One benefit of having the leaders of the 21 APEC economies gather every year is that they get a chance to meet face to face and address political and security issues and perform tasks that might otherwise be delayed or neglected. But with APEC's reputation at its lowest point since its formation in 1989, the sideline events this year threaten to overshadow the official programme. The danger is that APEC is sliding slowly into oblivion.

In the absence of a credible advance toward the target of free trade and investment by 2010 for developed economies and 2020 for the rest, some members are turning to sub-regional arrangements to reach these goals. More is at stake than the prospect of failure at community building in the Asia-Pacific region, important though this is. If APEC is further undermined, it could eventually put at risk the extent of US engagement in East Asia, part of the original rationale for APEC.

Accounting for more than 40% of the world's population and in excess of half of its output, APEC is in trouble primarily because the two largest economies the US and Japan, have shown no leadership. Mr Clinton, in particular, has allowed global trade liberalisation to stall as he lost control of policy at home by pandering to special interests. Tokyo blocked attempts to pursue a sectoral approach to liberalisation within APEC. APEC agreement in Auckland a year ago to play a leading role in launching another round of multilateral trade talks collapsed at the World Trade Organisation ministerial conference in Seattle last December.

Japan sided with the European Union in proposing a broader agenda than the US was willing to accept. For its part, Washington advocated Western-style labour and environmental standards, opposed by all the developing economies in APEC. Since members are free to set their own pace to meet the 2010-2020 deadlines, adopted six years ago in the Indonesian city of Bogor, it is hard to know if APEC is on track. But the process of "Individual Action Plans," the main means of measuring progress, indicates serious problems. For example, in an assessment of three key areas, the private-sector APEC Business Advisory Council finds that the plans in many cases contain incomplete information about how members intend to fulfil their commitments.

Partly out of frustration with APEC, members are increasingly pursuing what US economist Fred Bergsten calls "alternative institutional arrangements" to "achieve their priority economic objectives." They take the form of sub-regional trade and financial pacts, primarily within East Asia but including a few at the trans-Pacific level. Most are bilateral, such as the free-trade agreement negotiated by Singapore and New Zealand. Singapore is also exploring similar deals with Japan, Canada and South Korea, while New Zealand is in discussions with Chile. Japan is talking to Mexico, South Korea and Canada, and so on.

One proposal would link existing sub-regional undertakings, the Association of Southeast Asian Nations Free-Trade Area and the Australia-New Zealand accord known as Closer Economic Relations. Yet another alternative is Asean + 3, connecting the 10 countries of Southeast Asia with the major powers of Northeast Asia-Japan, China and South Korea. They have agreed to swap foreign exchange reserves if necessary to prevent another regional financial crisis, a move that is expected to lead in time to the creation of an Asian Monetary Fund.

Although the ultimate shape of the grouping is far from clear, one possibility is a free-trade area. The record shows that sub-regional free-trade agreements can be building blocks or stumbling blocks. They are welcome in this case if they have the effect of galvanising a fresh wave of liberalisation that would spread throughout the region and restore momentum to APEC's drive for an open trading and investment environment. But, as the APEC Business Advisory Council warns, they shouldn't detract business or political attention from the primary task of getting a new WTO round of talks going.

In fact, however, sub-regional free-trade agreements can be decidedly harmful, since they immediately create new trade discrimination and additional sources of divisiveness, and in the longer term may entrench interests that might resist broader regional liberalisation. Already one, the proposed Singapore-Japan free-trade agreement, breaches APEC, according to Mr Bergsten, director of the Washington-based Institute for International Economics.

A joint study by the two countries shows that Tokyo isn't prepared to liberalise agriculture, whereas APEC has decided that coverage should be comprehensive, he says. It is regrettable that the heads of state and government who will assemble in Bandar Seri Begawan next week are likely to treat their visit more as a convenient stopover than an opportunity to revive an ailing regional organisation. At the very least, they should insist on the sort of review that would ensure that proliferating sub-regional arrangements don't serve to fragment the Asia-Pacific region.

At best, the premiers and presidents could open a new chapter in APEC cooperation and help secure APEC's institutional future. As it is, heavyweights such as the US are merely offering suggestions that APEC try- again-to build a consensus for a new WTO round. That's rather pathetic given the fiasco in Seattle and the uncertainty surrounding the incoming administration in Washington. Brunei, aware of its limitations as host, is urging a "back to the basics" consolidation and will unveil an initiative to help close the so-called digital divide. But that is unlikely to alter the image of an organisation perceived to have produced little economic and technical cooperation among members and to have contributed even less to the resolution of the regional crisis.