The Asia-Pacific countries achieved rapid economic growth with the flying-goose model in the 1980s, growth buttressed by export-oriented development strategies and the policy culture in these countries. While Japan and the other Asia-Pacific countries still have strong growth potential, many problems remain, including trade imbalances with the United States and the rise of protectionism there, the Asia-Pacific economies' vulnerability, and the need to consolidate the infrastructure for growth. It is imperative that Japan contribute to the development of the region by responding effectively to these issues and that it strengthen the international trading arrangements by promoting Asia-Pacific cooperation premised on openness. Given the region's great internal diversity, Asia-Pacific economic cooperation can well serve as a model for international economic coordination.
We discuss the significance of environmental cooperation in the Asia‐Pacific region through addressing the growing concern on pollutionhaven formation; standards harmonisation as a trade prerequisite; and the undue reliance on the environmental Kuznets curve. Such an agreement must be supported by the sustainability principle and should capitalise on the favourable empirical response time to international treaties. With these we then examine the negotiation of an Asia‐Pacific Agreement on Environmental Cooperation separate from the Asia‐Pacific Economic Cooperation. Such separation desirability is explained with the help of the Bhagwati principle of harmonisation and free trade, a real options analysis, and the accountability principle.