FOCUS-ON-TRADE July 1997

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FOCUS on APEC

____________________________________________________________________

FOCUS-ON-TRADE

A regular bulletin produced by Focus on the Global South (FOCUS)

Bangkok, Thailand Number 16, July 1997

Focus-on-Trade continues, under a new name, the electronic bulletin

formerly known as Focus-on-APEC. The new name reflects the expansion

of the concerns of Focus on the Global South to trade forum and

organisations beyond APEC, including the World Trade Organisation

(WTO) and the ASEAN Free Trade Area (AFTA). Focus-on-Trade will

contain updates on trends in world trade, but its emphasis will be

analysis of these trends from an integrative, interdisciplinary

viewpoint that is sensitive not only to economic issues, but also to

ecological, political, gender and social issues related to

developments in world trade.

Your contributions and comments are welcome. Please contact us c/o

CUSRI, Wisit Prachuabmoh Building, Chulalongkorn University, Bangkok

10330 Thailand. Tel: (66 2) 218 7363/7364/7365, Fax: (66 2) 255 9976,

E-Mail: admin@focusweb.org, Website: http://focusweb.org

Focus on the Global South is an autonomous programme of policy

research and action of the Chulalongkorn University Social research

Institute (CUSRI) based in Bangkok.

______________________________________________________________________

____________________________ IN THIS ISSUE

APEC UPDATE

Environment ministers avoid the issues in Toronto by Aaron Schneider

APEC: Out of sight should not be out of mind by Nicola Bullard

Canadian Senate back free trade

REGIONAL ANALYSIS

American Resurgence, Japanese Malaise by Walden Bello

ASEAN’s fateful; choice: to enlarge or deepen by Walden Bello

WTO MONITOR

The “Shrimp-Turtle Controversy” and the Rise of Green Unilateralism by

Walden Bello

______________________________________________________________________

______________________________ APEC UPDATE

Environment ministers avoid the issues

Report on APEC Environment ministers meeting June 9-11, 1997 in

Toronto for the Canadian Environmental Network (CEN) by Aaron

Schneider The Asia Pacific Economic Cooperation (APEC) Environment

Ministerial Meeting was more remarkable for the legion of issues that

were avoided than those that were discussed. Environment is clearly

peripheral to the main agenda of regional trade liberalization and

rapid economic growth among the world’s 18 most dynamic economies.

However, there have been strong statements of concern by APEC members

about the environmental degradation and poverty already at crises

levels in the region and for the critical strain on all resources as

the populations of already crowded cities swell early into the next

century. Canada, as the host and chair for 1997 APEC meetings, had the

opportunity to take strong leadership on three environment agenda

items that had received substantial support in Manilla last summer:

Sustainable Cities, Cleaner Production and Sustainability of the

Marine Environment. Canada also attempted to make progress on two

items that were less predictable in terms of support: the Impact of

Expanding Population and Economic Growth on Food, Energy and the

Environment (FEEEPS, an awkward acronym but try EPEGFEE), and

Sustainable Growth, an attempt to link social and environmental

considerations directly to economic decision making. There is an

abundance of information on line in the form of summary, analysis,

critique, press clippings and documentation from IISD, Nautilus Inst.

(US), APRENet, and Environment Canada. I will not attempt to cover all

that ground as it is already filling the email boxes of most who have

announced an interest in APEC, but I will offer a brief summary for

context and my comments. It is not clear how much APEC will exacerbate

the rapid development already taking place in the Asia-Pacific region,

but it certainly aims at the further liberalization of any barriers to

trade and investment in the region. The question for this meeting was:

can the environmental and social impacts of these developments be

mitigated through voluntary commitments by APEC member economies?

(Although APEC members were officially represented by their

governments’ environment ministerial delegations, they are referred to

as member “economies”, implying an almost supra-national forum to this

meeting where the “economy” exists as a popular and representative

body. I must admit to having difficulty with the implied concept.)

There are at least two fundamental difficulties that are unlikely to

be resolved. The first is the dichotomy between the path of trade

liberalization and that of environmental/social concerns. Unless

environment and human welfare are integrated into the economic path as

the primary objective of any further development in the region, it is

unlikely that significant progress can be made and further disaster

avoided. Mitigation strategies and damage control are unlikely to

receive strong enough support while they are seen as peripheral to the

main theme of increasing wealth. The second fundamental difficulty is

the elite nature of the proceedings and the lack of involvement of the

civil society as might be represented by established human rights,

environment and development NGOs. Of all the delegations, the only

ones to have NGO representatives were Canada (2), the U.S. (1) and the

Philippines (1). My attempts to insert language referring to the

future inclusion of NGOs in the Joint Statement were reduced to a less

specific reference to “broader society” even though some of the

members including Japan (in the Sustainable Cities discussion) called

for the inclusion of NGOs. The problem remains that without the work

and coordination of NGOs that are highly developed as extension

service providers in countries like Thailand there is no practical way

of implementing the necessary actions for achieving broader

social/economic equity and environmental protection. Most governments

do not have that capacity. There is also no other way of guaranteeing

a reality check on priorities and goals that is independent of

corporate interests and is responsive to the interests of the civil

society. Much was made of the APEC Youth Caucus as the link to public

conscience and it is true that they (The Dialogue with Youth) provided

an innovative breath of fresh air with their paperless conferencing

and their claim to the present as well as the future. But they were

not the old NGOs with long histories on the substantive issues that

APEC members for the most part wished to ignore here. They were a safe

bet because their demands were general enough to receive polite

approval and not require rendering into compromising agreements. The

first two agenda items were easily passed: Sustainability of the

Marine Environment focused on integrated approaches to coastal

management, marine pollution, and marine resources. The approach being

one of research, information and technology exchanges, capacity

building, education and training, and public/private sector

partnerships. Cleaner Production focused on “sustainable industrial

development” through “cost effective environmental management

techniques” including “development and use of tools to facilitate

cleaner production,…established science, technology and research

networks, . . . sharing technical and policy information.” Despite the

familiarity with problems which range from factory effluents and

agricultural chemicals to mine tailing wastes, there was nothing as

specific or substantive as the negotiation of time lines for waste

reduction (no less zero emissions), mandatory performance standards,

or innovative industrial grouping to use wastes from one industry as

feedstock for another. More basically of course, there was no mention

of reducing consumption and demand as a way of reducing waste. This

was left to separate deliberations regarding “sustainable growth”.

