Monday, September 03, 2007

Saturday Forum: Australia had to create APEC because Japan could not

The former Prime Minister Paul Keating says APEC is “the most important table we sit at”. His successor John Howard says the leaders who will be attending in Sydney on Saturday and Sunday account for more than half of world GDP and nearly half of world trade.

The Asia Pacific Economic Cooperation Forum is the kind of leaders club from which Australia might normally expect to be excluded, but in the case of APEC our place at the table is no accident. In fact, without Australia, APEC would probably not have come about.

In a speech in Sydney last week Paul Keating attempted to portray himself as the father of APEC, but the title really belongs to his predecessor Bob Hawke.

A specialist in international organisations at Tokyo’s Waseda University, Dr Takashi Terada says Hawke took the lead in pushing for APEC because Japan could not...

In the late 1980’s many of the certainties that had been good to Japan were breaking down. Its Asian neighbours were becoming commercial competitors rather than clients, communism was imploding in Europe and under strain in China, and perhaps most worryingly of all, the US was entering into a Free Trade Agreement with Canada.

Japan’s Ministry of International Trade and Industry wanted to talk to the countries in the region, perhaps to form a trade block with them, but it couldn’t do make the approach.

Terada recounts a meeting between Shigeo Muraoka of MITI and Australia’s Minister for Trade Negotiations Michael Duffy in December 1988.

He says Duffy asked Muraoka why Japan needed Australia’s help to set up an organisation that would allow it to talk to its neighbors.

Terada says Muraoka replied “explaining Japan’s difficult position due to its wartime attempt to create the Greater East Asian Co-Prosperity Sphere”.

The world’s second-biggest economy had no real history of liaising with its neighbors except through force.

Paul Keating revealed last week that he had been stunned to learn as Prime Minister than none of Japan’s Prime Ministers had never met any of China’s leaders.

He said Kiichi Miyazawa, perhaps Japan’s best-known international leader on the international stage, asked him over dinner to describe the personality of China’s leader Li Peng who Miyazawa had never met and then asked Keating whether he thought “the Chinese would attack us”.

Keating said both questions sent a political shiver through his spine. He had to bring the two leaders together.

APEC had been in existence for three years at the time, but as a meeting of ministers rather than world leaders.

Japan could not have set it up, but Australia which had reached out to Japan at a time when it was otherwise friendless after the second world war was in the perfect position to act as a go-between.

Terada quotes an Australian Foreign Affairs official as telling him that in 1988 the two nations formed the view that a “small non-threatening country like Australia” had to launch the initiative because Japan itself could not.

Bob Hawke was especially well placed to do so. While Australia was indeed regarded as small and non-threatening by many of its neighbors, it had also been regarded as protectionist, and therefore not on their side. Its high tariffs kept out their goods.

But Hawke was in the process of dismantling Australia’s tariff barriers. He was also an internationalist. In his earlier job as President of the ACTU Hawke had taken an active part in meetings of the International Labour Organisation. As Prime Minister he had attended every Commonwealth Heads of Government meeting and all but one Pacific Forum meeting.

The man who talked about achieving “consensus” during summits at home felt just as confident in his ability to do so abroad. A few years earlier he had helped set up the Cairns Group of leading agricultural exporting nations.

Hawke announced his plan on a visit to South Korea in January 1989 saying “the time has come for us substantially to increase our efforts towards building regional cooperation and seriously to investigate what areas it might focus on and what forms it might take”. He said later he was surprised to discover just how enthusiastic South Korea was. Like China, its leaders had had little peacetime contact with their neighbour Japan.

The first APEC meeting was held in Canberra at the Hyatt that November. It wasn’t the high-security affair that APEC meetings later became because the leaders were not there. But the foreign ministers and trade ministers were. Getting together ministers from 12 countries some of whom had never met was an immense achievement.

Under Paul Keating from 1993 the APEC meetings were attended each of the nation’s leaders. There are now 21. Keating says he wanted the meetings to focus on big geopolitical issues, but that the US President Bill Clinton would only take part if they focused on trade.

Ever since there has been an uncomfortable if useful ambiguity about what the meetings are for. At times they happen to have coincided with major world events. The first, in Canberra, took place months after the Tienneman Square massacre in China and a few days before the collapse of the Berlin Wall. Later APEC leaders meetings took place as Australia and other UN nations were preparing to intervene in East Timor and after the World Trade Centre bombings in 2001. Last year’s meeting in Vietnam took place amid a crisis involving North Korea.

On Monday in a talk to the Lowy Institute John Howard set out his goals for this meeting.

He said a lot would be achieved by the mere act of getting together.

Just as it was important for China and Japan to get their two leaders into the same room at the same time it will be important for Australia to have a Russian leader on Australian soil for the first time. John Howard says he hopes Vladimir Putin will sign a safeguards agreement which will make it easier for Australia to sell Russia uranium.

Howard has invited Canada’s Prime Minister Stephen Harper to address Australia’s parliament in the week after APEC. He will be the first Canadian leader to do so.

George Bush will take part in a three-way meeting with Howard and Japan’s Prime Minister Shinzo Abe and over breakfast on Saturday and then update all of the leaders on the latest US thinking about Iran and Iraq.

The theory is that by meeting face to face the leaders will can achieve the sort of breakthroughs their officials can not.

Often they are breakthroughs in attitude.

By encouraging each other to support to cause of free trade over the 1990s the APEC leaders helped encourage China to make the changes needed to join the World Trade Organisation.

Trade, international security and strategies to deal with natural disasters will again be important topics for discussion in 2007, but they are likely to be overshadowed by the Prime Minister’s big-ticket item – climate change.

Several of his ministers call themselves climate change sceptics, John Howard calls himself a climate change realist, and for a decade he has resisted signing the Kyoto protocol.

But in Sydney next week John Howard will attempt to take his fellow leaders where Kyoto would not.

He makes the point that the APEC nations with no obligations to limit pollution under Kyoto account for half of APEC by GDP and 40 per cent of global emissions.

He has put climate change on the addenda in an attempt to get them excited about taking action in the same way as earlier APEC meetings got them excited about free trade.

Howard says there will be no hard and fast targets – that’s not what APEC is about. But he will ask the leaders to agree for the first time that the post-Kyoto agreement should include “a long-term aspirational goal” for cutting emissions – a commitment that sounds as if it is straight out of the Howard phrasebook, but one that would represent a real achievement and could even become a lasting legacy.

Howard says an APEC-style approach would be to recognise that different nations need to react to climate change in different ways (“what works for Australia may not necessarily work for Thailand”) and that it is important for worldwide economic growth that the late developing economies of China and Indonesia continue to be able to grow.

He hopes to commend to them the carbon trading scheme devised by Warwick McKibbin at the ANU as well as Australian-developed low emission and so-called “clean coal” sequestration technologies.

But it would be wrong to describe the APEC leaders’ meeting as a trade fair.

It is a rare opportunity for the leaders of the world’s most dynamic economies to mix and speak freely without the legalistic constraints of forums such as the United Nations or the World Trade Organisation.

APEC happens to include nearly all of the world’s fastest growing economies, with the obvious exception of India which has been excluded because it is in the Indian Ocean rather than the Pacific.

It many respects its leaders are leading the globe into the future.

It is extremely important they get together to talk, and it might never have happened at all were it not for this year’s host – Australia.