The Role of APEC

The Asia Pacific Economic Cooperation (APEC) forum has made a major
contribution to the spread of globalization with its adoption of the Bogor goals.
Achievement of "free and open trade and investment in the Asia Pacific" by
2010 or 2020 would further expand the gains from economic liberalization for
all economies in the region. Hence APEC should rededicate itself to the pursuit
of that objective and devise an effective strategy for doing so.

The globalization strategy of APEC to date has been incomplete, however. It

has failed to recognize fully that trade and investment liberalization, while
clearly in the overall interest of all of its member economies, levies costs on
some groups and individuals within each of those economies.

Globalization creates losers as well as winners. Bogor thus covered only half
the issue. APEC must address these concerns effectively, for social reasons and
to maximize the economic benefits from its liberalization program, but also to
minimize the political resistance to the pursuit of liberalization itself.
Hence APEC should adopt a Los Cabos target in 2002 of "shared prosperity in
the region" to parallel the Bogor commitment of 1994 to "free and open trade
and investment in the region." This would elevate the objective of equitable
development to a status fully equivalent to that of free trade and investment.
Implementation of this parallel goal would help counter the resistance to pursuit
of the initial Bogor objective. It would thus help restore APEC's leadership of
the overall globalization process, which has faltered badly in recent years due to
its failure to make progress toward its own liberalization goals.

Two types of measures are of paramount importance. First, those adversely

affected by liberalization-firms, communities, and especially workers-need to
receive transitional assistance to cushion their adjustment from one endeavour
to another. Like any dynamic economic change, expanded trade and investment
often cause dislocations that carry significant social as well as economic costs.
Since economies as a whole benefit substantially from the expansion of
international activity, they can and should share some of those gains with the
elements of society that are hurt by the process in the short run.

Three types of programs are worthy of consideration in this context. The more
traditional is unemployment compensation, which reimburses dislocated
workers for a temporary period while they seek new jobs. The more novel is
wage insurance, which covers part of the loss of worker income for a
transitional period if a new job pays less than the previous one. Other
possibilities include creating portable health and retirement plans so that
dislocated workers do not lose their basic benefits while shifting from one
occupation to another.

Second, national economies must empower their people to take advantage of

globalization rather than feel victimized by it. Workers will understandably
resist globalization if they feel unable to shift into the new opportunities that it
creates. APEC economies must therefore upgrade the skill levels of their work
forces via better education systems in general and improved worker training
programs in particular. The resultant improvement in flexibility of the labor
force will enhance national productivity growth as well as assure individual
workers of their ability to benefit from further liberalization.

This two-fold strategy responds to the two-fold concerns of those who fear
globalization: through the creation of strong safety nets to smooth adjustment in
the short run, and through improved education and training to seize the
opportunities presented by more open markets in the long run. All APEC
economies should commit themselves, at Los Cabos in 2002, to adopt such
strategies. They will then be in a far stronger position to achieve their long-
standing commitment, adopted at Bogor in 1994, to achieve free trade and
investment in the region by 2010 or 2020.

The policies that must be adopted to fulfill such a commitment are primarily
domestic. It is up to each APEC member economy to put in place the necessary
safety net and education/training programs. APEC can nevertheless help
promote the process, perhaps decisively, by:

 Focusing attention, at the highest political level, on the need to adopt

such programs as an essential complement to liberalization;
 Thereby strengthening the position of pro-adjustment (and hence pro-
liberalization) forces within each economy;
 Creating mechanisms for APEC-wide sharing of the experiences of
individual economies, fostering the development of "best practices"
benchmarks for policy measures such as unemployment insurance,
and publicizing examples of what works and what doesn't;
 Laying a foundation for the extension of technical assistance from
one economy to another, especially to help spread successful
techniques that have proved to be effective in these policy areas;
 Encouraging external financing from existing sources, such as the
World Bank's generous funding for social safety nets in numerous
parts of the world; and
 Thereby helping restore confidence in both APEC itself and its
member economies, by confirming that their original liberalization
 commitments were both substantively correct and politically viable,
which will in turn restore the virtuous cycle of dynamic growth and
adjustment that has marked most parts of the region for most of the
postwar period.

APEC has an opportunity to take a major step forward at Los Cabos. It can
adopt a major new "Los Cabos target" that will supplement, complement, and
indeed complete the strategy that was originally launched at Bogor almost a
decade ago. It can thus simultaneously expand its outreach to groups that have
been skeptical of its concern for the disadvantaged and dramatically broaden its
political appeal, reinvigorate its own institutional momentum, and reassert
leadership of the globalization process. Adoption of the parallel theme of
"shared prosperity for all" can usher in a new era of dynamism for APEC and
stamp Los Cabos, along with Bogor, as key milestones in APEC's march toward
full achievement of "a community of Asia-Pacific economies."