Sustainable Cities was strongly put forward by Canada as a major cross

sectoral topic that could possibly show what “sustainable development”

could mean in practical application. The challenge faced by APEC

members is the accommodation of the swelling urban populations of the

21st century with 70 per cent of the region’s people living in cities

by 2015. The background rhetoric addresses the need to “harmonise

economic prosperity with environmental and social considerations”, and

that “Healthy natural systems (ie. natural filtration systems –

forests), are fundamental requirements” and generally recognises the

importance of protecting ecosystems to protect and provide for human

needs in cities. The approach taken is based on the designation of

“five salient barriers” to achieving sustainable cities: inadequate

use of knowledge, disincentives to investment, separation of agendas,

the lack of broader involvement of people, and lack of attention to

the needs of the poor. Although the language in the discussions and

the joint statement aimed at actions to address the removal of these

barriers, the agendas still appear to be crippled by separation and

the exclusion of key players. There appeared to be more reliance on

new technologies for transportation and green infrastructure and novel

methods of financing ($3 trillion in the next 10 years requires long

term capital decisions. Paul Antil of the Canadian Env. Inst. Assoc.

suggested APEC common currency bonds and an incremental gas tax), but

nothing as progressive as tax reform was openly suggested. Reduction

of the lead in gasoline was one of the few concrete action measures

agreed upon, There was a general deferral of broader environmental

issues to other fora of international treaties such as UNGASS coming

up in New York, and the Framework Convention on Climate Change in

Kyoto in December was expected to develop legally binding emissions

reductions for developed economies “in a way that maximises national

flexibility in meeting these targets”. FEEEP and Footprints: The

Impact of Expanding Populations and Economic Growth on Food Energy and

the Environment. This was probably the segment where Canada made the

best attempt to connect APEC with reality. Given the APEC situation,

it should not have been surprising that it didn’t get very far, but it

was disappointing non the less, especially considering that the

content included the discussion paper by William E. Rees, PhD of

University of Bristish Columbia’s School of Community and Regional

Planning, “The Ecological Footprints of Growth, Tracking the Global

Economy”. UNEP’s recent Global Environment Outlook states that “human

use and pollution of water, soils, forests, fisheries and urban air is

depleting these renewable resources faster than they can naturally

recover”. There was a sense that this was a result of failure to

include the environment as a product and capture the full cost of

environmental effects in the “bottom line”. In Canada’s draft paper to

the ministerial discussion on FEEEPS, Rees’ Footprint Analysis goes

much further than the simplistic solution of treating the environment

as capital (including environment in the GDP) and faces the

fundamental question of human carrying capacity as a function of per

capita consumption. Rees clarifies what is conceptually at fault with

the current “technological expansionism” paradigm which is the

assumption behind most discussions of sustainable development today.

He also presents an “ecological paradigm” and the Ecological Footprint

Analysis which shows how much land is appropriated (from someplace) to

supply the resources consumed by each city, region or nation. That

this far exceeds the land base of most developed countries (Canada and

Australia are exceptions), indicates their ecological deficits and

indicates that there is “not enough natural capacity on the planet to

sustain present international development trends using prevailing

technology”. Rees points out that advocates of growth have convinced

us that human technology has mastered nature and can either mitigate

the impacts of development or else create substitutes for what has

been or will be destroyed. (This was a current provided to the APEC

meeting by the Canadian Environmental Industries Association which

predicted $3billion and 1.8million jobs in the next three years for

its “sunrise industries”.) Rees reminds us that economic theory is

predicated not on the maximisation of production but on improving

human welfare which will best be served in the long run by preserving

the reliable flow of material, spiritual and aesthetic goods from the

ecosphere. In this accounting lower production leads to better welfare

for the industrialised countries and leaves room for some catching up

for the less developed. Predictably this did not go over with most

other delegations and it was dropped from the agenda for discussion by

the Ministers. It was, however, heartening to see Canada’s delegation

(led on this by Avrim Lazar) having the backbone to try it on APEC if

only to underline what is really at stake. The discussion dwindled to

the suggestion that Canada lead the drafting of a paper highlighting

the “integrated nature of the environment with other FEEEP components

by looking at the Sustainability of consumption and production

patterns within the APEC region as a whole (without focusing on

individual economies)” to be ready for the Economic Committee’s FEEEP

symposium on September 2nd. Sustainable Growth was a discussion of how

to promote environmentally sustainable growth (development was used

interchangeably) in APEC assisted by a Canadian paper and an

Australian “non-paper” the substance of which was the usual

formulation of sharing knowledge, building capacity, public/private

partnerships and coordination mechanisms. Isolated from all the other

agenda items, this section on sustainable development seemed to lack

focus until the chair asked for an expression of issues of concern

from the members. At this point, the Republic of Korea attempted to

push a resolution to ban the export of nuclear reactor wastes in the

region, citing Taipei as taking advantage of North Korea to dispose of

nuclear wastes. This was seen as a bilateral issue, but an attempt was

made by the chair (John Fraser) to separate out the general essence

for a resolution. Although China gave initial strong support to Korea

(surprising, considering that they dump their nuclear waste in Tibet),

they finally were unable to agree to the minutia of wording and it was

dropped from the joint statement as an impasse. Conclusion and

implications for NGOs: My presence on the delegation provided an

opportunity to see what is attempted, even if it fails, and to learn

the character of some of the people working in the delegations. Larry

Funnell (DOE) was very helpful in coordinating my participation and in

distributing my comments to other delegates, including those I faxed

to him before the meetings. There was also the opportunity to network

with the few other NGOs and to encourage other delegations to include

NGO reps. At future meetings. The important issue remains: What is the

best way to influence the process? I judged that the demonstrations

outside the meetings had some general effect on the delegations, and

I did my best to clarify their message in side conversations. Also, I

don’t think my presence could be seen as CEN complicity with APEC. The

process has many structural flaws, not the least of which is the lack

of real NGO (and Public) participation although it is often raised as

an open question in the discussions. But NGO participation would have

to run deeper than simply presence on the delegations. Not all APEC

members have the same appreciation of democracy. To back away from

these limited agendas and look at the big picture for a moment, I

think we, as the CEN collective, must deal with the general shift

toward privatisation of public interests, the shrinking of government

responsibilities, and the steady growth of corporate power over all

resources which increasingly reduces all levels of government to

corporate clients. APEC is one of numerous regional trade

liberalization treaties which, together with MIAs and MAIs, will soon

reduce nations to serving corporations first and regarding their

citizens as “populations” to be managed rather than people with

aspirations and legitimate needs. To deal with this effectively, I

think it is necessary to integrate our own environmental, social and

economic concerns if we are to affect integration of those agendas in

organizations like APEC. It will take strong political movement and

extra-political action to reverse this drift backward in social

history.

