Foremost among these necessary conditions is preserving the rules-based multilateral system for managing international trade, based on the GATT/WTO, and the elaboration of these rules to cope with the continually increasing scope and sophistication of international economic transactions. This multilateral system, founded in the 1940s on the guiding principle of avoiding discrimination among trading partners, has been vital for the success of Japan, followed by others in North East, then some in South East Asia, achieve unprecedented improvements in their prosperity through an export-oriented economic strategy. Any other trading regime which sanctioned selective discrimination against trading partners would have made it impossible for these new exporting economies to capture markets from others in trade their way out of deep poverty.
Non-discriminatory rules for global trade and investment continue to be essential for China, Indonesia and, later, India and others to emulate the success of other East Asian economies. Massive structural changes will be required to respond to new competition and to take advantage of the enormous new trade and investment opportunities which will be created by the emergence of these new economic giants. They cannot be accommodated in anything less than a global economic regime.
A second precondition for promoting regional integration is to continue to dismantle the many remaining impediments to international transactions among Asia Pacific economies. Recognizing the inevitable difficulty of dismantling many of these impediments globally, the Asia Pacific region needs to find ways of accelerating the process within the region, without cutting across the overriding interest in a rules-based multilateral trading system. This is the essential intent of the Bogor Declaration, which endorsed the goal of free and open trade and Investment in the region while reaffirming APEC's guiding principle of open regionalism; to facilitate international economic transactions in the region without seeking to divert trade or investment from the rest of the world.
A third precondition is the continued the USA. Its military strength and influence are recognized to be essential in order to avoid uncertainties about security or destabilizing arms build-ups in the rest of the region. US commitment is also needed to defend an open international economic order. In the 50 years since the establishment of the GATT, the leadership of the USA has proved vital in preserving a largely non-discriminatory trading system. But now the USA no longer ability to exercise the same type of leadership, given the much greater relative economic strength of Europe and, increasingly, Asia. Europe's preoccupation with its structures and difficulty in coping with developments in the former communist economies on its doorstep means it is not likely to exercise constructive leadership of the wider multilateral system in the next decade or more. None of the East Asia economies can do so individually, despite their growing importance. If the WTO is to meet its many new challenges, it will require new champions, with East Asia supporting the USA to provide collective leadership (Drysdale, 1988)