Alphabet Soup

1. Alphabet Soup Jesse Bohnet Mike Smitka May 19, 2000 - Economics 286

2. The International Order • Trade & intl finance issues • Establish and encourage adherents to behavioral norms • Crisis intervention • Security • Multilateral arrangements to enhance security • Crisis invention • Misc: world "public goods" (environment)

3. Europe • EU and predecessor organizations • Built upon natural trade ties among European economies • Large role of (united) Germany • NATO: in inverse order of importance? • Kept Russians out • Kept Americans in • Kept Germans down

4. The Americas • Informal dominance by US • NAFTA including possible expansion • Monroe doctrine for security • Clear hegemonic status meant formal organizations were not as central • In a crisis, clear US interest in intervention

5. Asia - trade • No clear economic power • Neither Japan nor the US nor (now) China dominate • Tremendous diversity of interests • Initial and varied ex-colonial focus in 1950s • Indonesia --- the Netherlands • Vietnam - Laos - Cambodia --- France • HK, Malaysia, Singapore --- Britain • Philippines, Korea, Japan --- US • China, Russia --- autarky

6. Asia - security • Security: issues • No unifying external threat (Russia . . . India?) • Internal rivalries and flashpoints • US ambivalence to playing a role: unrealible? • Old organizations failed • SEATO ended with US exit from Vietnam • ANZUS ended with New Zealand pacifism • US presence in Philippines ended with Marcos

7. Global economic framework • The GATT and WTO • MFN as foundation • Reciprocity as process • More awkward as membership expanded • Enforcement? - WTO provides adjudication . . . • UN • Global goals, but limited enforcement tools • Difficulty in acting • IMF - few resources

8. The EU • European Union • Political goals • Economic means • Lowering of internal trade and capital / labor restrictions • In turn, setting of common external trade rules • Does the ROW benefit?

9. Trade diversion & creation • EU enhances trade within Europe • Specialization increases, and incomes with it • Higher incomes create expanded trade opportunities with the ROW • EU diverts trade to within Europe • Fewer barriers leads to shift from trade partners outside the EU to trade within the EU • Higher external barriers accentuate - would they choose the politically easy route of imposing the highest existing member barrier to the whole EU?

10. EU and APEC • Fears of trade diversion from a "Fortress Europe" • APEC founded in part as a not-so-subtle counter to any untoward European behavior • In the end, those fears were not realized • So what then is APEC? • Is the Pacific Basin a natural unit? - data and details follow!

12. APEC (Asia-Pacific Economic Cooperation)

13. APEC(Asia-Pacific Economic Cooperation)Basic Facts • Established in 1989. • As of today, there are 21 countries in the organization. • Combined GDP of $16 trillion US dollars. • Accounts for 42% of global trade. • Meet annually to discuss business.

14. GDP Growth 1989-1998

15. APEC’s share of global trade

16. First five conferences produced a lot of talk but no action Main issues revolved around membership Three China compromise ==> China, Taiwan and HK! 1994-Bogor, Indonesia set definite goals for the future 1995-Osaka, Japan Osaka Action Agenda TILF Account opened Annual Meetings

17. Annual Meetings (II) • 1996-Manila, Philippines • MAPA • 1997-Vancouver, Canada • Customs Modernization • WTO participation

18. Annual Meetings (III) • 1998-Kuala Lumpur, Malaysia • Cooperative growth strategy to end crisis • Programs to facilitate skills upgrading/ improvement • 1999-Auckland, New Zealand • APEC Food System • Banking standards developed • Reaffirmed Bogor goals, prioritized trade

19. APEC Fora • Committee on Trade and Investment • Economic Committee • ECOTECH Sub-committee • Budget and Management Committee • Policy Level Group on Small and Medium Enterprises • Fisheries Working Group • Human Resources Development Working Group

20. APEC Fora (cont..) • Industrial Science and Technology Working Group • Marine Resource Conservation Working Group • Telecommunications Working Group • Tourism Working Group • Trade Promotion Working Group • Transportation Working Group • Agricultural Technical Cooperation Experts Group

21. APEC and trade • Hope that smaller membership makes achieving liberalization easier • Focus on trade facilitation and on "public goods" issues separate from tariffs and NTBs (non-tariff barriers) • Results? • Not much • But low expectations

22. APEC and security • Never a formal topic at APEC • However, always a behind-the-scenes issue • ARF as developing security forum • Southeast Asia focus but includes as observers: • China - distrusted and weak • Japan - pacifist and narrow interests as "follower" within US-Japan security treaty • US - disinterested but strong

23. APEC: Links &c. • APEC Secretariat in Singapore • US site for APEC (Dept of State) • Columbia University site • PECC (Pacific Economic Cooperation Council) • PBEC (Pacific Basin Economic Council) • ASEAN and ASEAN Regional Forum

24. Glossary... • ASEAN - Association of Southeast Asian Nations (a trade / political organization) • ARF - ASEAN Regional Forum (in'tl security forum, including the US, China and Japan as observers) • ANZUS - Australia - New Zealand - US, a defunct security pact • CBM - confidence building measure

25. Glossary, cont • SEATO- Southeast Asia Treaty Organization, a defunct counterpart to NATO (North Atlantic Treaty Organization) • ESCC, EEC - European Coal & Steel Community, European Economic Community: predecessors to the EU • EU- European Union

26. Glossary,cont. • FTA- US - Canada Free Trade Agreement • NAFTA- North American Free Trade Agreement, successor to the FTA to include Mexico • GATT- General Agreement on Trade and Tariffs. Included the Kennedy Round, the Tokyo Round and a final Uruguay Round • WTO- World Trade Organization,successor to the GATT