The challenge is to make the Asia-Pacific economy a source of strength for a liberal international system, and to encourage regional trade expansion without discriminating against non-regional nations. Despite the well-known limitations of GATT's most-favoured-nation based trade rules, they constrain the political threat of discrimination and provide a measure of security and political confidence in open international economic transactions.

Completing the unfinished business of the Uruguay Round is urgent. Yet, from the perspective of Western Pacific economies, the Uruguay Round is not the end of trade policy history, but the beginning, since it coincides with the region's continuing implementation of substantial reform and economic liberalization programmes within the region. APEC is of critical importance in defining the international trade and economic policy agenda beyond the Uruguay Round.

This is obviously a very important year for APEC. With the United States in the chair, and therefore with a strong interest in defining a substantial agenda for regional cooperation and negotiation, this is a time for laying out a long-term strategy for Asia-Pacific economic co-operation. The next APEC meeting is due to be held in Seattle in November. If the vexed question of participation by the People's Republic of China can be settled alongside representation from Taipei, this meeting will be the first attended by government leaders from most APEC economies. It will focus corporate attention and energies on regional developments.

There are four central policy interests in Asia-Pacific economic co-operation:

1. • Maintaining support for the “Western Pacific trade model”, within the region, especially through communications that give each economy confidence that its partners will continue down this path;

2. • Engaging North America in Asia-Pacific open regionalism;

3. • Defining an agenda of strengthening the “public goods” that facilitate trade. The measures covered by this agenda can profitably include region-wide understanding on rules for foreign investment; enhanced efficiency and compatibility in the provision of tangible international public goods such as transport and communications infrastructure; mutual recognition of standards; greater harmonization of legal and administration procedures; and effective means of resolving potential disputes.