APEC as an Institution: Multilateral Governance in the Asia-Pacific

6. The APEC Decision-Making Process for Trade Policy Issues: The Experience and Lessons of 1994-2001

The APEC Decision-making Process for Trade Policy Issues 85 By: ROS Size: 6" x 9" J/No: 03-10509 Fonts: Bembo 6 THE APEC DECISION-MAKING PROCESS FOR TRADE POLICY ISSUES The Experience and Lessons of 1994–2001 JOSEPH M. DAMOND Introduction This chapter examines theAPEC decision-making process,with particular focus on how it has worked in recent years with respect to trade issues. In studying the decision-making process, I will assess it with respect to three questions: first, where do new initiatives come from, and how are they advanced in the APEC process; secondly, how is consensus reached with respect to these initiatives, and what does that consensus mean; and thirdly, how, and how well, are decisions implemented. The analysis begins with a brief exposition of APEC decision-making institutions, and their relationship, at least in principle, to one another in a typical annual APEC cycle. I then proceed to examine how these institutions have actually functioned to generate new initiatives, build consensus around them, and implement them. On the basis of this analysis, I draw some conclusions and recommendations about the process. 04a APEC Ch 6 4/9/03, 1:11 PM 85 86 Joseph M. Damond By: ROS Size: 6" x 9" J/No: 03-10509 Fonts: Bembo The analysis of these questions draws largely from my personal experience as the U.S. representative to the Committee on Trade and Investment (CTI) in 1997–99, which also involved being one of a small team of staff to the United States Trade Representative (USTR) on APEC issues, and my experience as Chair of the Committee on Trade and Investment (CTI) in 2000 and 2001, which gave me a particularly good vantage point to be involved in and observe the staff and Senior Officials process. In addition, I will draw on my knowledge of the decision-making process just prior to my personal involvement in APEC,during 1994–96. Since these years were particularly successful in producing significant decisions, they can help explain the institutional factors behind APEC’s success. At the same time, they provide a useful contrast to the years 1997–99, which were dominated by the Early Voluntary Sectoral Liberalization scheme, or EVSL. The EVSL itself was one of APEC’s most ambitious efforts, an attempt to build upon the heady successes of the preceding years. However, elements that made APEC successful in those years proved lacking during the EVSL period, as will be demonstrated. Moreover, the EVSL experience itself has cast a long shadow over decision-making since 1999, and affected the way work proceeded in 2000–2002. In describing the decision-making process during these three periods — pre-EVSL (1994–96), EVSL (1997–99) and post-EVSL (2000–2002) — I will pay particular attention to the key APEC institutions involved in decision-making, and explore the degree to which the functionality of these institutions affected the decisionmaking process. On balance, it appears that much steam has gone out of the APEC trade policy-making process in recent years, potentially undermining APEC’s credibility and relevance in this area. APEC can regain the momentum that it attained in the mid-1990s,but it will require sustained interest and effort at the Leaders’ and Ministerial level, which includes ensuring that their Senior Officials and other trade officials faithfully implement the vision set forth at each year’s meeting. APEC Decision-Making Institutions and the Annual Cycle TheAPEC trade policy process operates on four main levels.In ascending order,they are:the Committee onTrade and Investment and its sub-fora; the Senior Officials’ Meeting (SOM); Ministers (principally the Trade Ministerial meeting in mid-year and the Joint Ministerial (Trade and Foreign Ministers) meeting at year’s end; and the APEC Economic Leaders’ Meeting (AELM). 04a APEC Ch 6 4/9/03, 1:11 PM 86 The APEC Decision-making Process for Trade Policy Issues 87 By: ROS Size: 6" x 9" J/No: 03-10509 Fonts: Bembo In any APEC year (that is, during the annual tenure of an APEC host economy),the Senior Officials process is central to the development of new initiatives. New initiatives are usually unveiled at the Senior Officials level, including trade-related initiatives.APEC members prefer to raise new ideas at the SOM instead of the CTI to gain visibility, to ensure that they are taken seriously as political as opposed to merely technical proposals. However, the...