Forwarded by Asia Pacific Regional Environment Network (APRENet)

Distributed by the Nautilus Institute for Security and Sustainable

Development (apologies for cross postings)

APEC: Outta sight should not be out of mind by Nicola Bullard* Apart

from the brouhaha of the annual leaders’ summit- one of the year’s

best photo opportunities – APEC rarely gets a mention in the economic

pages, let alone the headlines. But although APEC may be out of

sight, it should not be out of mind. Throughout the year bureaucrats,

expert committees, advisers and senior ministers toil away from the

spotlight shaping policy advice, agreements and ministerial

statements on issues such as the pace of trade liberalisation,

foreign investment regulations, environmental standards, and dispute

procedures. These are matters of importance, and we need to pay

attention to what APEC is doing on our behalf, even if it is in our

absence. Take for example the meeting of finance ministers held this

April in Cebu and enthusiastically opened by Philippines’ President

Ramos who declared that ‘continued rapid development of the region

required freer movement of capital, the development of domestic

capital markets and the increased private provision of

infrastructure’. The meeting closed on a more restrained note, with

the finance ministers adopting a set of voluntary guidelines to ‘ease

capital flows and sustain the region’s economic growth’ which are

extremely vague and peppered with provisos such as ‘with due respect

for our diversity and different levels of development’. The guarded

tone is significant, indicating only modest enthusiasm for a

free-for-all approach to capital flows and foreign investment and no

doubt reflecting the lessons (hopefully) learned from Thailand’s

recent tribulations resulting, at least partly, from uncontrolled

capital flows. Significant, also, is the ministers’ commitment to

support the resumption of talks to achieve a WTO financial services

agreement. Meanwhile in Paris, the world’s 29 wealthiest countries

(the OECD) are negotiating their own Mulitilateral Agreement on

Investment (MAI). The MAI is due to be concluded in May 1998, and

will establish a new international standard for investment

regulations. It aims to ease the movement of capital across

international borders by limiting the power of governments to

restrict and regulate foreign investment. In effect, this could mean

almost complete deregulation of investment. Once this standard is

adopted it could prove to be an irresistible blueprint for the WTO

financial services agreement. If this happens, the sensitivities and

national concerns so carefully accommodated in the Cebu voluntary

agreement will get crushed in the rush for a binding WTO agreement.

However, APEC ministers cannot complain if the pace is forced, after

all, they endorsed the resumption of talks at the WTO. One month

later, in May, APEC trade ministers met in Montreal to review

progress in trade liberalisation. Again, the final agreements are

vague and non-binding with a commitment to consider proposals for

‘sector-by-sector’ liberalisation at the November APEC Summit in

Vancouver. And again there is a commitment to ‘defining how APEC

could best continue to support the multilateral trading system under

the WTO’. To see where all this might be leading, it is interesting

to recall the fate of the information technology agreement which the

US pushed through last year’s APEC Summit. The Manila Declaration

called for ‘the conclusion of an information technology agreement by

the WTO Ministerial Conference that would substantially eliminate

tariffs by the year 2000.’ At the November 1996 WTO conference in

Singapore the US, bolstered by the APEC mandate, rammed information

technology to the top of the agenda and got what it wanted — an

agreement covering 85 per cent of world trade in IT products to

reduce tariffs to zero by 2000. In fact, US trade representative

Charlene Barshefsky noted in her press conference after the WTO

meeting that ‘Without the support of APEC for such an agreement,

there is no way this agreement would have come out of Singapore’.

Springboard to the WTO The US, continually frustrated with the lack

of progress in setting specific targets and reaching firm agreements

on trade liberalisation within APEC, has changed its gameplan. At the

May 1997 Montreal Trade Ministers meeting, Trade Representative

Barshefsky commented that APEC has decided to play a ‘catalytic’ role

where agreements can be negotiated to achieve a ‘critical mass’ which

can then move rapidly through the WTO. ‘With APEC pushing,

agreements can build momentum faster with fewer countries needing to

be consulted’, according to Barshefsky. This is both disturbing and

illuminating. Disturbing because it highlights the possibility of

APEC’s non-binding agreements being pushed through the WTO on the

basis of their support in APEC without there being any room for

discussion, broad consultation or dissent. Illuminating, because it

shows the US strategy of using APEC as a springboard to get issues

onto the WTO agenda. Although its agreements are non-binding, the

fact that APEC’s 18 members represent almost half the world’s

merchandise trade means that de facto APEC agreements carry weight at

the WTO. Slowly but surely the pieces of the global free trade jigsaw

are being put in place. Last week the US unveiled its trade and

investment interests in Southern Africa and other regions can expect

the same attention once their macro-economic indicators and growth

rates reach a respectable level. No doubt the international financial

institutions are doing their bit to ensure that this is sooner rather

than later. There can be no illusions about the US trade objectives.

The 1997 Trade Policy Agenda notes that ‘President Clinton has

designed a fair trade policy that seeks to take advantage of the

increasingly global economy in a manner that benefits American

workers, American businesses and American families.’ It goes on to

say that ‘trade is the tool by which we can project America’s core

values globally’ and it seems that every strategy is legitimate in

pursuit of these goals. APEC may be out of the spotlight, but it is

still one of the key building blocks for a global free trade regime.

Importantly, it is also one of the few forums where ‘diversity and

different levels of development’ are recognised and, as such, member

states should be wary of their carefully nuanced agreements

reflecting that diversity being steamrollered by the WTO. Equally

worrying is the fact that issues which really effect people (as

opposed to the politicians) such as the impact of trade

liberalisation on agriculture and the environment, barely rate a

mention. *Nicola Bullard is a senior associate with Focus on the

Global South, an autonomous programme of policy research and

analysis of the Chulalongkorn University Social Research Institute.

 

Canadian senate backs free trade

The Canadian Senate has issued a report entitled “The Importance of

the Asia Pacific Region for Canada” (June 1997). The report praises

APEC initiatives and calls upon the government to follow up on five

recommendations: 1. That, as the host for APEC activities in 1997,

the Government of Canada use this status to continue to strengthen the

members’ trade and investment liberalization commitments. Firm

targets and timetables for future liberalization initiatives should be

adopted at the November 1997 APEC Leaders Meeting in Vancouver. 2.

That Canada as chair of APEC for 1997, take every step possible to

encourage APEC members to make concrete, longterm commitments to

reduce non-tariff barriers as well as tariffs. 3. That the Canadian

government purposefully guide APEC towards the establishment of

targets and timetables for the near-term elimination of barriers to

investment in the Asia Pacific region. 4. That, to enhance investment

and investor certainty in the Asia Pacific region, Canada urge other

APEC economies to work together to achieve a substantial tightening of

APEC’s existing non-binding investment code. 5. That Canada, in its

role as current APEC Chair, caucus with APEC members on increasing the

probability of an early and positive decision on China’s accession to

the WTO. In a short paragraph at the end of the report, entitled

“Other Canadian Priorities”, there is a reference to Canada’s

intention in 1997, to open APEC to youth, women’s groups and NGOs in

the decision-making process. The Senate report states that the

Government will do this in the following ways: i. involving youth

in APEC sectoral ministerials and a youth forum ii. providing

analytical and logistical support the APEC Peoples Summit iii.

providing over $200,000. for NGO Conferences in 1997. The Senate makes

no recommendation regarding the participation of civil society. To get

a full copy of the report, please call 1 613-990-6080 or fax 1

613-947-2104.

