stake in the future of the region and are interested in playing a part in institutional arrangements of importance to them. This is what Asians expect.

In short, while APEC summits often fail the hard outcome test, they're very important to Asians. That means they're important to us.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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