Chi-Chen Chiang

Founded in 1989 at the beginning of the post-Cold War era, the Asia-Pacific Economic Cooperation (APEC) forum could be seen as a "new-age" body¾ an informal grouping of various Asia-Pacific economies that operates in response to the growing need for economic cooperation. APEC includes 21 members and incorporates a large variety of stages of economic development, economic and population sizes, ethnic groups, governments, political ideologies, cultures, and religions. This diversity makes APEC markedly different from the European Union (EU), which manages international cooperation in a comparatively homogeneous region in terms of political and economic developments. APEC members have economies as technologically sophisticated as the United States and Japan and as underdeveloped as Papua New Guinea. GDP per capita in APEC ranged in 1997 from Japan's $33,200 to Vietnam's $335. In population APEC members range from China with more than 1.2 billion people to Brunei with less than 300,000. The size of members' territories range from Russia, China, the United States, Canada and Australia all with about 3 million square miles to Singapore with less than 250 square miles. APEC countries also span the spectrum of political systems, from the Chinese communist government to American democracy. There are also limited monarchies, quasi-democracies, and autocratic states in between. Because there is so much difference and diversity among APEC members, in many senses the organization is still feeling its way toward establishing its objectives and operating approaches.

Under the circumstances, some skepticism about APEC's functions, operation, and effectiveness is inevitable. For instance, a senior EU trade negotiator, Paul Luyten, criticized APEC by saying "So much vision but so little action. If APEC had been a vision with a plan and schedule, it might command some respect." Another commentary about the APEC summit in Manila offered by the Financial Times commenced by "A Perfect Excuse to Chat" and carried on to observe, "That unflattering description of APEC is now doing the rounds after its unproductive summit in Manila this week." Some even claimed that APEC was nothing more than a "talkfest." Therefore, is APEC only a talkshop without any plan, schedule, and cooperative action? If it is not, what is really going on in the APEC operation and how do we conceptualize this? This paper is going to explore the following two major questions:

1. What are the results of APEC?
2. How can we conceptualize and conceptually explain the APEC operation?

In this research paper, I use both inductive and deductive methods to answer these two questions. I inductively categorize and describe the results of APEC. Then I conceptualize the APEC phenomenon as a non-institutionalized cooperation regime. I then use the analytical model of the non-institutionalized cooperation regime to explain APEC's operation. What is occurring in APEC is the functioning of a particular kind of

international regime that, like all such regimes, is based upon particular principles, norms, rules, and decision-making procedures. These can all be readily identified and they will be later in this analysis. To be clear, the term "model" I use throughout the article means a representation of a particular set of phenomena that sets out the main tenets or components of it.

APEC Results¾ Beyond A Talkshop

APEC is not merely a "talkshop" can be ascertained by examining APEC's results.

APEC's Goals

The APEC forum is in practice driven directly by politicians, officials, and businessmen in the capitals of its members, rather than by a large central bureaucracy with powerful enforcement capability. As such, APEC has not only produced a featured process of consensus building, ideas harmonization, and policy convergence, but also agreed on certain objectives and agendas. At Seattle in 1993, for example, APEC economic leaders embraced the vision of a Pacific community based on shared strengths, shared peace, and shared prosperity. In the 1994 Bogor Declaration of Common Resolve, leaders agreed a goal of free trade and investment throughout APEC by 2010 for industrialized economies and 2020 for developing members. As a roadmap to achieving the 2010/2020 goals, APEC members have developed action plans, both individual and collective, set forth in the 1995 Osaka Action Agenda. And at Manila in 1996, APEC reviewed operational plans that specified the short, medium, and long term actions which APEC members would take to execute the strategy of the Osaka Action Agenda contained. These agreed goals and agendas sound uneasy to achieve. However, in any event, APEC members have agreed to pursue the final goal of advancing Asia-Pacific economic dynamism and arriving at a sense of community by accomplishing the liberalization objective succinctly defined in the Borgor Declaration's commitment to free and open trade and investment in the region by 2010 or 2020.

