Background & History

Established: November 1989

APEC is the premier Asia-Pacific economic forum, the primary goal of which is to support sustainable economic growth and prosperity in the Asia-Pacific region.

APEC members are united in the drive to build a dynamic and harmonious Asia-Pacific community by championing free and open trade and investment, promoting and accelerating regional economic integration, encouraging economic and technical cooperation, enhancing human security, and facilitating a favourable and sustainable business environment.3

APEC finds its origins in a speech delivered by Australian Prime Minister Bob Hawke in Seoul on 31 January 1989, where he called for the creation of an economic forum in the Asia-Pacific, which would regularly bring together ministerial-level leaders to discuss ways of advancing economic cooperation and development.

Distinguishing the forum from a formal trading bloc, Hawke indicated that it might instead represent an Asian version of the Organisation for Economic Co-Operation and Development (OECD).

Hawke’s proposal was not without precedent, and had been formed in close collaboration with the Japanese Government, especially the Ministry for International Trade and Industry (MITI). MITI had approached Australia with the idea of a regional meeting of economic ministers in 1988. Positively received by the Australian Government, both countries sought to lay the necessary groundwork by approaching numerous countries in the region to sound out their response to the idea, most of who were receptive.

Other regional initiatives also formed an important backbone to APEC; most notably the Pacific Basin Economic Council (PBEC) and the Pacific Economic Cooperation Council (PECC), which since 1967 and 1980 respectively, had facilitated dialogue on important economic and business issues in the region. APEC’s effect was to raise such dialogue to a governmental level, becoming the first organization in the Asia-Pacific to do so.

Ten months after Hawke delivered his speech in Seoul, APEC’s twelve founding members met in Canberra to establish the organization, which initially took the form of an informal ministerial-level dialogue. They also agreed to meet a further two times, in 1990 and 1991, to develop the organisation’s structure and guiding principles.

The speed with which APEC was established is in part explained by the strong rationale for the existence of such an organization in the region. An important backdrop to its creation was a changing dynamic in the global trading system. With the Uruguay Round of General Agreement on Tariffs and Trade (GATT) negotiations stalling due to disagreements over agricultural subsidies, and other regional agreements proliferating in response – such as the Canada-United States Free Trade Agreement (CUSFTA) and Europe’s move towards a single market – there was a real concern held by many that the multilateral GATT framework would be undermined and become fragmented.

Indeed, the failure of the Montreal review of the Uruguay Round was one of the key catalysts in Hawke delivering the speech when he did. In his speech in Seoul, he explicitly raised the need for an organization like APEC to work to uphold the multilateral trading framework.

Beyond this need, countries in the region saw the need to increase cooperation and bridge gaps caused by economic and political diversity, as well as lingering legacies of mistrust from the Second World War. Perhaps more importantly, there was growing recognition that the region was poised to become one of the most significant centres of economic power, and that there was no appropriate institutional framework in place to manage this process and harness the opportunities that would come with it.

APEC’s guiding principles were first articulated during the 1991 meeting in Seoul. Declaring its commitment to encouraging growth and development in the region through reducing barriers to trade and upholding the multilateral trading system, it was clear from the beginning that APEC would pursue an agenda of “open regionalism,” meaning it would not discriminate against non-member economies and trading blocs, and its provisions would have to be extended to them. Similarly, it was clear that it would achieve its objectives through a process of consensus, and that members would be free to opt-in to provisions on a voluntary basis.

The first APEC leaders’ meeting took place in Seattle in 1993, during which it was agreed that leaders would attend annual summits to discuss potential avenues of cooperation. Following this was 1994 Bogor Summit, where leaders agreed on the Bogor Goals of ‘free and open trade and investment in the Asia-Pacific by 2010 for developed economies and 2020 for developing economies’, which are foundational to APEC’s identity. The Osaka Summit in 1995, which produced the Osaka Action Agenda, crystallized the way in which APEC would set about achieving the ambitious Bogor Goals.

APEC has steadily worked towards opening up trade and investment in the region. While it has produced a number of notable achievements – from its successful facilitation of the WTO adopting the Information Technology Agreement (ITA) to the creation of the APEC Business Traveller Card – setbacks such as the collapse of the Early Voluntary Sectoral Liberalization Program (EVSL) and the Asian Financial Crisis have, at times, cast into doubt the organization’s relevance and ability to achieve results.

Despite this APEC has proved resilient, as evidenced by current proposals for it to transform into a formal trading bloc through the Free Trade Area of the Asia-Pacific (FTAAP).

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.

Pacific Basin Economic Council

Unit 2803-06, 28/F, Harbour Centre, 25 Harbour Road Wanchai, Hong Kong
Tel +852 2815-6550  |  Fax +852 2545-0449  |  Email

© 2017 Pacific Basin Economic Council. All Rights Reserved. Designed By PCG-Asia