Introduction
Asia Pacific Economic Co-operation (APEC) is an innovative and flexible form of co-operation designed to accommodate the diversity of the economies on the Pacific Rim. These differ remarkably in terms of the size as well as the density of their populations, Incomes, cost structure and natural resource endowments. This diversity provides enormous potential for mutually beneficial trade and international investment. Rapidly falling real costs of transport and telecommunications are daily creating new commercial opportunities to take advantage of the natural complementary among regional economies.
At the same time, the diversity of cultural backgrounds, levels of technological capacity, forms of government and legal systems, underlain by historical legacies of colonialism and recent military conflicts, can make co- operation difficult. The challenge for the APEC process, as regional governments begin to implement the Bogor Declaration's goal of free and open trade and investment, is to find a workable compromise between different approaches to economic co-operation. The process also needs to anticipate further rapid changes in the economic “weights” of participants. The structure of APEC will need to be very flexible to accommodate the continuing decline in the relative influence of the USA in the Asia Pacific as well as the rapidly increasing strength of the Chinese and South East Asian economies compared both Japan and the USA.
The preconditions for co-operation
The objective of promoting closer communication and co-operation among Asia Pacific governments is an essentially conservative one (Drysdale and Garnaut, 1989), That is, to preserve the conditions needed for sustaining the recent positive trends of rapid growth and mutually beneficial integration of the region's economies.
Introduction Asia Pacific Economic Co-operation (APEC) is an innovative and flexible form of co-operation designed to accommodate the diversity of the economies on the Pacific Rim. These differ remarkably in terms of the size as well as the density of their populations, Incomes, cost structure and natural resource endowments. This diversity provides enormous potential for mutually beneficial trade and international investment. Rapidly falling real costs of transport and telecommunications are daily creating new commercial opportunities to take advantage of the natural complementary among regional economies. At the same time, the diversity of cultural backgrounds, levels of technological capacity, forms of government and legal systems, underlain by historical legacies of colonialism and recent military conflicts, can make co- operation difficult. The challenge for the APEC process, as regional governments begin to implement the Bogor Declaration's goal of free and open trade and investment, is to find a workable compromise between different approaches to economic co-operation. The process also needs to anticipate further rapid changes in the economic “weights” of participants. The structure of APEC will need to be very flexible to accommodate the continuing decline in the relative influence of the USA in the Asia Pacific as well as the rapidly increasing strength of the Chinese and South East Asian economies compared both Japan and the USA. The preconditions for co-operation The objective of promoting closer communication and co-operation among Asia Pacific governments is an essentially conservative one (Drysdale and Garnaut, 1989), That is, to preserve the conditions needed for sustaining the recent positive trends of rapid growth and mutually beneficial integration of the region's economies.
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