Action Approaches

APEC members have adopted an unprecedented triple-track approach to facilitate the achievement of their goals. The approach involves a balance among these three tracks: trade and investment liberalization, business facilitation, and ECOTECH (economic and technical cooperation). The result of the first track is to accomplish liberalization in APEC primarily through Individual Action Plans (IAPs) and Collective Action Plans (CAPs). Individual actions entail the voluntary contributions of member economies towards achieving APEC objectives. Collective actions, as the name implies, are actions which APEC members undertake together to achieve the same goal. Other agreements such as the APEC Non-Binding Investment Principles (NBIP) and Early Voluntary Sectoral Liberalization (EVSL) also contribute to the liberalization process.

The result of the second track, business facilitation, is a public-private alliance between governments and business. While APEC is conceived as an inter-governmental dialogue, it has viewed service to the business community in the region as one of its major objectives. Participation of private-sector representatives is thus part of the APEC process, as their technical expertise was sought by various APEC working groups. Initially the Pacific Business Forum (PBF) and the Eminent Persons Group (EPG), two ad hoc business advisory groups, were constituted to recommend avenues to approach regional trade liberalization. At Osaka in 1995, leaders decided to regularize this channel of advice through the creation of the permanent APEC Business Advisory Council (ABAC), that would communicate business sector opinions directly to APEC leaders and to other senior officials. In turn, like Philippine President Ramos' catchphrase, "APEC means business," APEC has been improving conditions for business by assisting them to avoid delays and cut costs. More specifically, "APEC is responding to business demand for less paperwork, simpler procedures, easier access to information and a more level playing-field for conducting business in the region,"such as faster customs clearances and more consistent customs evaluations, expanded e-commerce and paperless trading, easier access to government markets, uniform standards for food, electrical, and machinery products, simplified business travel, and so on. Thus, indeed "no one better appreciates the need for APEC success than the global business executive."

ECOTECH (economic and technical cooperation), APEC's third track of facilitating economic growth and liberalization, covers a variety of capacity-building activities conducted by APEC bodies. These are aimed at enhancing members' ability to benefit from the liberalization agenda and reducing disparities within the diverse APEC

region. This initiative demonstrates APEC's commitment to provide economic and technical assistance to its developing member economies. So far more than 250 cooperative ECOTECH projects have been undertaken or completed. They include: the Kuala Lumpur action program on skills development, the cleaner production strategy, developing human capital, fostering safe and efficient capital markets, strengthening economic infrastructure, harnessing technologies of the future, promoting environmentally sustainable growth, and the development of a Y2K assessment kit.

Information Exchange

Information exchange is the central theme and function of most international organizations. Here the APEC forum is not exceptional and serves as a center of information exchange, collection, and dissemination. By providing accurate and timely information, APEC has been making efforts to facilitate business transactions and lower costs in the region. In doing so, APEC has published a number of valuable guidebooks on regulations governing business in the region, including a Customs Guide, Guide to Investment Regimes in APEC economies, Regional Economic Outlook, as well as useful reports on issues such as Energy Technology Transfer. Furthermore, the APEC Secretariat and members economies also provide market access information (databases) via the Internet. This information covers such issue areas as tariffs, investment, e-commerce, intellectual property, business opportunities, government procurement, shipping, labor markets, business disputes, and so on.

Political Outreach

Even though its focus is economic, APEC serves regional political interests as well. Politically, APEC has provided a new channel for the US to engage in the Asia-Pacific region since the end of the Cold War; it has also brought China, Hong Kong, and Taiwan (Chinese Taipei) together in an unprecedented and innovative manner. While affording opportunities to leaders and ministers to advance key bilateral interests on a regular basis, APEC gathers the region's leaders on an annual basis to discuss their priorities and concerns on broad topics. For instance, although East Timor was not on the formal agenda of APEC forum this year, it dominated the APEC summit actually. The APEC summit thus not only highlighted the issue of East Timor but also provided the effective channel for relevant leaders to exchange information and opinions multilaterally. It is clear that APEC summits, in some senses, can offer another effective way for consultation at highest levels on a variety of issues that are unconnected with the formal APEC work programs.

APEC has also facilitated personal diplomacy in the Asia-Pacific region. APEC summits provide opportunity for leaders of Asia-Pacific region to get acquainted with one another, to take one another's measure and even more important, to feel comfortable with one another. As US president Clinton said, "It's like all other human relations, the more we're together, the more natural it is." The summit consequently helps leaders to build their personal relationship with others. Moreover, each leader arrives at summits with his own agenda and APEC often complements this. In the first leader's summit in 1993, for example, "China's President Jiang Zemin was out to nail down most-favored-nation trade status for his country" and "American President Bill Clinton used the occasion to present himself to the American public as a world statesman." Therefore, the leaders have personal stakes in the success of the APEC initiative.