WORLD TRADE ORGANISATION MONITOR

The “Shrimp-Turtle Controversy” and the Rise of Green Unilateralism by

Walden Bello* GENEVA–Thailand and other Asian countries are

central actors in a dispute that is shaping up as a landmark battle in

the volatile area of trade and the environment: the so-called

shrimp-turtle controversy. The World Trade Organisation (WTO)

recently agreed to a request to convoke a dispute settlement panel to

rule on the compatibility with WTO trading rules of a US ban on the

import of shrimps caught in the wild with nets that are not equipped

with “turtle excluding” devices. The move, which also covers

products from shrimps caught in such a fashion, is meant to protect

an internationally recognised endangered species, the sea turtle, and

is based on the US Endangered Species Act which requires US shrimp

fishermen to equip their nets with such devices. Round Two The

shrimp-turtle issue is widely regarded as Round Two of the

trade-environment dispute, the first round being the tuna-dolphin case

that played out in the early 1990’s, which was instigated by the US

ban, based on that country’s Marine Mammal Protection Act, on the

import of tuna caught with purse seine nets, which were supposed to

entrap large numbers of dolphins. A GATT disputes resolution panel

ruled against Washington, but the decision was never adopted by GATT

(the precursor of the WTO), leaving the US technically unconstrained

by the ruling. The current move affects shrimp exports to the US from

an estimated 40 countries, the most significantly affected being Asian

countries. While Thailand, Malaysia, and Pakistan are the formal

complainants, some 25 other countries have already reserved their

rights as “interested parties.” Although Washington has lifted the

ban on shrimps from Thailand because it is already equipping its

fishing fleet with turtle-excluding devices, Bangkok is joining

Malaysia and Pakistan as a complainant “out of principle.” Most

likely, it is from self-interest, since the Thais would like to

preempt the application of the US law to shrimp that are raised in

aquaculture farms, which account for 75 per cent of Thailand’s shrimp

production. This is not an unreasonable fear since environmentalists

also contend that shrimp farms are extremely damaging to mangrove

ecosystems. The Philippines has come on as an interested party for the

same reason. As one Geneva-based Filipino diplomat told us, “We’re

not affected now. But if the Americans extend the ban to aquaculture

products, then we will really be hit hard since most of our shrimp

exports are produced in aquaculture farms.” Northern Versus Southern

Environmentalists Like Asian trade officials, though for more complex

reasons, Asian environmentalists have also been drawn to the dispute,

which has split the global environmental community. Many Northern

environmental organizations either explicitly or tacitly support the

US move. For them, the issue is not unilateralism but the principle

that trade restrictions can be placed on imports not only on the basis

of the nature of a product per se but also on the basis of how it is

produced–that is, governments ought to be able to restrict imports if

they are produced with unsustainable production processes and methods

(PPMs). Their big worry is that the WTO dispute resolution panel

will rule as the old GATT did in the tuna-dolphin case: that the US

move is unjustified because it is not based on product characteristics

but on PPMs, which is said to go against current international trading

rules. Asian and other Southern environmentalists are caught in a

dilemma. On the one hand, they are concerned that the sea turtle is

indeed in danger of extinction and deep-sea shrimp fishing without

turtle-excluding devices does contribute seriously to their

decimation. On the other hand, they are bothered greatly by the US

move to apply its domestic law to activities that take place outside

US jurisdiction. The US ban, to them, seeks to achieve a fine

objective with the wrong approach–unilateralism. For them,

restrictions ought to be applied not only to shrimps harvested in the

wild but also to those that are produced in environmentally damaging

aquaculture farms, but this should be done according to clearcut rules

of multilateral environmental agreements (MEAs) that are negotiated

among countries. Moreover, trade restrictions should be paralleled by

positive moves that compensate the affected producers and provide for

technology transfer that would assist them to shift to more

sustainable PPMs. The tendency among Southern environmental NGOs to

line up against the US ban is more pronounced now than during the

tuna-dolphin conflict. Perhaps one reason is that the shrimp ban

takes place in the context of a US trade strategy that has in the very

recent past become more unilateralist and more aggressive toward the

South, especially toward Asian countries. This trend has accelerated

despite the founding of the WTO, which was supposed to strengthen and

expand a “rule-based” multilateral system of international trade

governance. The March of Unilateralism Since the WTO came into being

in January 1995, the US has threatened to impose Special 301

sanctions on China twice for alleged intellectual property rights

(IPR) violations and threatened Super 301 sanctions against Japan and

Korea for restrictions on the imports of automobiles and automobile

parts. In the last two years, Washington has also placed practically

all of its other partners in the Asia Pacific Cooperation (APEC) on

the “priority watch list” or “watch list” of “IPR violators,” a move

which makes them candidates for sanctions under the Special 301

Section of the US Trade Act. Moreover, the US has used the WTO in

fairly blatant ways to push its trade interests. It has, for

instance, set itself up as the key arbiter of whether or not China

will be able to join the WTO. And Washington has shamelessly used key

WTO gatherings, such as the First Ministerial Meeting in Singapore

last December, to push through initiatives which will principally

benefit US corporations, like the landmark Information Technology

Agreement (ITA) to reduce tariffs on IT products to zero by the year

2000 among the countries that control over 95 per cent of IT trade.

Despite pleas from the WTO Secretariat and other WTO members that it

disavow Super 301 and Special 301, Washington has affirmed their use

and explicitly confirmed unilateralism as the main prong of US trade

strategy. Shortly after the ratification of the GATT-WTO Agreement,

for instance, then US Trade Representative Mickey Kantor told the US

Senate Finance Committee in April 1995: “We will continue to use

every tool at our disposal–301, Super 301, Title VII, GSP, the

Telecommunications Trade Act, or WTO accession–to open markets around

the globe.” This stance has recently been reaffirmed by Kantor’s

successor, Charlene Barshefsky, who told a US House of Representatives

Committee on March 18: “There are some who believe that simply opening

markets on a global scale is the be-all-and-end-all, no matter how it

is done or no matter who benefits. I subscribe to a different view.

