APEC trade liberalization: Towards open regionalism<\/p>\n
By Ippei Yamazawa<\/p>\n
TOKYO (JP): At the informal Leaders Meeting in Bogor it is
\nexpected that the Asia Pacific Economic Cooperation leaders will
\nannounce a bold trade liberalization program for the APEC member
\neconomies. However, the Asian leaders seem to be concerned about
\nthe emphasis on trade liberalization and the seemingly hasty
\npolitical initiative taken by non-Asian leaders. The leaders'
\ntrade liberalization proposal is related to the Eminent Persons
\nGroup (EPG) report. The concerns raised in Asia are caused by two
\nmisunderstandings.<\/p>\n
First the EPG report does not just recommend trade
\nliberalization, but recommends endorsing a balanced package of
\ntrade facilitation, technical cooperation and trade
\nliberalization. With regard to trade liberalization the EPG
\nreport recommends that all three levels be liberalized;
\nmultilateral, unilateral and APEC level. It suggests that the
\nAPEC members start trade liberalization by the year 2000 and
\ncomplete it within ten, fifteen, and twenty years depending on
\nthe member's stage of development.<\/p>\n
The report also recommends that the APEC members should
\nstrengthen the global trade regime through ratifying the Uruguay
\nRound agreements, implementing it as scheduled, and transforming
\nthe GATT into the World Trade Organization (WTO). It also
\nencourages individual member governments to pursue their
\nunilateral liberalization for their own sake. The EPG report also
\nrecommends that various programs for trade facilitation and
\ntechnical cooperation be implemented as soon as possible,
\nbalancing the package of recommendations. Technical cooperation
\nprograms are given top priority by the developing APEC member
\ncountries.<\/p>\n
The initiative for the bold liberalization program has come
\nfrom non-Asian leaders, but belief in the market mechanism
\nprevails widely in the Asia Pacific. This has been the driving
\nforce underlying unilateral liberalization implemented by many
\nAsia Pacific economies. Thus, in principle the Asian leaders
\nshould also support trade liberalization. Furthermore, the
\nmotivation behind the non-Asian leaders' proposition are partly
\nshared by the Asian leaders as well. It is to send a signal of a
\nstronger political commitment to APEC and to offset and
\naccelerate the waning momentum for liberalization at the
\nmultilateral level.<\/p>\n
It is understandable that some leaders may hesitate to
\nundertake bold liberalization because of the adjustment problems
\nthat will face some of their domestic industries. However, every
\ncountry has a few of these \"sensitive\" industries and the aim of
\nAPEC is to help these industries adjust. Some Asian leaders are
\nuncomfortable with this ambitious program, but it will be
\ndetrimental if these Asian members are left behind by the APEC
\nprogram. The APEC leaders should try hard to address to these
\nconcerns in Bogor and modify the agenda to keep these hesitant
\nAsian leaders within APEC while encouraging them to join the
\nliberalization program.<\/p>\n
It is hoped that the Bogor statement will declare APEC's
\ncommitment to trade and investment liberalization as soon as
\npossible and to call for an immediate halt to trade restrictions.
\nThe liberalization program should be adopted through a consensus
\nand implemented in a gradual, GATT-consistent manner. APEC should
\nalso declare its commitment to fully implement the Uruguay Round
\nagreements and the change to the WTO.<\/p>\n
APEC needs to commit to implementing cooperation programs
\nsupplementary to trade liberalization at the earliest possible
\ntime.<\/p>\n
The Bogor Statement should also support China's and Chinese
\nTaipei's entry in GATT and the WTO so that trade liberalization
\nprograms can be pursued by all APEC members in the emerging WTO
\nregime.<\/p>\n
The leaders of the APEC member economies are expected to
\ngive a signal of strong political will with regard to trade
\nliberalization in APEC in the Bogor Statement. However, the
\ndetails of implementation will be left to ministers and senior
\nofficials after the Bogor meeting. The EPG Report suggested that
\nit should be up to individual members whether they will apply the
\nliberalization achieved within APEC to non-members on an
\nunconditional Most Favored Nations (MFN) basis or on a reciprocal
\nFree Trade Agreement (FTA) basis.<\/p>\n
Two models have been identified for possible implementation
\nwith different adjustment periods based on the present level of
\nprotection in the individual member economies. The first is an
\nacross-the-board reduction of tariffs and non-tariff barriers
\n(NTB) down to virtually zero. The second is a sector-by-sector
\nliberalization. The sectors will be selected by consensus and
\nwill likely included the new areas of the Uruguay Round
\nnegotiation as TRIPS, TRIMS, and services; and the eight
\nmanufactured products (steel, medicine, construction machinery,
\nmedical machinery, beer, spirits, agricultural machinery, and
\nfurniture) agreed on by the Quadrilateral Trade Ministers for
\nreciprocal elimination of protection in July last year.<\/p>\n
The latter model is more feasible considering both the
\ncurrent level of momentum for liberalization among the APEC
\nmembers and their consistency with the GATT and WTO rules. That
\nis, sectoral liberalization can be conducted as an extension of
\nthe Uruguay Round agreement without launching into another round
\nof negotiations as in the case of across-the-board
\nliberalization.<\/p>\n
As for consistency with the GATT and WTO rules, across-the-
\nboard liberalization is necessary under GATT Article 24 if
\nimplementation is on the reciprocal FTA basis. On the other hand,
\nsectoral liberalization can only be implemented on an
\nunconditional MFN basis, consistent with GATT Article 1.<\/p>\n
It is quite plausible that APEC may be able to persuade the
\nEuropean Union (EU) to join the liberalization of the eight
\nmanufacturing products since the EU agreed to it at the
\nQuadrilateral Trade Ministers meeting. APEC members are also
\nlikely to apply liberalization in the new areas to non-members on
\nan unconditional MFN basis because they wish to invite foreign
\ncapital and technology of either APEC member firms or non-member
\nfirms.<\/p>\n
It is important to realize that the new WTO regime will be
\neffected by APEC's liberalization program. If APEC adopts a
\ndiscriminatory strategy against the EU, the world economy will be
\nsplit into two groups. It will be imperative for APEC, with its
\nopen regionalism, to encourage the EU to keep an outward looking
\nstance and promote mutual participation in each other's
\ndevelopment toward the 21st century.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/apec-trade-liberalization-towards-open-regionalism-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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