The Future of the PECC

 

Paper for the PECC General Meeting, Wellington, New Zealand, October 4, 1988.

 

               Before looking to the future, let me briefly review the growth and development of the PECC to date. As you know, the conference originated with a joint proposal by the late Japanese Prime Minister Ohira and former Australian Prime Minister Malcolm Fraser to hold a meeting in Canberra in 1980 under the name "Pacific Community Seminar." This inaugural meeting of what would later become the PECC was attended by 11 countries: the region's five developed countries, five of the ASEAN nations, and the Republic of Korea, as well as a delegation representing Pacific island nations. Each delegation had a tripartite structure consisting of business leaders, scholars, and government officials attending in a private capacity.

Under its new name of PECC, the organization held its second general meeting in Bangkok in June 1982, its third on the Indonesian island of Bali in November 1983, its fourth in Seoul in April-May 1985, its fifth in Vancouver in November 1986, and its sixth in Osaka in May this year. The original membership of 11 countries has since expanded to include the People's Republic of China, Taiwan, and the Pacific island nations.

The real impetus behind the founding of the PECC was a widely perceived rise in the relative importance of this region-both politically and economically-in world affairs, or, to put it somewhat differently, a shift in the balance of economic and political influence from the North Atlantic to the Asia-Pacific region. Since the PECC was founded in 1980, this trend has continued to the point where nearly half of world trade now takes place among the 15 member nations and regions of the PECC.

Nowhere has this trend been felt more strongly than in Australia and New Zealand, which in less than 20 years have radically realigned their overseas trade patterns in a Pacific, as opposed to European, direction.

At the same time that the Asia-Pacific region has been gaining in world power and importance, the countries of the region have become increasingly aware of their growing interdependence. Japan, for example, has gradually come to recognize the enormous impact of its domestic, as well as foreign, economic policies on the economies of its regional trading partners. By the same token, the United States, I think, now accepts the fact that its huge fiscal and trade deficits cannot be a matter of indifference to the other trading nations of the region.

With growing interdependence has come a realization of the need for continuous dialogue and consultation to enable our countries to resolve their economic disputes as quickly as possible and to reap the maximum mutual benefits that can come from closer regional cooperation. This idea is eloquently expressed in the "Statement on Pacific Economic Cooperation" adopted at the PECC's General Meeting in Vancouver in 1986. As the preamble to that document states, "the PECC believes that realization of the full potential of the Pacific Basin depends on enhanced economic cooperation based on free and open economic exchanges and in a spirit of partnership, fairness and mutual respect."

In pursuit of this objective, the PECC has developed into a forum for free and informal exchanges of views among its members and for the conduct of serious scholarship on aspects of Pacific regional cooperation. As defined in the Vancouver Statement, the PECC can be characterized as follows:

  • It is tripartite, consisting of representatives of business, academia, and government, all of whom participate in private capacities;
  • It is consultative, consensus-seeking and policy-oriented;
  • It is pragmatic, responding to problems as they develop; and
  • It is anticipatory, looking to emergent issues and events.

Let me suggest that an organization such as the PECC, given its structure and goals, necessarily passes through three phases of development. The first phase involves identifying the realities and issues with which it proposes to deal. In the second phase, those issues are studied in depth, and efforts are made to reach a consensus on them among the membership. In the third and final phase, the consensus becomes a vehicle for influencing public policy in the direction agreed upon. Of course, the PECC is not a decision-making unit, but neither is it simply a research body or discussion group. Its very raison d'etre is to induce policy makers to adopt and pursue our goals as their own.

It is in this respect that the PECC has sometimes been criticized for lack of effectiveness, particularly among business members of the various member committees. It is true, frankly, that the PECC has not yet reached stage three of its development. However, I think we have certainly identified the issues accurately enough, and the level of scholarship we have sponsored in my opinion has been outstanding.