It is imperative that we open markets in a manner consistent with the

rules of the WTO, but we must make sure Americans benefit directly

from the process, and to do that Americans must drive the rules of

the new global landscape and the opening of markets.” It is in this

context of accelerating American unilateralism that many Southern

environmental NGO’s are staking their positions in shrimp-turtle

debate. For them, it is unfortunate that it is on the shrimp-turtle

issue that the lines are being drawn in the struggle against

unilateralism, but to make an exception of this case is would be

tantamount conciliating unilateralism, with all the potential perils

this would pose to the well being of Southern societies and

environments. The Threat of Green Protectionism Many Southern

environmentalists seek a harmonious relationship between environment

and development, and they see a serious threat to sustainable

development emanating not only from unilateral trade measures like the

shrimp ban but also from a whole set of environmental measures that,

while taken for a good cause, become de facto a form of “green

protectionism.” More and more in the North, environmental product

standards are going up, with detrimental effects on Third World

producers. For instance, a study on the impact of such measures on

Indian industry done by the United Nations Conference on Trade and

Development (UNCTAD) has found that in the leather tanning and textile

industries, which are key export earners, the costs of eco-friendly

dyes required to meet international standards in the leather-tanning

industry are approximately three times higher than the costs of the

dyes currently being used. Also likely to have a negative impact are

new packaging laws which are meant to reduce the quantity of packaging

and promote its recovery and recycling. Here simply getting

information on and understanding packaging requirements in different

Northern markets is difficult and costly. Meeting new rules on

recycled or recyclable content for packaging often adds significant

costs, especially when Southern producers have to import green

packaging material to be able to export their goods to certain

markets. The reduction of market access posed by packaging

requirements is already very real for some countries. In Thailand,

for instance, exports of frozen fishery products have been negatively

affected, and other sectors dependent on significant quantities of

plastic and non-biodegradable matter for packaging are likely to

suffer as well. “Ecolabelling” or specifying the environmentally

relevant contents or production method of a product is also perceived

as posing new threats to market access although most significant

eco-labelling programs in the North are still voluntary. This is

especially the case in premium markets made up of environmentally

discriminating middle class consumers. To compete, Southern producers

find that they must invest significant amounts in raw materials, new

chemicals, new production processes, and testing and certification.

For Indian leather products, the cost of testing and certification

alone is said to be as high as 33 per cent of the current export

price. Thailand and other Asian countries need to take the trend

toward higher environmental product standards and ecolabelling in the

North seriously since according to UNCTAD, 60 per cent of Asia’s

manufacturing exports originate in areas where new environmental

requirements are emerging. Governments have to pay special attention

to the needs of their small and medium entrepreneurs. As a study of

the secretariat of the WTO’s Committee on Trade and the Environment

has underlined, while the big Southern manufacturers might have the

capital and technological capabilities to adjust to higher

environmental standards, small and medium enterprises, who have

neither the cash nor technological sophistication, will face

difficulties. Needed: An Environmental Marshall Plan Most Southern

environmentalists do not oppose the raising of environmental product

standards in the North. In fact, they support it. But in order to

prevent this trend from turning into a situation of de facto green

protectionism that discriminates against developing country producers,

they underline the importance of positive measures, such as technology

transfer aimed at upgrading and rendering more environmentally

friendly the production processes in the South. This would include

loosening patent and copyright rules so as to facilitate the adoption,

at low or reasonable prices, of Northern-owned eco-friendly

technology–something that Northern corporations may be loathe to do.

But support may not only be in the form of the transfer of packaged

technology but also in that of financial assistance for indigenous

research and development activities in the South meant to come up with

appropriate technology that meet higher environmental standards. Such

measures would not only benefit developing country exporters, say

Southern environmentalists, but they would have the effect of

generalising higher environmental industrial standards and production

processes in Southern countries, where old industrial technologies

have contributed significantly to making cities like Bangkok, Sao

Paulo, and Manila ecological disaster areas. The problem is: Are the

Northern countries willing to come up with the resources to facilitate

this environmental upgrading of industry in the South? Many Southern

environmentalists are sceptical, pointing to the fact that at the

United Nations Conference on Environment and Development in Rio in

1992, the North promised billions of dollars in environmental aid for

the South, part of which was meant to support the spread of

environmentally friendly industrial technology. Very little, if any,

of this aid has materialised, they emphasise. Very little too has come

as a result of the Montreal Protocol of 1987, which promised

assistance to Southern countries to ease their transition from the

production and use of CFC’s and other ozone-depleting substances. It

is clear, however, that without the equivalent of an environmental

“Marshall Plan,” higher environmental product standards in the North

will, in fact, result in de facto green protectionism, with tremendous

negative consequences for the well being of developing countries that

are increasingly following export-oriented development strategies.

*Dr. Walden Bello is co-director of Focus on the Global South, a

program of policy research and analysis of the Chulalongkorn

University Social Research Institute in Bangkok and a professor of

sociology and public administration at the University of the

Philippines.

 

REGIONAL ANALYSIS

American Resurgence, Japanese Malaise

by Walden Bello*

Gloom is the dominant mood in Japan these days. The nation’s spirit

appears to be sinking along with its currency, which recently dropped

to as low as 120 to the dollar from a high of less than 80 yen less

than two years ago. Hardly anybody notices the fact that the economy

has posted its best performance –over three per cent growth in GNP

last year–since the recession began in 1991, leading one observer to

comment that “just as the economy has begun to float free of the

shoals, the hands are jumping ship.” Instead, newspapers are full of

headlines and advertisements for lectures and books warning of the

demise of Japan as a world economic power. Typical is “Running on

empty,” a headline for an article on the state of Japanese

manufacturing industry in the Asahi Evening News. The American

Resurgence It is striking how similar the current malaise in Tokyo is

to that which afflicted the United States in the late 1980’s, when

there was a widespread sense that American capitalism was on the ropes

and the future belonged to Japanese capitalism. “Declinism” spread as

the dollar sunk and the trade deficit rose, promoted by a diverse but

influential band that included the journalist James Fallows, the

historian Paul Kennedy, the novelist Michael (“Rising Sun”) Crichton,

the economist Lester Thurow, and the famous Massachusetts Institute of

Technology research team that all but wrote the epitaph of the U.S.

auto industry. Today, the declinists have lost much of their

following, and in management circles, the so-called innovations that

had been identified as responsible for catapulting Japan to world

power status–quality circles, management-labor cooperation on the

factory floor, and industrial policy–are being left by the wayside.

American capitalism is resurgent, confident, and brash. This new

spirit was displayed at the recent World Economic Forum in Davos,

Switzerland, by Intel’s Andrew Grove and Microsoft’s Bill Gates, who

all but told the Europeans that they had lost the high tech race. The

new arrogance is not limited to corporate entrepreneurs. It has, in

fact, spread to intellectuals, even liberal ones like Thomas Friedman

of the New York Times, who wrote recently that “while many in Europe

and Japan are still trying to adjust to the demands of globalisation,

and are barely up to the starting line, the US is already around the

first turn.” It is worth quoting at length from Friedman’s essay

because this liberal paean to American capitalism synthesises the

intellectual rationale for the new arrogance. “If 100 years ago

someone told you that by the end of the century the defining feature

of world affairs would be ‘globalisation’….and that you had to

design a country best suited to compete in such a world,” Friedman

writes, “in many respects you would have designed today’s America.”

