Before there was Apec (Asia Pacific Economic Cooperation), there was the PECC - the Pacific Economic Cooperation Council.
When the PECC had its inaugural meeting at the Australian National University in Canberra in September 1980, neither the People's Republic of China (PRC) nor Hong Kong was a member. Nor was Taiwan.
Some academics had quite a say in the founding and development of the PECC, which was on the surface a trilateral set-up, with government representatives, business leaders and academics participating. Dr Goh Keng Swee, then Singapore's Deputy Prime Minister, suggested to the inaugural hosts, the Australians, who visited me at my office in the Department of Economics at the National University of Singapore in Kent Ridge, that I should head the informal Singapore delegation instead of him.
Freeing China from Russian bear hug
AS THE PECC evolved, the Americans wanted to bring the PRC into the PECC, with a view to free China from the then fairly-tight Russian bear hug. The inclusion of China became highly political for the PECC, which had been essentially an economic regional outfit. The PRC then was still very much a closed economy with few economic ties with the outside world. The PECC has always been intended, from its inception, as an economic organisation for Pacific Basin countries.
I successfully persuaded my colleagues in the PECC steering committee to bring in as well Hong Kong, then still under British rule; and Taiwan, then still highly antagonistic towards the PRC but which had become politically almost completely isolated from the PECC community. Both Hong Kong and Taiwan, however, were very important economically in the Pacific Basin, and both were and still are important parts of the then "Free World".
The head of the Canadian delegation was appointed by the PECC steering committee on the mission to invite all three "Chinas" to join the PECC. I was delighted to receive the telegraphic message from him, a very successful businessman, thus: "All three cousins would come to dinner". I believe my reply to him was "Congratulations. You are a great diplomat as well."
The Asean trump card
THE members of the Association of Southeast Asian Nations (Asean) had each a trump card in persuading the PECC Steering Committee to accept the trio or none.
When PECC was founded, some South-east Asian delegates expressed reservations about the usefulness of the regional organisation. The Filipino delegates were particularly vocal.
Some South-east Asian participants even expressed openly that we were asked to play a more active role in the cold war against communist countries. Later, when I was asked by American, Australian and Japanese colleagues on the PECC steering committee why the Asean members were not very enthusiastic in their dealings with the PECC, I replied that they did not want just to sing the tune set by the five developed economies in our region, namely, Canada, the United States of America, Japan, Australia and New Zealand.
I suggested that the Asean nations must be given an important say in the operation and future of PECC. They all agreed that on important issues like future new membership, all of us members in the PECC steering committee must agree. That decision thus gave the seemingly unenthusiastic Asean members each a veto right.
We had this veto right when the US wanted to invite the PRC to be a member. As the PRC was at that time in the process of opening up, the timing of the invitation was excellent. We all thus endorsed the move enthusiastically. The delegates from Japan showed the most enthusiasm to have the PRC, its closest neighbour.
China's FTAAP proposal
ONE prominent issue that Apec at Beijing handled is the Chinese proposal to form a free trade area among the Apec countries, called Free Trade Area of the Asia Pacific or FTAAP. The proposal has been the long-term dream of PECC. Never did the original PECC expect the PRC to make such a move for trade freedom, although still of a regional nature, not global. Probably the PRC proposal is an antithesis to the earlier American proposal of having the TPP (Trans-Pacific Partnership) that excludes China. Note that the FTAAP is within the framework of Apec and thus must be open to all Apec members. The American proposal is outside the framework of Apec.
Singapore is reported to have supported both the proposals. Both want free trade and Singapore has been supporting a free trade policy and practice since the time of Sir Stamford Raffles, with no change after self-government or Independence.
The two proposals really do not contradict each other: they share the same dream, except in the choice of partners! We in South-east Asia are aware of the saying, "When the elephants fight, the mousedeer gets hurt". We can only hope that the two Pacific giants can cooperate and co-exist in their own interests and in the interests of others who share the same region, the same world, with them.
Singapore's role in Apec
APEC involves governments and is not sustainable only as a talking forum. It is not. It is more than that.
During the last Global Recession arising out of the sub-prime mortgage crisis in the US, Apec at the meeting in Lima, Peru in 2008, took the most appropriate step of unanimously recommending to all members to follow a strict Keynesian policy of loosening monetary supply and more deficit financing as a countervailing antidote.
That decision was subsequently echoed or endorsed and confirmed by other groupings, including G-20, G-8 and the Organisation for Economic Co-operation and Development or OECD. Both Prime Minister Lee Hsien Loong and President George W. Bush attended the meeting which initiated the recommendations for the latter successful massive anti-recessionary Keynesian measures.
So, Apec has turned out to be a good mechanism to bring countries in the region together. So long as they continue to meet, to talk, and to dine together, they contribute to regional peace, co-operation and co-prosperity. I am glad that Singapore can play a role, however modest, through its hosting of the Apec Secretariat, active participation in the Apec process and its noteworthy role in the formation of the PECC and its evolution, including having the secretariat in Singapore as well.
The writer is Emeritus Professor of Economics at the Nanyang Technological University and former chairman of Singapore National Committee for Pacific Economic Cooperation.
S.E.A. View is a weekly column on Southeast-Asian affairs.