It is inaccurate to say then that APEC is just a talkfest without any plan, agenda, and action. Clearly APEC has established its own goals and objectives, scheduled its agenda, acted through its own approach, served as an information provider, and abetted certain political interests. Certainly these results do not mean that APEC can definitely accomplish its goals as its members expect. Just like many other international organizations, APEC has its problems and obstacles for achieving final objectives as well, such as the problem of free riders and tremendous difference among member economies. Instead, these results tell us that APEC participants so far have cooperated with one another in many instances. That is, those various APEC members have participated in some sort of process that keeps them interacting productively. But what pulls them together? What is the system or process in the APEC operation? Some may simply dub the process "the APEC way." But, conceptually speaking, what does this mean?

Non-Institutionalized Cooperation Regime

In the past, great efforts have been made to study and interpret international cooperation by applying such theoretical approaches as realism, liberalism, game theory, functionalism, regionalism, institutionalism, multilateralism, regime theory, interdependence, or intergovernmentalism. These theories or approaches mentioned above, of course, all could contribute to the explanation of international cooperation.

However, regarding APEC, regime theory turns out to be particular useful. Regime theory goes beyond the analysis of formal organizations and focuses on examining principles, rules, norms, and decision-making procedures. The concept of international regime has been defined extensively as "sets of principles, norms, rules, and decision-making procedures around which actor expectations converge in a given issue-area."

It is usually used to interpret international collaborative arrangements and institutional developments in specific issue-areas such as trade, monetary affairs, social and economic development, the environment and security. As global issues have mushroomed and the extent of international interdependence has increased over the past few decades, the importance of international regime has been risen and various theoretical approaches and perspectives in the study of international regime have also proliferated. In general, each theoretical approach has taken different positions on the formation, function, and effects of international regimes. For instance, some approaches focus on the interest or knowledge sharing, and some regime analyses are based on the concept of power. Recently, some writers such as Vinod K. Aggarwal have applied the regime theory to

understand the formation of regional organizations as well, both in the Asia-Pacific and in other areas of the world. Therefore, the concept of international regime seems well suited to explaining the operation of APEC forum, which is characterized by consensus building, voluntary compliance, policy convergence, and the lack of legalized obligations, institutional structure, and committal reciprocity.

Nevertheless, it seems oversimplified to say that APEC is merely an international regime. We should go further to inquire what the APEC regime looks like. That is, exactly what kind of regime is APEC? I regard APEC as a non-institutionalized pattern of international cooperation. It is an international cooperation regime wherein actors (state and non-state) find it possible to pursue their own interests, and indeed do so, by voluntary compliance without binding commitments or calling upon enforcement mechanisms. I term this particular kind of international regime a non-institutionalized cooperation regime. This kind of regime operates according to the following tenets: the principle of self-interest, the norm of voluntarism, flexible decision-making procedures, non-binding rules and no enforcement mechanisms. These tenets will be elaborated respectively in the following sections.

The Principle of Self-Interest

In Theory

According to the regime theory, "principles are beliefs of fact, causation, and rectitude." In the model of a non-institutionalized cooperation regime, self-interest serves as the primary principle for cost-effective assessments and causality evaluations. Generally speaking, the idea of cooperation in the pursuit of self-interest can been seen as a natural and necessary principle for actors in considering the participation of any kind of international regimes or organizations. The important point that needs to be stressed here is the incentive to cooperate. As calculations of egoistic self-interest emerge as central elements in international regimes, behaving in non-institutionalized regimes is based on the question of whether self-interest can be served more from cooperation than unilateral action. In other words, if actors believe they can get more rewards in terms of self-interest from cooperating than from acting unilaterally, they will participate in processes of non-institutionalized cooperation. Actors in non-institutionalized cooperation regimes tend to see themselves in positive-sum games wherein they believe they can have plus rewards based on their calculations.