“The US,” he explains, “has the world’s most diverse and efficient

capital markets, which reward, and even celebrate, risk taking.

Anyone with an invention and a garage can hope to raise millions

overnight. It has a multicultural population that speaks the language

of the Internet, a constantly renewing flow of immigrants, a

transparent legal and regulatory environment, and a flexible federal

political system. It has a job market that enables workers to move

easily from one hot industrial zone to another, and a corporate sector

that has, unlike Europe’s or Japan’s, already gone through the

downsizing and restructuring needed for global competitiveness. It

has multiple economies, with a single currency, on a single continent

that looks to both the Pacific and the Atlantic. “Globalisation,”

Friedman concludes triumphantly, “is us.” Is the Economic Miracle

Formula Obsolete? Declinism is not, however, dead; it has merely

migrated to the other side of the Pacific, where Japanese versions of

Fallows, Kennedy, and Thurow have surfaced to make a fast yen

exploiting and deepening Tokyo’s fin de siecle pessimism. And, in an

interesting reversal of roles, it is now American capitalism that is

being held up as a role model for Japan’s corporate managers. Three

problems, in particular, receive widespread comment as the central

reasons for Japan’s stagnation: obsolete economic institutions, the

“strategic debacle” in software, and the decline in fertility. Japan’s

economic problems go beyond the weak yen, according to the pessimists.

A more strategic indicator, they say, is the fact that the

productivity of Japanese manufacturing is on average only 70 per cent

of that of the United States,’ and dropping. They note that a

seemingly positive trend in the 1980’s, the development of a truly

global reach by Japan’s corporations, is actually deceptive since

Japanese subsidiaries have actually been unprofitable in four out of

nine regions of the world–in contrast to US subsidiaries, which were

profitable in all regions. Moreover, the movement of Japanese

manufacturing facilities abroad owing to high labor costs in Japan is

“hollowing out” significant sectors of the economy without replacing

them with new skill-intensive industries. The economic malaise will

not be cured by short-term solutions like exchange rate stabilisation,

looser monetary policies, and fiscal stimulation via more government

spending. The roots of the crisis lie deeper, and the reason that

Japan’s economic managers find it so hard to provide a solution is

that they feel the very institutions that gave birth to the high

growth rates of the post war era may now constitute its Achilles

Heel. These institutions include industrial policy or the targeting

of particular industries to develop; the intimate relationship between

government and business, with government providing strategic economic

direction; the tight and comprehensive ties among particular banks and

particular industrial corporations better known as the keiretsu

system; and the social contract between management and labor that is

represented, among other things, by the institution of lifetime

employment. This system has long been a target of the US in its effort

to penetrate the Japanese market. What is interesting today is that

the voices calling for change include Japanese voices, including the

Economic Planning Agency and the venerable Ministry of Trade and

Industry (MITI), which was one of the key architects of this system.

In the euphemistic formulation of the Economic Planning Agency White

Paper, “not only is the adjustment of the industrial structure needed,

but the fundamental correction of those economic systems is also

required.” MITI prefers the indirect approach to euphemism: by

praising US policies and trends which, in its view, have spurred the

US domestic economy while transferring low-wage jobs abroad–such as

high-tech innovation, deregulation, privatisation of public services,

and encouragement of venture capital. But despite their plea for

“greater flexibility,” neither MITI nor the EPA dare spell out

concrete policies that would introduce more deregulation, more play of

market forces, and a less activist government. One reason, say the

cynics, is that the economic bureaucracies do not really want to give

up their control of economic direction. But equally salient, it

seems, are two concerns. One, that radical tinkering with one part of

the system might unravel the whole instead of leading to its

transformation. Two, that the social costs might be too high, with

unpredictable consequences. For Japan’s bureaucrats are very much

aware that there is another, disturbing side to the newly competitive

US capitalism celebrated by ideologues like Thomas Friedman. For what

the US economic managers have brought about in their pursuit of a lean

and mean corporate strike force for global competition is the most

unequal distribution of income since the Great Depression, the

reemergence of poverty on a significant scale, and tremendous

alienation among the lower classes. If this volatile discontent,

which now finds expression in inflamed anti-immigrant sentiment, is

also the price that will be exacted by the dismantling of the

institutions of Japan Inc., such as the lifetime employment of the

core industrial labor force, then the hesitations of the managers of

still relatively egalitarian Japan are understandable. The “Strategic

Debacle” in Software If the bureaucrats are stymied when it comes to

economic reform, they are desperate when it comes to high tech. The

key to global economic primacy, they realise, lies in information

technology. While the Japanese have excelled in translating

technological innovations into cheap manufactured goods in consumer

electronics, computer parts, and memory chips, it has eluded them in

microprocessors and in software, the two strategic heights of the

information sector, control of which allows domination of the whole

sector, as exemplified by the twin hegemony now exercised by the US

microprocessor manufacturer Intel and the US software giant Microsoft.

A recent interview I did with a prominent Korea-born engineer who

immigrated to California’s Silicon Valley and ended up creating his

own, thriving software firm, is worth citing extensively since it

captured vividly several dimensions of the Japanese dilemma as

perceived by a frontline fighter in the software wars. Knowledgeable

of the real state of Japanese high tech, he asserted, “I don’t think

the Japanese fully realise that more and more, strategic control of

their industries will lie with the American firms that will determine

the software they will use.” It is becoming clearer to people in the

industry that the problem with the Japanese is not lack of capital.

In fact, they have a surfeit of it. The problem is cultural. As the

Silicon Valley entrepreneur noted, “software development depends on

an education that emphasises logical rigour, individual creativity,

and competitiveness. Japan’s educational system prizes memorising,

discourages individual creativity, and puts the group above

everything.” An enthusiastic headhunter, he said that he doesn’t even

bother to look for people in Japan, “because it’s a waste of time.

And it’s not just a question of high salaries. It’s simply that I

won’t find them there. We go to India and now to Lahore [Pakistan] for

people, where the training in individual problem solving is along

western lines.” In fact, some Japanese firms have come to the same

conclusion as Silicon Valley and started to form alliances with Indian

firms, though, with their less insular and bolder methods, the

Americans are far ahead of the Japanese. Besides, says the engineer,

“you will never get the Japanese to import significant numbers of

Indian software people into Japan the way the Americans do. It’s

skilled immigrants that are largely fuelling information tech

development in the US–something that is totally inconceivable in

Japan.” So what can Japan do to reverse the trend? He pauses, then

says, “If I were the Japanese, I would focus on providing capital to

others that have the capacity to innovate and let them do the

innovating for me. You know, like venture capital. But the Japanese

should not seek to control these companies, since Japanese methods

will merely deaden their creativity.” The Fertility Free-Fall Culture

rather than purely economic factors appears to also lie at the root of

the third major problem that troubles the Japanese: the declining

fertility rate. The decline in the birth rate is a problem for most

of the advanced capitalist countries, but the projections in the case

of Japan are starker than those for most of the other major industrial

powers. The current birth rate stands below replacement levels, and it

is projected to decline from 1.45 per cent in 1995 to 1.38 in 2000.

