The 12th Asia Pacific Economic Cooperation (APEC) leaders' meeting will be held in Santiago, Chile from November 20 to 21, with the theme "our community, our future." The annual summit is considered an important event for the Asia-Pacific region and the world as a whole. 

It has been 15 years since APEC was founded in 1989. The Asian financial crisis in 1997 significantly diminished its momentum to boost free trade. It now only plays a role in promoting World Trade Organization (WTO) negotiations.

It is, therefore, safe to say that APEC has yet to rise out of its nadir.

The next six years will be a very critical period for APEC.

Under the terms of the Bogor Goal, agreed in the 1994 Economic Leaders' Meeting in Bogor, Indonesia, APEC is to achieve free and open trade and investment in the Asia-Pacific region by 2010 and 2020 for industrialized and developing economies.

The Bogor Goal is not only the goal of APEC but also its soul. It will be realized through the specific approach of APEC, namely, the common promise of the leaders of its member economies.

If it can be achieved as scheduled, APEC could enter a period of rapid development.

There are some who suggest a postponement of the deadline would be better.

The timetable should not be revised since changing it would delay the process of free trade and investment and dampen members' confidence.

Giving up the Goal means to give up APEC's soul.

In fact, the current tariff rate for developed members is already very low. The next 14 years is also quite a long transitional period for developing members to realize the lowest or a zero tariff rate. In addition, most developing members have joined one or more Free Trade Agreements, whose timetable for realizing the lowest or a zero tariff rate will probably not be later than 2020, demonstrating that both developed and developing members are able to realize the objective set by the Goal. So why should the timetable be postponed?

If there is some difficulty, the standard for "free trade" could be lowered, which would be much better than postponing the deadline.

A sort of retrogression, prolonging the timetable, could also send the wrong signals to the WTO and have a negative impact upon its process. There will be no way out for APEC unless it keeps going forward.

The APEC approach, based on "concerted and independent actions," is a new regional cooperation system, which differs completely from that of the WTO. It has been proved effective in uniting the 21 members for 15 years.

Undoubtedly, such an approach also has no binding force. All the results of negotiation are implemented by the members voluntarily and willingly.

There are voices calling for reforming the APEC approach. Under the current circumstances, however, it should instead be maintained and reiterated since its effectiveness has been proven in the past. APEC is an international forum by nature. This nature is decided by the plurality of the Asia-Pacific region and the differences between its members.

Though in the long run it will be possible for APEC to form a mechanism in certain fields, if its members can reach consensus, the conditions for setting up such a mechanism are far from mature.

Since its establishment, APEC has adhered to the principle of excluding political and security issues, a position shared by most of its members.

But with the changing global and regional situation since the end of last century, new political and security issues have emerged one by one and there has been an outbreak of global terrorist incidents. This has had a great impact upon APEC and world economic development. The APEC leaders' meeting has started getting concerned with major political and security events and to make rapid responses.

The 1999 APEC Foreign Ministers' Meeting informally discussed the issue of East Timor, which was the first of its kind in APEC history. Fighting terrorism also topped the agenda of state leaders and foreign ministers during the 2001 APEC meeting in Shanghai in the wake of the September 11 attacks.

But as a regional economic cooperation organization, it should not put its focus on political and security issues. Otherwise, its function of promoting trade, investment liberalization, economic and technical cooperation will be weakened.

The international economic situation is quite different from 15 years ago.

In the first eight years since its birth, APEC was at its strongest. But in the following seven years, the 1997 Asian Financial Crisis and the failure of its Early Voluntary Sectoral Liberalization plan (EVSL) and the slowdown of the liberalization process, APEC gradually lost its luster.

As a regional economic cooperation organization, APEC is of course not as important as the WTO. Since it has been devoted to promoting a new round of negotiations with the WTO, no other international organization but APEC could have such large influence on the world trade body.

The question is whether APEC will still be relevant when the new round of negotiations is concluded. Furthermore, more and more regional cooperation mechanisms have emerged in the Asia-Pacific region, posing a serious challenge to it.

Are there, then, any prospects for the future development of APEC?

APEC needs to be reformed by strengthening coordination mechanisms, reducing meetings and activities and placing economic and technical cooperation as its major mission.

The developed members should set examples for others in realizing trade and investment liberalization and assist the developing members in economic and technical cooperation, a function the WTO lacks. Even when the Bogor Goal is achieved, APEC could continue to develop in economic and technological cooperation.

Before China became a WTO member in 2001, APEC was the only international economic organization that China joined. China has now also become a member of some of East Asia's sub-regional cooperation mechanisms.

But APEC is still vital to China.

The Asia-Pacific region is the most important region for China's foreign trade. If trade and investment are freed up in the APEC region, China could benefit a lot.

APEC is also an important stage for China to promote its own image and foreign policy. Its annual leaders' meeting has provided an important channel for Chinese leaders to exchange views with other major powers such as the United States, Russia and Japan.

As a major member of APEC, China will continue to participate in its activities and implement the Individual Action Plan, making its own contribution to realizing the Bogor Goal.

(China Daily November 15, 2004)