Members' Self-Interest in APEC

APEC has a variety of member economies and no doubt they take part in the APEC operation under the different considerations of self-interests. We can see whether or not the pursuit of self-interest serves as a major principle in APEC regime by examining individual APEC member's interests and rewards. For example:

Australia, the first advocate of establishing APEC, was urged to redirect its trade policies towards the Asia-Pacific region as more and more economists and government reports saw East Asian economies not only as important economic partners for Australia, but also potential allies in international trade negotiations. Particularly after the consolidation of European Union and the establishment of North American Free Trade Agreement (NAFTA), the Australians have engaged in coalition-building to maintain and expand economic relations with their Asian economic partners. To seek greater transparency and liberalization in international trade on a nondiscriminatory basis, Australian Prime Minister, Bob Hawke, shared the idea with a group of Australian economists such as Peter Drysdale, Stuart Harris, Andrew Elek, and Ross Garnaut, that developing a regional organization for analysis and consultation on economic issues is the way to go. Canberra knew its interest in creating the APEC.

Australia as a result has obtained rewards because APEC's evolution generally has been very much in accord with Australian preferences, such as "an agreement on a goal for trade liberalization, and working groups established to enhance transparency in international trade and reduce transactions costs." Also, APEC became a major vehicle for Australia's regional engagement, providing Australia with a forum in which it can influence the shaping of regional order and reducing the dangers of isolation at a time when regional cooperation was fast developing in Europe and North America.

The United States, one of the largest economies in the Asia-Pacific region, has maintained its policies toward the Asia-Pacific by pursuing three underlying objectives over time. They can be summarized as: "to secure economic assess to the region, to spread value systems preferred by Americans; and to prevent domination of the region by other powers." There is also an interest in strengthening the US position on economic matters in the region particularly under the threat of increasing Asian economic competitiveness and expanding exports to the US market. Although most of this action takes place at the bilateral level, there is also a desire to make APEC a tool for realization of US economic interests. In general, there are a couple of factors underpinning American participation in the opening and operation of APEC. First, political and security interests: some Asian specialists argue that the United States has a strong interest in building a stable order in the Asia-Pacific after the Cold War. Second, economic interest: economists contend that a regional economic institution would contribute to reducing American costs in economic transactions with Asia-Pacific economies. Finally and more critically, engagement: as Baker argues that, joining in APEC "avoids U.S. exclusion from regional councils and loss of assured assess to the resources and other opportunities offered by the region's dynamic growth."

Although Washington remains somewhat uncomfortable with APEC's broad representation and loose structure, APEC has important political and strategic implications for the US as it provides a vehicle for routine involvement in regional dialogue and decision-making. APEC also serves as "a convenient and face-saving arena for addressing issues of market access and other US concerns, like the continuing need for deep structural changes in Japan's economy, that otherwise would result in contentious bilateral disputes." In a word, even though APEC's evolution has not been institutionalized as the US might prefer, to date participation in APEC has "both advanced and protected the core American interest in continued assess and engagement in the region."

With the end of the Cold War, Asia's importance to Japan has reached a new peak. In 1988, Asia surpassed the US as Japan's largest trading partner, and it surpassed the US as Japan's largest export destination in 1991. Thus Japan's interests in APEC are very clear and certain. Japan has tried to utilize APEC as a means of avoiding or resolving the external pressures, such as to contain US unilateralism and prevent Europe and Western Hemisphere from becoming protectionist. Simultaneously APEC can provide channels for Japan to strengthen ties with ASEAN, to engage China in the region, and to elevate Japan's status regionally and internationally. As to whether APEC should become more institutionalized as a free trade area, Japanese former Prime Minister Morihiro Hosokawa stated "this is not the direction or the objective we believe would be desirable or that we should seek." And in fact, the current characteristics of the APEC process, like voluntarism, flexibility, and pragmatism, are consistent with Japan's interests and desire.

China, a rapidly growing economic power in the world, has taken an active role in APEC activities since it was accepted as a member in 1991. Why has China been so eager to join and support APEC? The executive director of the APEC Policy Research Center of Chinese Academy of Social Science, Zhang Yunling, answers concisely by saying, "China needs APEC." But still, why? He further explores the reasons for China's strong commitment to APEC. They could be summarized as: first, China's economic interests are intricately linked to the Asia-Pacific region. Secondly, strategic concerns about challenges and competition from other Asia-Pacific countries, especially from ASEAN members. Finally, China desires to be an emerging power with a strong voice in regional affairs. Indeed, APEC membership gives China a framework for cooperation with other Asia-Pacific economies, and provides China a forum to express its views on economic issues.

ASEAN (Association of Southeast Asian Nations) is already a regional organization. But ASEAN and its individual members still have interests in participating in the APEC operation. ASEAN members are afraid of being excluded from any regionalism in the Asia-Pacific region. They don't want to see any single economic power dominate the region. Thus there is deep concern within ASEAN that APEC will be used by the stronger economies as a tool to pry open ASEAN markets. Therefore, ASEAN

members actively involved the formation of APEC to protect their interests. They maintain that APEC should remain a loose consultative forum and not be transformed into a negotiating body. They believe that the APEC process can help reinforce the efforts of the ASEAN countries to open up their economies, if primarily through consultation. So far APEC in practice has been working on liberalization of trade and investment in the way consistent with ASEAN's expectation, such as concerted unilateral action and voluntary compliance.

Besides, taking APEC as a whole, as can be seen in Table 1, APEC member economies have contributed to a lowering of tariffs in the region through their individual voluntary commitment and implementation. The average tariff level was lowered from 15 percent in 1988 to 9 percent in 1996. In terms of trade interaction, intra-APEC trade illustrated in Table 2, both imports and exports, has been increasing continually. Total APEC's exports from and imports to APEC economies from 1992 to 1997 have risen 11.3 percent and 11.5 percent respectively. Either lowering tariffs or increasing trade interactions can be seen as rewards produced by APEC operation.

Overall, these enumerated examples document the principle that every participant in APEC has different self-interests and believes that it could get rewards through the APEC process. These examples simultaneously show that member economies obtained rewards in different degrees and aspects. That is, their self-interests have been served.

Table 1: (Unweighted) Average Tariffs of APEC Economies, 1988-1996

Source:

Peter Drysdale, Andrew Elek, and Hadi Soesastro, "Open Regionalism: the Nature of Asia Pacific Integration," in Peter Drysdale and David Vines, eds., Europe, East Asia, and APEC: A Shared Global Agenda? (Cambridge, UK: Cambridge University Press, 1998), 115.

APEC's exports to: (US$ millions)

APEC’s imports from: (US$ millions)

Source:

APEC Secretariat. http://www.apecsec.org.sg/member/indi.html (August 27, 1999).

The Norm of Voluntarism

In Theory

Voluntarism is an important norm in the model of a non-institutionalized cooperation regime. This norm serves as the standard of behavior and defines rights and obligations. Actors in non-institutionalized cooperation regimes perceive a right in voluntarism and an obligation in voluntary commitment and compliance. This is in lieu of legally required reciprocity bound by agreements or treaties. It is accepted since that "all participants have positive interests in abiding by their undertakings, there is no need to waste time on lengthy processes of drafting legalistic texts, making them formally binding by requiring the formal ratification of international treaties by legislatures of each participant and setting up enforcement mechanisms." Thus once cooperation is seen to be a positive-sum game, actors will voluntarily seize upon cooperative opportunities. Also, the benefits of the positive-sum game will increase confidence, trust, and willingness to cooperate. Accordingly, in the non-institutionalized cooperation regime voluntariness is preferred to compulsion and persuasion over international legislation.

Voluntary Compliance in APEC

Unlike NAFTA or the GATT/WTO, which rely on negotiating processes and binding treaties, APEC has been set up to be a voluntary economic forum, which maintains the autonomy of member economies and allows them to make concessions voluntarily and individually. Based on the assumption that economic liberalization is a beneficial and positive-sum game, most APEC members believe that achieving open and free trade and investment can be come through concerted unilateral action (CUA). Under the circumstances, each agreed goal (e.g. liberalizing trade by 2020) will be approached by a process of concerted unilateral decision-making, with each economy enacting the domestic regulations or legislation in line with the APEC guiding principles. In doing so, the 1995 Osaka Action Agenda provides a voluntary approach for member economies to achieve the Blake Island vision and the Bogor goals under the their individual circumstances. That is, APEC members can comply with their agreed goals unilaterally by Individual Action Plans (IAPs). Since the 1996 Manila meeting, APEC members have begun to submit and implement their IAPs.