A recent study of the National Institute of Population and Social

Security Research recently triggered alarm bells by projecting that

Japan’s population will peak at 128 million in 2007, decline to 100

million by 2050, then plunge to 67 million by 2100. Japan’s declining

birth rate has exercised the country’s male elite, in particular. It

is reported that in an earlier incarnation as a senior minister of a

previous government, Prime Minister Ryutaro Hashimoto suggested that

one way to arrest the fertility decline was to discourage women from

attaining higher education! Hashimoto and other powerful males are not

mistaken in sensing that it is educated women that increasingly hold

the key to Japan’s future demographic profile and, indirectly, its

future economic and political status in the world. In the 10 years

since 1985, the percentage of those unmarried among women in the key

25-29 years old age bracket jumped from 30 per cent to 50 per cent.

The Sexual Strike Undoubtedly, the statistical trends are to be

accounted for partly by economic rationality: In the choice between

staying single and devoting oneself exclusively to work and getting

married and being torn between the demands of one’s occupation and

housework, Japanese women are opting for the former in increasing

numbers. Economic choices are, however, only partially responsible

for women’s marriage choices. Indeed, what seem to be economic

choices in this case are shaped by cultural expectations that have

prevented the creation of institutional arrangements that would ease

the burdens of the modern working wife, who does not want children to

become an insuperable obstacle to career advancement: Men are not

expected to do housework or care for the children, women are. These

expectations are, in turn, part of a complex of male values and

expectations that are geared toward socialising women to be

submissive, loyal, and housebound. It takes but a few conversations

with Japanese women in their 20’s and 30’s to realise that something

profound is happening in the relations between the sexes. An ordinary

38-year-old housewife in Osaka, who serves as a schoolteacher and

takes care of the child while her husband spends most of his time

working in Tokyo, told me, “The growing gap in men and women’s

expectations–that is this country’s no. 1 problem. I simply can’t

accept it when my husband tells me that the reason we’re together is

to have somebody take care of him when he’s old.” Her husband, at her

side, says nothing, though he is clearly embarrassed. A very bright

and capable 30-year-old leader of a Tokyo-based NGO tells me that

practically all of her friends who got married are now divorced and in

no hurry to get remarried. “It’s this widening gap between

traditional male expectations and women’s changing values that’s

making more and more women of my generation choose to remain

unmarried,” she stated. “Narita-divorces” are on the rise, she says,

referring to a phenomenon whereby lovestruck lovers leave for their

honeymoon from Narita airport only to return wanting a quick divorce.

“Most Japanese men just don’t get it,” she concludes, revealing that

she herself has had a long-term relationship with a non-Japanese male.

It is tragic that probably the last to realise that their women are

waging what amounts to a sexual strike against them are Japanese men,

who do not appear to be in any hurry to shed their old ways. Is

Japan’s Decline Irreversible? The decline in fertility and the rise in

the numbers of unmarried women will have major consequences both for

the domestic economy and for Japan’s place in the world. The

proportion of senior citizens is expected to reach a quarter of the

population by 2015 and climb to nearly a third by 2049. What

precisely will be the shape of the political fallout of a situation

whereby relatively less and less people of working age support

relatively more and more economically non-productive people is not

known, but that there will be a political fallout is certain. With a

progressively smaller pool of workers to draw from, Japan will be

forced to confront the decision of either allowing in large numbers of

foreign workers or accelerating the movement of its industrial

facilities to East Asia to take advantage of plentiful Asian labor.

Whichever option Japan follows will have explosive consequences. With

fewer and fewer cannon fodder in the form of young Japanese recruits,

Japan might opt for a high tech military force structure and strategy,

including developing the nuclear bomb to provide the “ultimate

security” to an aging population. So is Japan entering a period of

irreversible decline, as the indicators and trends appear to suggest?

In military strategy, there are said to be two fundamental maxims.

One is to never invade Russia. The other is to never invade China.

There are analogous truisms in the study of technoeconomic competition

among nations. The first is never to count the US out. The second is

never to count Japan out. Like the United States, Japan might have a

few surprises in store for the declinists among us.

*Dr. Walden Bello is co-director of Focus on the Global South, a

program of policy research and analysis of the Chulalongkorn

University Social Research Institute in Bangkok and a professor of

sociology and public administration at the University of the

Philippines.

 

ASEAN’s Fateful Choice: to “Enlarge” or to “Deepen”?

by Walden Bello*

Like the European Union, Asean faces the choice of either “enlarging”

or “deepening.” And the choice it makes will have major consequences

on the prospects of two of its key projects, the Asean Free Trade Area

(AFTA) and the Asean Regional Forum (ARF). The Deepening Strategy:

Focus on AFTA The deepening strategy follows the vision of regional

economic cooperation articulated in the group’s founding document, the

Bangkok Declaration of 1967. Deepening would focus the regional

body’s energies on making the ASEAN Free Trade Area (AFTA) a reality.

This is the complex and challenging process of bringing down tariffs

among the ASEAN countries to zero by the year 2003 in order to create

a market of some 400 million that could serve as the basis of a

coordinated regional industrialisation. As we all know, ASEAN in its

first 20 years failed miserably as a body to bring about greater

regional economic integration. Scheme after scheme failed, from the

ambitious ASEAN Industrial Projects (AIP), which sought to assign

large-scale complementary capital-intensive projects to different

countries to develop, to the ASEAN Industrial Complementation Scheme

(AIC), which planned to divide different production phases of the

automobile and other industries among member countries. AFTA, which

was launched in 1992, is ASEAN’s latest attempt at serious integration

via trade policy, a task made very urgent by the competition offered

by the APEC pan-Pacific free trade area plan pushed by the United

States and Australia, which would make coordinated regional

integration at the ASEAN level simply impossible. Will ASEAN succeed

this time? The ASEAN economic elites continue to exhibit strong

hesitations in following up their declared commitments to bring down

tariffs to agricultural and industrial products, leaving many

observers sceptical about AFTA meeting the 2003 free trade deadline.

