Toward a Pacific Basin Community—Slowly

TOWARD A PACIFIC BASIN. COMMUNITY—SLOWLY Richard Holbrooke and Maria Zammit .he concept of a pan-Pacific economic organization has recently captured the imagination of many scholars, journalists, business groups, and Asian-related organizations. The tempo of discussion on the subject has quickened to the point where it has now become a leading Asian glamour issue. The area's remarkable economic growth has garnered the attention of the West, and the region's developed countries are trying to institutionalize the process. In spite of the upsurge in popularity of a Pacific Basin Community (pbc), however, the concept is not new. Although analysts may debate its precise moment of birth and legal parentage, it is possible to trace the development of the Pacific community theme—through its various permutations—back to the 1960s. As early as 1967, business executives from Australia, Canada,Japan, New Zealand, and the United States established a Pacific Basin Economic Council, which currently comprises more than 400 companies and focuses primarily on increasing business and investment in the Pacific Basin. A few years later the United States began exploring a regional trade organization, and in 1979 the Congressional Research Service submitted its Evaluation of a Proposed Asian-Pacific Regional Economic Organization, which examined U.S. participation in the Organization for Pacific Trade and Development (optad). Japan officially became a leading advocate of a pan-Pacific association in 1978 when Prime Minister Masayoshi Ohira announced his interest and support for such an organization. Since then, the momentum for a pbc has been supplied Richard Holbrooke was assistant secretary of state for East Asian and Pacific affairs from 1977 to 1981. He is currently vice-president of Public Strategies, a Washington, D.C—based consulting firm. Maria Zammit is assistant director for policy analysis at Public Strategies. She received her M.A. from SAIS in 1982. 61 62 SAIS REVIEW primarily by Japan and Australia, which jointly organized an important Pacific Community seminar in Canberra in September 1980.1 South Korea, Chile, New Zealand, and Taiwan have also joined in the conferences and studies. Whether or not one believes a formal organization is the next logical step, the economic achievements of the Asian-Pacific region have been nothing short of outstanding. It is this explosive growth, as much as the gradual lessening of tensions in most of the region, that has given impetus to discussions of a Pacific Basin Community. Growth rates in the region have been breathtaking. From 1970 to 1981 average annual gdp growth rates in East Asia and asean2 (Association of Southeast Asian Nations) ranged from 6.2 percent for the Philippines to 9.9 percent for Hong Kong. Japan, with a "mere" 4.5 percent average annual growth, still easily outpaced the United States' 2.9 percent. In 1981, when the gnp in European oecd (Organization for Economic Cooperation and Development) countries declined by 0.2 percent, the non-Communist countries of East Asia grew at an average rate of 5.8 percent. Even in 1982, when growth rates dropped significantly , both low and middle-income Asian countries outperformed developing countries in all other regions of the world by a wide margin.3 Unlike Europe, where growth has become stagnant, the Pacific region has become the world's economic pacesetter. Innumerable books and articles have already been written on "the Asian challenge" to European and American economies. But along with these challenges have come opportunities for many of the nations bordering the Pacific to share in the region's prospects for growth. Already intra-Asian trade has grown rapidly, and Latin America has now become a significant new market for the region's products. Japan's trade within the region equals its trade to the United States (22 percent) and more than twice the amount of Australia's trade with the United States (17 percent) is directed toward the Pacific (38 percent). The United States' economic ties to the region are just as impressive. Since 1977 we have had a volume of two-way trade with East Asia (defined to include Japan, China, Southeast Asia, and Oceania) that is larger than our trade with Western Europe. For the first eight months of 1983, the figures...