This island nation takes considerable pride in the steely discipline of its yachting team, which gained worldwide fame by capturing the most recent America's Cup trophy.

This weekend, however, New Zealand has been thrust into the international spotlight by a more fractious crew, one that rarely charts a common course. As it launched its seventh annual summit here in the "City of Sails," the 21-member Asia-Pacific Economic Cooperation (APEC) forum is adrift, divided not only over short-term crises, such as the recent violence in East Timor, but over long-range economic issues that the group was created to address.

In a declaration to be released Monday, drafts of which were leaked to press, APEC members are expected to affirm their commitment to "open, transparent and well-governed financial markets."

The nations also are likely to declare support for a new round of negotiations by the World Trade Organization to lower tariffs on goods and services.

Beyond such vague pronouncements, however, there is little consensus among this group, which accounts for 45 percent of the world's economic output. On trade, where most members had the greatest hope for common action, APEC has made only modest progress toward goals it set for itself in recent years.

In 1994, APEC leaders pledged to eliminate barriers to trade and investment among developed economies in 2010 and among developing economies in 2020. Those targets now seem unrealistic to many members. No new trade liberalization initiatives are on the agenda this year.

Despite expressions of support for new WTO talks, U.S. and Japanese leaders are at odds on how those talks should proceed. At last year's meeting Japan blocked a proposal to cut tariffs that protect its fish and forestry industries.

The United States, meanwhile, retains tariffs or quotas on textiles and many agricultural goods, and has relied on anti-dumping laws to fight steel and other imports. And recently imposed restrictions on imports of lamb are an enormous irritant here in New Zealand and neighboring Australia.

During the Asian financial crisis, APEC choked, ceding leadership to officials at the International Monetary Fund and U.S. Treasury Department. Now, with many of the Asian economies beginning to recover, the group still has arrived at no common view about the what caused the catastrophe and has taken few concerted measures to prevent it from happening again.

In a speech today at a meeting of business leaders from around the region, President Clinton warned against "complacency" on economic matters. "There is still hard work to be done and a great deal to be won on the eve of this new millennium," he said. Clearly, though, the rebound of stock and currency markets throughout the region has slowed efforts in many APEC societies to press ahead with painful restructuring programs.

Late this evening, the group achieved a legitimate breakthrough on the East Timor question, as a core group led by the United States and Australia worked out an arrangement to send a multinational peace-keeping force to the region to halt repression of pro-independence groups in the region. But the APEC meetings here served more as the backdrop than the vehicle for that accord. To the last, the decision drew resistance from key APEC members, notably Japan, which has extensive business and political ties to Indonesia, and China, which views East Timor through the prism of its own dealings with independence advocates from Taiwan to Tibet.

When Clinton was the host for a meeting of APEC heads of state in Seattle in 1993, he boldly proclaimed the gathering to be of historic significance. After a bonding session with other leaders in a native American hut, Clinton spoke in sweeping terms of a new era in which shared interests between the United States and nations around the Pacific region surpassed its traditionally strong bonds with Europe.

In hindsight, many early APEC boosters now say, it was naive to expect so much from an organization encompassing nations as dissimilar as the United States, Russia, Vietnam, Chile, Paupa New Guinea and Brunei. Business executives, especially, are losing patience. APEC's own business advisory council recently warned that APEC had "lost sight of its goals" and needed to make "more serious and substantial commitments" to open stock and currency markets.

"I think [the APEC leaders] are conscious of the all the criticisms about of the relative lack of progress," said Helmut Sohmen, president of Hong Kong-based Worldwide Shipping Agency and chairman of a prominent group of Pacific Rim executives. "That's made all the personalities acutely aware that they can't have another meeting this year where they don't accomplish anything." But what many business executives hoped would be the marquee achievement of this year's gathering--the announcement of an agreement between Washington and Beijing on terms of China's admission to the WTO--has yet to materialize.

In the absence of substantive achievements, the APEC gathering has taken on a festival air. Proceedings began with a troupe of two dozen bare-chested Maori performers who chanted and waved spears in a traditional "haka" welcome. The leaders joined in pressing noses, a customary native greeting.

The sessions also have become a lightening rod for protest. Practitioners of Falun Gong, the sect banned in China, gathered in nearby Victoria Park. Supporters of independence for East Timor clashed with Indonesian students protesting international condemnation of their country.

Then there are local merchants looking for a bit of publicity. Among the favorites this year: a billboard by the dockside eatery Euro advertising its cigar room: "Call us old fashioned, Mr. President, but we prefer smoking them."

Perhaps a more thoughtful slogan was chalked on a blackboard outside the Loaded Hog pub, which offered an alternative interpretation of the acronym APEC: A Perfect Excuse for a Cold one.

CAPTION: President Clinton, center, enters the APEC talks with representatives of member nations meeting in New Zealand at the seventh-annual summit.