Another major problem is US opposition to AFTA trade liberalization

that does not take place as part of a larger Asia-Pacific-wide program

of trade liberalization. AFTA, according to US Trade Representative

Charlene Barshefsky, is an example of how “governments are pursuing

strategic trade policies and, in some cases, preferential trading

arrangements, forming relations around us, rather than with us, and

creating new exclusive trade alliances to the potential detriment of

US prosperity and leadership.” The Enlargement Strategy: Driven by

Realpolitik But probably the most serious threat to making AFTA a

reality is the “enlargement” of ASEAN project that some elements in

ASEAN have designated as a priority. Enlargement would bring enormous

complications to AFTA. Unlike the Western European members of the EU

that are contemplating bringing in new economies into the Union, the

members of ASEAN have still to carry out the first phase of economic

integration via a free trade area. Yet they have moved quickly to

bring in four economies, Vietnam, Burma, Cambodia, and Laos, which are

quite different from the original six. All are at a much lower stage

of development and three of them are marked by a much greater role of

the state in the economy than the original ASEAN members. True,

Vietnam has already been admitted, but this is not the time to

 

complicate AFTA’s future even more. Cambodia, Laos, and Burma should

be admitted into ASEAN, yes, but only after there are, among other

conditions, substantive steps taken in the enormously complicated

phase of economically integrating the existing members. The

enlargement strategy is dictated by political considerations, and in

pursuing it, ASEAN courts a repeat of its earlier history. For it

was regional Realpolitik that sabotaged ASEAN’s earlier efforts to

move towards meaningful integration. From the late sixties to the

early seventies, the ASEAN governments were preoccupied with the Cold

War and the Vietnam War, where they were allied with the US. And in

the late seventies, in a move that went against the spirit of the

Bangkok Declaration, ASEAN allowed itself to become an anti-Vietnamese

alliance. Its program for economic cooperation was placed

indefinitely on the backburner as it became the most active backer of

the “Democratic Kampuchea” coalition (of which the Khmer Rouge was the

main component), following a common strategy with China and the United

States. Today, regional Realpolitik is again driving the enlargement

agenda. Bringing in Vietnam in 1995 was largely a strategic move to

strengthen ASEAN’s military capabilities vis-a-vis China–one which

was, incidentally, in step with the United States’ evolving strategic

policy of “containing” a country that is increasingly seen by

Washington as a rival regional hegemon. Burma and the Realpolitik of

Authoritarianism The current enlargement effort is centred on bringing

in Burma. It has been pushed mainly by President Suharto of

Indonesia, who has deployed a lot of effort and resources to this

enterprise, including his prestige as the “grand old man” of

ASEAN–the only chief of state who was in power when the formation was

established in 1967. Realpolitik is a major consideration in

Suharto’s moves, and this is the Realpolitik of authoritarianism.

Suharto is increasingly worried about the pressures for

democratisation in Indonesia, which he sees as being influenced by the

rising pressures for greater democracy throughout the region.

Bringing in more non-democratic regimes would strengthen the

authoritarian pole in the balance of power within ASEAN: it would

serve to neutralise the formal democratic regimes within ASEAN–the

Philippines and Thailand–and prevent them from following foreign

policies that would be more sympathetic to democratic movements on the

ground. Moreover, bringing in more authoritarian regimes would

create a solid front against external criticism of repressive

practices not only in Indonesia but in the majority of the ASEAN

states. Ideologically, “ASEAN brotherhood” is being defined as a

brotherhood of authoritarian states ranged against liberal democracy,

human rights, and other “western biases.” It is not surprising, then,

that the other authoritarian governments, notably Malaysia, Singapore,

and Brunei, have lined up strongly behind Indonesia. This

anti-democratic Realpolitik is working. Isolated, weak-kneed, and

almost ashamed of their democratic credentials, the Thai and

Philippine governments have allowed themselves to be pushed into

endorsing the majority position on Burma. And, with Burma in ASEAN,

opposition at the state level to the democratic current would be even

stronger. The Burma Issue and the Future of the ARF The authoritarian

Realpolitik promises to damage not only AFTA but another key project,

the ASEAN Regional Forum (ARF), which ASEAN hopes to make the

principal mechanism for the resolution of conflict and security issues

in the Asia-Pacific region. The ARF has a structure that might be

best characterised as one of concentric circles. The core or inner

circle is the ASEAN member countries, who have the initiative in

setting the agenda. The next circle is made up of the seven “dialogue

partners,” which include, among others, the United States, Australia,

and Japan. An outer circle is made up of Russia and China, ASEAN’s

“consultative partners,” followed by the periphery composed of “ASEAN

observer states,” namely Papua New Guinea, Laos, Burma, and Cambodia.

Making Burma a member of ASEAN would mean bringing an extremely

controversial actor from the periphery to the very center of ARF

decision-making, and this can only bring a great deal of opposition

and criticism from many of the key dialogue partners–opposition which

is justified, since the military-dominated SLORC is a totally

illegitimate regime that is in power in defiance of the clearcut

results of a democratic election. Burma’s central role in the ARF

will become the issue in the ARF, and this can only distract the forum

from pressing peace and security concerns, such as the Spratly Islands

dispute and the effort to gain the nuclear powers’ assent to the

creation of a nuclear weapons-free zone in the region. All this can

only erode the ARF’s credibility as an effective multilateral

security mechanism. Such a situation would play into the hands of the

powers that are suspicious and even unsympathetic to the ARF, like the

United States. Washington has often dismissed the ARF as a “talk

shop,” and its strategy has been to undercut its development as an

effective multilateral structure for conflict resolution, preferring

to limit the forum to serving as a weak adjunct to Washington’s

preferred security mechanisms in the Asia-Pacific region: its

bilateral treaties with East Asian countries and its 100,000 troops

deployed in land bases and ships. In sum, granting Burma

membership in ASEAN is an ill-advised move that the regional body

cannot afford at this point, since it would complicate even more the

already complex and challenging task of building AFTA and drive a

stake right into the heart of the ARF. It is partly for the reasons

laid out above, incidentally, that institutes of strategic studies

(the ISIS network) in ASEAN that were so influential in the formation

of the ARF are said to have recommended against the entry of Burma at

this time. ASEAN governments would be well advised to listen to their

arguments instead of plunging into a dangerous and foolish strategy of

enlargement that can only set back the realisation of ASEAN’s vision

of becoming a prosperous bloc of integrated economies that serves as

the hub of a peace and security framework for the Asia-Pacific region.

 

*Dr. Walden Bello is co-director of Focus on the Global South, a

program of policy research and analysis of the Chulalongkorn

University Social Research Institute in Bangkok and a professor of

sociology and public administration at the University of the

Philippines.

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FOCUS-on-Trade is produced by Focus on the Global South

(FOCUS). Contact information: c/o CUSRI, Wisit Prachuabmoh Building,

Chulalongkorn University, Bangkok 10330 Thailand. Tel: (66 2) 218

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Focus-on-Trade #16, end part 4 of 4

 

______________________________________________________

Focus on the Global South (FOCUS)

c/o CUSRI, Chulalongkorn University

Bangkok 10330 THAILAND

Tel: 662 218 7363/7364/7365

Fax: 662 255 9976

Web Page http://www.focusweb.org

Staff email addresses:

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