The PECC has maintained a number of task forces, study groups, and forums on various critical issues affecting regional cooperation. At each General Meeting, these groups have reported on their areas of concern and, where appropriate, issued recommendations. At the last General Meeting in Osaka, the Standing Committee agreed to operate such groups on the following issues: fisheries; agricultural policy, trade and development; trade policy; minerals and energy; Pacific economic outlook; transportation, telecommunications and tourism; development of forest resources; amd institutional development. By utilizing these task forces in the way we have, the PECC has been able to get down to specifics and avoid the vague generalities in which so many worthy organizations become enmeshed.

But the fact remains that we are still in phase two and have yet to influence public policy in our member countries in a really significant way. Does this constitute a kind of failure, or is it simply a question of not yet being ready to move on to phase three? One can argue that the consensus-building process is still not complete, but then, by its very nature, it can never be. New issues constantly emerge, while old ones get resolved or simply diminish in importance. Surely we have reached sufficient agreement on fundamentals that we can at least begin to think seriously about beginning phase three.

I want to propose this afternoon a number of rather specific improvements in the structure and functioning of the PECC that, I believe, will greatly enhance our capacity to influence the public policy-making process. Some of these proposals have already been anticipated by the creation of the Committee on Institutional Development at the Osaka meeting earlier this year.

First, activate the national committees. Thus far, these committees have been relatively passive adjuncts of the Standing Committee. Yet the most effective public policy-oriented activities in pursuit of our mutual goals are those that can only take place at the national level.

Second, expand the activities of the Standing Committee. More specifically, the Standing Committee should discuss in detail the whole matter of how to most effectively influence public policy-something that it has not yet done in any systematic way. It might also consider restructuring the task force activities to provide more of a policy focus. I would also suggest that the Standing Committee become active in organizing ministerial conferences among the member countries. As the experience of other organizations has shown, such conferences are one of the most effective means of increasing official awareness of the organization's goals and policies.

Third, set up a permanent secretariat in a due course of time. The PECC's activities have now become so numerous and diverse that a center of coordination is urgently needed. Thus far, such coordination has presumably been entrusted to the chairman of the member committee designated to host the following General Meeting. Moreover, the ministerial conference I have suggested would require an enormous amount of hard work to properly organize-work that would be really difficult to carry out without a high level of secretarial assistance. Among other functions, the secretariat should be given responsibility for managing the Central Fund, which is currently handled by the national chairman who happens to be serving as secretary at any given time. From the point of view of more efficient financial management, the benefits of such a new arrangement are obvious.

This, then, is the short-term institutional agenda I propose for your consideration. I especially hope the business members of the PECC will strongly back these proposals as a workable approach to expanding the conference's policy-making influence.

To a considerable degree, I sympathize with the view of many businessmen that the PECC should move more quickly into what I have called phase three. The unified European market is, after all, only four years away, and other similar economic groupings are rapidly emerging around the world. The Pacific Basin nations cannot afford to be left behind in the wake of this major economic movement of our times. My hope is that over time, the PECC will evolve into a stronger mechanism through which the Pacific nations as a whole can effectively cooperate, build up a consensus, and resolve the many challenging economic issues ahead of us.

On the other hand, there is a risk in moving too quickly before we have laid the proper foundation for assuming new tasks and responsibilities. As presently constituted, the PECC suffers from certain structural limitations. A secretariat can be set up fairly rapidly, but it will take some time to expand the role of the national committees and the standing committee along the lines I have suggested. We need to build on our experience step-by-step, not rush headlong into new and unfamiliar undertakings. "Be patient" is always good advice in such matte®Ęs so long as it doesn't become an excuse for needless delay.

I am pleased to inform you that these ideas have already been discussed in detail in the first meeting of the Committee on Institutional Development, which was held here in this hotel in the past two days. By the time of the next PECC General Meeting in Wellington in November 1989, we should be in a position to carry out the necessary restructuring preparatory to beginning the third phase.

I think it is important to remember that, in a certain sense, businessmen are primus inter pares among the three constituent groups of the PECC. In an obvious and tangible sense, they have the most to gain from the realization of the PECC's goals, just as they have the most to lose if the countries of the EC and other regional groupings move too far ahead of us in their cooperative efforts. That is why I am especially grateful for the chance to address an audience such as this and why I believe that the future of the PECC lies in the hands of the businessmen of the Asia-Pacific region.