FUNCTIONS OF APEC

There are three main functions that APEC focuses on:

Trade and Investment Liberalization: In this area, APEC works to reduce

tariffs and remove other obstructions to free trade.

Business Facilitation: In this area, the goal is to facilitate business interactions

between member nations by reducing the cost of doing business, sharing trade
information and improving the relationships of importers and exporters.
Economic and Technical Cooperation (ECOTECH):This program includes
opportunities for member nations to improve training and education in
international trade.

STRUCTURE OF APEC

APEC climate agreement a 'diplomatic

breakthrough'

LinkedIn and Apec announce the signing of a unique partnership joining the
world leader in online professional networking and the French specialist in
career management. French professionals can now benefit from the services of
Apec combined with the knowledge of a network used by more than 19 million
people the world over, thanks to the power of the LinkedIn network and the
guidance of Apec.

According to Gabriel Arter, President of Apec, “Since our beginnings, the use
of networks has played a central role in the guidance we give to executives.
Today, we are taking an important step: we are the first, through our site, to
offer our clients access to the full capacity of their professional network on line,
and to give them the keys to use it effectively.”
 Reid Hoffman, Chairman of LinkedIn, states “Today, we are accelerating our
development in Europe and notably in France. With this innovative partnership,
we aim to provide access to the full power of our services while enabling
French members of Linkedln to take advantage of the expertise of Apec.”

As of March 11th, Apec clients will be able to sign up to LinkedIn via apec.fr.
A complete French version of LinkedIn will be available later this year.

LinkedIn has established itself as the world leader of professionals on the

internet. It is the most powerful network in terms of the number of users, and it
provides an international dimension to the careers of its members. As a tool for
professional life, it delivers a range of services which are constantly enhanced.
Finally, it provides the most advanced and the most complete range of services
available via free access. By means of its dedicated site, members are able to:

 Maintain, enhance and develop their network

 Increase their visibility into marketplace trends
 Benefit daily from the wealth of information and expertise available in
their network

With this partnership, Apec goes well beyond basic access to the professional
network site of Linkedln. It will integrate many core functions of LinkedIn with
the apec.fr website. Moreover, Apec will provide executive clients who have an
account on apec.fr with the possibility of enhancing their use of the LinkedIn
network and creating bridges between their field of activity, their market, and
their existing or potential network.

 They will have the ability to identify exactly, from the moment an
employment offer is broadcast by Apec, those members of their network who
work in the company concerned, or who work in the same field.
 Likewise, they will be able to research their potential market in detail, by
accessing their network, as well their files entitled “Sectors”, “Companies” and
“Countries”
 Finally, they will be able to see their LinkedIn member updates,
(exchanges between members, offers of employment, connections.
 IMPLICATIONS FOR INDIA

India has much to gain by joining APEC but what could it contribute? There is
little evidence yet that it has a world view or an Asia-Pacific view. Much of the
hype on India’s economy is based on hope that Indians will gain confidence to
compete in world markets, and that the central government, handed a mandate
to govern in the May 2009 elections, will tackle the binding constraints on
India’s long term growth: a population that is only 60 percent literate; persistent
government deficits; restrictions on land, labor and finance and abysmal
physical infrastructure. Infrastructure bottlenecks are being cleared, the private
sector is helping address illiteracy and restrictions on FDI inflows are being
dismantled as Indian corporations gain confidence. But farmers and others still
lack confidence to reduce outdated trade barriers.

APEC is at a ‘hinge’ in its history. Beginning with the Singapore meeting

APEC has a five-year window when it could make major strides forward on
economic integration and political dialogue as Japan takes the chair in 2010,
followed by the United States in 2011 and Indonesia in 2013. Its unique
potential relative to the many ASEAN-linked regional forums is to be a channel
for deeper trans-Pacific ties including US engagement in regional projects.

India will be a positive contributor to APEC if it balances APEC’s goals with its
own domestic preoccupations and security challenges. India’s recent agreement
with China on combating climate change is a step forward in bilateral
cooperation. With India a member, APEC should set up a steering group
consisting of the four giants and G20 members (Australia, Canada, Indonesia,
South Korea, Mexico and Russia) to develop a strategic agenda for regional
initiatives while ensuring their coherence and linkage with global priorities.