The Asia Pacific Economic Cooperation (APEC) summit, meeting on November 15 in Jakarta, will be discussing proposals for the removal of all barriers to free trade between the 16 participating countries by 2020, and possibly by 2010 for the developed countries of the group. JENNIFER THOMPSON of 91×ÔÅÄÂÛ̳ Weekly spoke to Dr WALDEN BELLO, a senior analyst at the Institute for Food and Development Policy (Food First) in California, currently touring Australia for Community Aid Abroad.
Could you comment on how Asian economies will be affected generally by these APEC proposals of trade liberalisation?
It's fairly clear that many of the Asia Pacific countries are very wary about this free trade vision or bloc that the United States and Australia have been pushing in the Pacific. I think that although Australia was initially seen as the father or mother of APEC, increasingly the United States has taken it over and really pushed very hard to establish a regional bloc that would be governed by free trade.
What people have seen APEC as, in the Pacific, is the Americans pushing their economic interests via the free trade agenda. That sort of agenda is meant mainly to support the re-penetration of the region by American corporate capital and by American goods so that the United States can gain a pre-eminence that it lost in the 1970s and 1980s. There is a fear that US capital, particularly in services, will become very big and that there would be a displacement effect by US goods and especially that agriculture would be dominated by US products.
This free trade agenda carries a lot of ideological implications that might lead to the dismantling of particular relationships, many protectionist, that were created between Asian business and governments. They fear that this rhetoric will dismantle these mechanisms that have been responsible for their growth.
Your work has dealt with social and environmental problems in Asian countries. Can you describe some of these and their causes?
Generally the problem has been the development model that has been followed in the Asia Pacific. It is not a free trade model but a very close relationship between government and business that's built around the state guidance of growth and protectionism of the domestic economy.
While there have been some positive aspects to this model, it has had a lot of negative consequences, including the decline of agriculture. Agriculture in Korea and Taiwan are on their last legs at this point. This is because agriculture has been used to fuel the growth of manufacturing industry through a transfer of resources from agriculture to industry.
You've had universal ecological degradation from Korea to Taiwan to Thailand, where the first stage of growth was based on the export of natural resources. This now makes the environmental problems of massive industrial pollution, and the third problem is increasing inequality of income.
The top 10-15% of these countries have cornered a larger part of the income than they did 20 or 25 years ago. The strengthening of political repression, particularly in countries like Singapore and Indonesia, goes against the notion that the income pie increases and that will mitigate class conflict. That's not happening.
At the same time, in many of these countries many people are starting to feel that they have a very fragile industrialisation process. They see the ecological devastation and that maybe this is buying present growth at the expense of future generations. I think there is this sense in Taiwan particularly that super-industrialisation has rendered the island unlivable, which continues to be manifested in high emigration from Taiwan to Australia, the US and Canada.
A lack of confidence in the future of the economy is pervasive in this region. There's also a sense that industrialisation is not guaranteed because of the massive technological dependence on Japan. Describing many of these economies, one could say that it's been very difficult for them to graduate from being merely labour-intensive assembly platforms for Japanese components using Japanese technology. The Taiwanese and the Koreans have woken up and said: Whoa, we are now more technologically dependent on Japan than when we began our industrialisation process 25 years ago.
Over the last few years, one very important thing has been the regionalisation of the Japanese economy. The economies of the region have in many ways become integrated around the needs of the Japanese economy.
How do you think this process relates to GATT?
Asia Pacific elites have been using business mechanisms that are to a great degree protectionist. GATT will make it easier for American capital to become a major investment and trading presence again in the Asia Pacific. The Americans are behind GATT precisely because it opens up the Asia Pacific economies to them.
Among the more important provisions of GATT are those around intellectual property rights; that serves principally the interests of American corporations to check the cloning and unauthorised borrowing of their technology by Asian firms.
GATT also has a very strong services agreement which requires that countries give American and other foreign companies exactly the same treatment in those industries as is given to local investors. So GATT basically would have a very strong role in reasserting US corporate and trade presence in the Asia Pacific.
There doesn't seem to be general agreement amongst the participating countries. Indonesia only recently has thrown its support behind the process, and Malaysia is opposing it outright. Can you talk about some of the differences?
I wouldn't put too much on Indonesia's role here. There's a lot of protectionist sentiment in Indonesia, and Suharto's just sticking up for free trade because basically he's hosting it plus he has this idea about his hosting APEC enshrining him as a big leader. Basically I think Indonesia's much more protectionist than free trader at this point, and after this conference I doubt that you'll have the Indonesians pushing for APEC to become a free trade area beyond just rhetoric.
Malaysia of course is very much against it, but everybody is except Australia, the US, Canada, Mexico and maybe Chile. Most of the Asia Pacific countries, although they do not articulate it as much as Mahathir, really want to slow down the process. They want to have a regional consultative forum, but they don't want to start putting down the rules of free trade.
I think that the most significant block to APEC is not the Malaysians; it's the Japanese. They really have a very different design: they have integrated the region through investment as opposed to trade, and APEC will not serve their interests. They're quiet and would much rather quietly sabotage the whole thing; they'll leave the railing to persons such as Mahathir.
There hasn't been a lot in the Australian press about opposition to the proposals being put forward from community and worker groups. Can you comment on that type of opposition?
I don't think there has been that much grassroots opposition to APEC because the opposition has mainly been undertaken by business and government elites. Groups in the Philippines are more concerned about things like GATT, because GATT is in its final stages of ratification. There's a much more critical movement in the Philippines around GATT than you have in Australia.
A number of community groups, grassroots groups and alternative groups in Indonesia and the Philippines and throughout the region are trying to establish a different design for trade that would counter the APEC vision. Many of the groups are concerned with human rights and governments using APEC to legitimise their human rights and political records. Resistance is more on how do you unmask the Suharto government and prevent it from using APEC to clean its bloody record.