As we can see from the Box 1, 2 and 3 about the 1998 IAP implementation and improvements in tariffs and 1999 IAPs highlights, IAPs show how each economy will achieve APEC's goal of free and open trade and investment across the region by annually measuring progress and future undertakings against different policy areas, including tariffs, non-tariff measures and so on. The concerted unilateral approach is indeed effective because every member did carry out its individual annual plans for economic liberalization and further planed its own next step. Although there have been no big jumps in economic liberalization, at least APEC members are moving incrementally and continually. More importantly, this voluntary approach can avoid hegemonic dominance and take into account differences in stages of economic development and in socio-political systems. This is why the voluntary approach to cooperation, stressing voluntariness over compulsion, can attract a variety of economies. Therefore, voluntary compliance¾ making concessions or commitments voluntarily¾ can be seen as an important norm of the APEC regime.

Box 1. Highlights of 1998 IAP Implementation in Tariffs

APEC Secretariat. SOM Chair's Summary Report on the 1998 Individual Action Plans¾ Implementation and Improvements to the IAPs. http://www.apecsec.org.sg/ (August 27, 1999).

Box 2. Highlights of 1998 IAP Improvements in Tariffs.

APEC Secretariat. SOM Chair's Summary Report on the 1998 Individual Action Plans¾ Implementation and Improvements to the IAPs. http://www.apecsec.org.sg/ (August 27, 1999).

Box 3. 1999 IAPs Highlights

APEC New Zealand 99: Newsroom. http://www.apec.govt.nz/n/fmedia/media990910d.htm (Sept. 13, 1999).

Flexible Decision-Making Procedures

In Theory

In regime theory, decision-making procedures are "prevailing practices for making and implementing collective choice." In the model of a non-institutionalized cooperation regime, the manner of decision-making is very flexible. Because of voluntarism, there is no need to make binding decisions through any particular voting mechanism, like majority voting. Thus the decision-making process in the non-institutionalized cooperation regime is simply a process of eliminating differences, which involves more consultations and less negotiations. Consequently, the results generated by

the flexible decision-making procedures are not legally binding texts or treaties. They are usually measures of consensus in the form of agreements or declarations. The manner of implementing such collective choices is flexible as well.

Flexible Consensus Building in APEC

The Asia-Pacific region involving four different continents is controlled by no single country—not Japan, despite its great economic power, nor China, despite its huge markets and plenty resources, nor the United States any longer. This could be the reason for why the better communication and mutual trust, consensus, and mutual self-interests are important and necessary for building any international cooperation in the Asia-Pacific region. APEC has been facing this challenge since it was created. As set forth at the founding meeting in Canberra, APEC decisions are not made by majority voting used by

most international organizations such as the United Nations, but require a consensus from the highly diverse membership. It is also this consensus-based decision making that underpins the APEC formation and expansion because most actors prefer to keep more autonomy. But unanimity became increasingly difficult to maintain as the organization addressed more substantial issues.

Thus the idea of "flexible consensus" was introduced by Indonesian President Suharto to approve the controversial 1994 Bogor Declaration. In the 1994 leaders’ meeting, Suharto said, "Some of you perhaps have dissatisfaction, but we need your cooperation, as a flexible consensus is necessary." The idea tends to move the decision-

making further by adopting the expedience that allows dissidence in consensus. As a result, a consensus is not necessary to be a unanimous consensus. Based on the justification of flexible consensus, Malaysia was allowed to express its objections and ultimately the agreement on the Bogor Declaration was still forged. This practice broke the unanimity of consensus building and allowed disagreements or objections in the final consensus. However, the world "flexible" is very tricky. How flexible is the consensus building? What is the acceptable extent of the flexibility? Thus far there is no clear definition about the flexibility and of the word "consensus" among APEC members. This, as a result, shows how flexible the APEC decision-making procedures are.

Non-Binding Rules and No enforcement Mechanisms

In Theory

In an international regime, "Rules are specific prescriptions and proscriptions for actions." Based on the norm of voluntarism and flexible decision-making procedures, it is difficult and unnecessary to constitute and enforce legally binding agreements or treaties in the model of a non-institutionalized cooperation regime. For this reason, the rules produced under non-institutionalized regimes are legally non-binding agreements, declarations, plans or agendas. But they do express strong and serious commitments by participants. What non-binding rules can do in practice are to encourage participants to do their best to act according to the rules that they commit to. Additionally, the norm of voluntarism and non-binding rules in turn make the delegation and pooling of sovereignty needless and meaningless. As a result, it is not necessary to have enforcement

mechanisms in the non-institutionalized cooperation regime. Mechanisms like the summits, councils, committees, and a secretariat may be needed in a non-institutionalized cooperation regime, but they are essentially practical and flexible in form to help participants pursue their interests though cooperation rather than mandate what participants must do.

