APEC leaders to give global trade talks a gentle push

APEC leaders to give global trade talks a gentle push

KUALA LUMPUR (Reuters): Asia Pacific leaders meeting in Brunei
next week are expected to declare their support for a new round
of global free trade talks but shy away from listing specifics
they want on the agenda.

And such caution about commitments may be typical of the
November 15-16 Asia Pacific Economic Cooperation summit meeting
in the tiny oil-rich sultanate, expected to draw U.S. President
Bill Clinton, Japanese Prime Minister Yoshiro Mori and Russian
President Vladimir Putin among others.

Rising oil prices, globalization, regional free trade
arrangements and liberalization of e-commerce services are some
of the issues on the agenda when the leaders of the 21 APEC
members meet.

In all those areas agreement on broad principles may be easier
to reach than consensus on concrete policy steps considering
APEC's diversified membership, which stretches geographically
from Russia to Chile and economically from Third World Papua New
Guinea to Japan and the United States.

Certainly the drive for a fresh round of World Trade
Organization (WTO) global trade liberalization talks will be
soft-pedaled, analysts say.

APEC members account for 60 percent of global gross domestic
product and 45 percent of world trade.

Many are still recovering from the Asian financial crisis in
the late 1990s and several like Malaysia are wary of the risks
posed by globalization, so APEC is unlikely to move too fast on
free trade.

"It will be a sort of a symbolic declaration. But I don't
think they will agree on the specifics to be included in the new
round," Kyung Tae Lee, the incoming chairman of the APEC's
economic committee, told Reuters by telephone from Seoul.

WTO members failed to launch a new global liberalization round
in Seattle last December amid a backlash of violent protests.

"I think to date much emphasis has been placed to help in
building a consensus to launch a new round of WTO. We will
continue to press for it as early as possible," said Lawrence
Greenwood, a senior U.S. State Department official for APEC.

In contrast, Malaysian Prime Minister Mahathir has pledged to
talk about the adverse impact of liberalization on poorer
nations.

"Many (developing countries) are worried about effects of
globalization...whether it is good or bad for developing
countries. It may be good for them (developed countries) but bad
for us," Mahathir said last week.

Malaysia has asked ASEAN Free Trade Area (AFTA) members for
more time to lower tariffs on cars, a move that angered Thailand,
which harbors grand plans for its auto industry.

Mahathir will not be the only leader at the meeting less than
totally enthusiastic about rapid liberalization.

"The South Korean President Kim Dae-jung will put emphasis on
the darker side of globalization exemplified by the digital
divide and income disparity," said Lee of APEC's economic
committee, who is also the president of the Korean Institute of
International Economic Policy.

The APEC leaders are also likely to address the proliferation
of bilateral trade agreements, which some analysts say poses
risks to multilateral trading arrangements.

"The focus will be on sub-regional trading arrangements and
their proliferation and how to ensure that they are consistent
with APEC and WTO," said Jesus Estanislao, a coordinator at the
Pacific Economic Cooperation Council (PECC).

But Greenwood welcomed bilateral free trade arrangements among
APEC members, saying they were building blocks for a stronger
multilateral trading system.

Greenwood also said APEC will focus on measures to take
advantage of recent gains made in information technology to
improve efficiency and productivity in the region.

The immediate problem of volatile crude oil prices threatens
to steal some of the limelight even as the leaders lock horns on
longer term issues like trade liberalization.

APEC is expected to attempt to work out measures to reduce
vulnerability to rising oil prices which threatens to blunt
recovery in many Asian economies, officials said.

"I think that is a very important issue for most of the APEC
economies as many countries are importers and are hard hit by
rising oil prices," Lee said.

Some APEC members such as Brunei, Indonesia, Malaysia, Mexico
and Russia are big oil producers and stand to gain from the
recent surge in prices to their highest level in 10 years.

APEC's Energy Working Group has recommended cooperation among
members to promote alternative energy sources and oil security.

"However, we are looking at couple of things on the supply
side and one of them is a program to help educate and promote
stockpiling regimes in the region," