Three years ago, the 18 member governments of the Asia-Pacific Economic Cooperation forum pledged to open their markets to trade and capital and turn the region into a free-trade area. Today, they can't even agree on what the term ''free trade'' means. What's worse, now that the Clinton administration is denied the fast-track authority to negotiate trade agreements there is little sign that APEC member leaders and trade ministers will make any progress when they meet later this month in Vancouver.

Yet, it is the Asia-Pacific region's position on free trade that will largely determine whether the global economy continues to grow. The region's political leaders should be keenly aware that the recent market turmoil in Asia has not diminished the urgent need for continued trade liberalization - both within the region and with the rest of the world. On the contrary, it has made market liberalization even more pressing.In some ways, it is America's vulnerability to large shifts in trade with Asia that has contributed to the congressional defeat of the fast-track legislation. Legislators who opposed it found a powerful argument in labor union warnings that the market crisis in Asia will undercut U.S. exports to East Asia, while exports from that region, spurred by ''competitive'' currency devaluations, will skyrocket.

That, according to some estimates, could lead to the expansion of the U.S. annual trade deficit to as much as $300 billion by 1999, compared with $192 billion last year.

To the economic nationalists in Congress, the trade deficit means only one thing - a loss of well-paying American jobs. They don't consider that the U.S. jobless rate is at its lowest level in 24 years, the economy is growing at a healthy pace and inexpensive imports, if anything, keep U.S. prices in check by acting as an inflation relief valve.

The numbers give a clear indication of the growing importance of East Asia for the global, and especially the U.S., economy. Excluding Japan, the region accounted for roughly one-half of the world's growth during the 1990s and nearly two-thirds of all capital investment over the same period. That brought East Asia's outstanding loans to $752 billion, making it the world's leading importer of capital and, potentially, the biggest liability for the international banking system.

Aggressive investment in recent years has made regional players into production powerhouses and turned them into the world's biggest exporters. Today, East Asia accounts for about 26 percent of world exports, compared with 8 percent for Japan and 17 percent for the United States. About one-fifth of U.S. exports go to East Asia.

Japan's economy is also closely tied to those of its neighbors, with one-third of Japan's imports coming from there and 37 percent of its exports going to East Asia.

But APEC's spectacular failure to agree to substantive implementation of a free trade area by the year 2020 confirms that the thinking among its member governments lags far behind economic reality. They also ignore the needs of their business leaders who, in a scathing report released last week, accused their governments of hampering their competitiveness.

The Pacific Rim business leaders, for whom open markets and unimpeded movement of trade and capital is a business necessity, drew up a specific agenda for their governments. Many of their proposals require little more than political will to implement them. Key among the recommendations are measures to ease visa requirements, recognize each other's standards and norms, harmonize customs practices and strictly enforce intellectual property rights.

Asian companies are rapidly adapting to the ''new paradigm'' economy. In their own interest, their governments should follow suit.

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