Non-Binding Rules of APEC

Because APEC is proceeding under the norm of voluntary compliance, the ministerial meetings or leaders' summits, the two major decision-making processes, do not and need not make any legally binding decisions. There are no "APEC decisions" as such. What the ministerial meetings or leaders' summits have produced so far are joint statements, declarations, and non-binding action plans and agendas, such as the 1993 Blake Island Economic Vision, the 1994 Bogor Declaration of Common Resolve, the 1995 Osaka Action Agenda, the 1996 Manila Action Plan for APEC, and the APEC Non-Binding Investment Principles (NBIP). The rules stipulated in these APEC statements, action plans, and agreements are not compulsory. They primarily provide guidelines for cooperation among APEC member economies.

No Enforcement Mechanisms in APEC

Created in November 1989, APEC was initially not much more than a loose forum for the discussion of economic cooperation in the region. Since then, the APEC forum has evolved into a set of pragmatic and consultative organizations rather than centralized bureaucracy with enforcement mechanisms. On the whole, the APEC organizational structure looks like the chart illustrated in Figure 1.

It is mainly composed of the ministerial meetings, senior officials' meetings (SOM), the APEC Business Advisry Council (ABAC), three official committees (BAC, CTI, and EC), working groups and the secretariat. The official mechanisms like committees, meetings, councils, and the secretariat are all proceeding without any enforcement capability, but to support pragmatic needs such as information collection and exchange, dialogues, consultation, coordination, or building consensus. For example, the APEC Business Advisory Council (ABAC) consists of senior businessmen to provide advice for economic leaders and other APEC officials on issues of interest to Business. ABAC also responds to requests from various APEC sub-groups for information about business-related issues or the business perspective on specific areas of cooperation. Working groups, including business representatives along with governmental delegates, meet annually at the ministerial and senior officials' level to provide channels for dialogue among partner economies. The APEC Secretariat was established as a "support", not an enforcement mechanism to facilitate and coordinate APEC activities, and provide technical services. In marked contrast to its counterpart in Brussels, the APEC Secretariat is small in size and simple in structure with a budget of only US$2 million per year and a staff of about 25.

As to the APEC summit, it has no formal status within APEC. No rules mandate a meeting of heads of member economies. In fact, each year it is up to the leaders themselves, particularly the host, to find a consensus for scheduling leaders' talks for the following year. The meeting is very informal and congenial, but it has far-reaching impacts on the APEC process and evolution, such as breaking out of bureaucratic inertia.

As an Indonesian diplomat said, "They (bureaucrats) are used to routine things. Their thinking is usually incremental, not radical, whereas the president has some other ideas. He wants to achieve something big, not just incremental." As a result, the annual summits have given APEC a much more active agenda that could be achieved through ministerial meetings or SOMs. Australian Prime Minister Keating sharing the same idea said, "If the leaders actually want to do something, they can actually go and do it." Although they are leaders from every member economy, the leaders’ meetings, like other

APEC official mechanisms, neither make binding decisions nor possess enforcement capacity. All APEC organizational mechanisms from the ministerial meetings, the leaders' meetings, official committees, business advisory council, working groups to the secretariat, are designed to forge guiding principles and substantiate economic cooperation through consensus building and voluntary compliance. Among most member economies, there is little intention to set up regional bureaucratic institutions with powers of regulation or enforcement over individual APEC members.

Conclusion

Over the past decade, APEC has generated such results as (1) committing a diverse group of economies to the goal of free trade and investment by 2020, (2) formulating and implementing a triple-track action approach (trade and investment liberalization, business facilitation, and ECOTECH), (3) functioning information exchange, collection, and dissemination, and (4) serving political interests. APEC has chalked up more successes than its founders and most ardent proponents had anticipated. Undoubtedly these results have established that the APEC forum is something more than a talkshop. So, what is APEC?

After examining the results, operations, processes, and mechanisms of APEC on the basis of a model of a non-institutionalized cooperation regime with self-interest as its principle, voluntarism as its norm, flexible decision-making procedures, non-binding rules, and no enforcement mechanisms, several things can be concluded. First, APEC member economies like Australia, the United States, Japan, China, and ASEAN countries, did take their self-interests as a first principle in assessing whether or not to participate in APEC. And APEC members in turn did obtain rewards, which would not be available via individual action. Second, voluntary compliance¾ making concessions or commitments voluntarily and unilaterally¾ is both the obligation and the right of APEC participants. Third, consensus building is the prevailing decision-making procedure in APEC forum, but the manner of consensus building used in APEC seems flexible and varied. Fourth, APEC statements, action plans, agreements and agendas are not binding legal texts. Finally, no mechanism in APEC has a power of regulation or enforcement over individual members.

According to these concluding findings above, we can conclude that the APEC operation can be conceptualized as a particular kind of international regime wherein participants find it possible to pursue their own interests by voluntary compliance without binding commitments or enforcement mechanisms. In other words, the theoretical model of a non-institutionalized cooperation regime can relevantly explicate what is going on among APEC members. The so-called "the APEC way" is in effect behaving within a non-institutionalized cooperation regime.

Yet, some APEC member economies, like Australia, the United States, South Korea, New Zealand, and Canada, which favor strengthening the institutional structure of APEC, may still maintain that APEC should not just be APEC. They may argue that APEC should evolve into something like GATT/WTO, NAFTA, OECD, or other kinds of international organizations with negotiating binding and enforceable international rules and regulations. This also has been part of the dispute over what the primary direction and form of the APEC process should take since the outset of the APEC forum. None the less, what I would argue here is that APEC is APEC. It is not necessary to be like someone else. That is, APEC has created its own way in its effort to find its identity. This unique way is what I term a non-institutionalized cooperation regime. Like other international regimes, this unique international regime has also brought about its own results I have described in the beginning. These results are in practice what occurring in APEC.

This paper primarily aims to explicate what is really going on in APEC by applying a particular kind of regime model¾ non-institutionalized cooperation regime. As Keohane and Nye state, "in such a world [marked by continuity and change], one model cannot explain all situations. The secret of understanding lies in knowing which approach or combination of approaches to use in analyzing a situation." For the reason, I believe that the model of the non-institutionalized cooperation regime can help us understand the APEC operation better. At the same time, the model helps us distinguish this sort of international cooperation regime from others. There may be a variety of international cooperation regimes. However, can this particular model of international regime be applied to other regions or issue-areas? Why or why not? How many kinds of cooperation regime are there? Which kind is better for what issue or region? Exploring and answering these questions would help us understand international relations better, especially in the world of globalization wherein the demand for international cooperation is proliferating. Certainly doing so needs to make further research efforts.

Appendix: Key Indicators of APEC Member Economies

Notes:

Area: in thousands of square kilometers

Population: millions estimates of mid year population 1997

GDP: Current Price GDP (US$ billion) 1997

GDP per capita: Current GDP per capita (US$)

Exports and Imports: merchandise trade (US$ billion) 1997

Exports, fob Imports, cif

Source:

APEC Secretariat. http://www.apecsec.org.sg/member/indi.html (August 27, 1999).

APEC Secretariat. 1995. Selected APEC Documents 1989-1994. Singapore: APEC Secretariat.

APEC Secretariat Web Site. http://www.apecsec.org.sg/

APEC Secretariat Press Release 02/96 (November 22, 1996). http://www.apecsec.org.sg/whatsnew/press/rel00296.html (September 29, 1999).

APEC Secretariat Press Release 48/99 (September 10, 1999). http://www.apecsec.org.sg/whatsnew/press/rel48_99.html (September 29, 1999).

Yamamoto, Yoshinobu and Kikuchi, Tsutomu. 1998. "Japan'sApproach to APEC and Regime Creation in the Asia-Pacific." In Vinod K. Aggarwal and Charles E. Morrison ed., Asia-Pacific Crossroads: Regime Creation and the Future of APEC. New York: St. Martin’s Press, 1998.

Zhang, Yunling. 1997. "China and APEC: Interests, Opportunities, and Challenges." In Donald C. Hellmann and Kenneth B. Pyle eds., From APEC to Xanadu. New York: M. E. Sharpe, 1997.

United Press International, New Zealand, September 13, 1999.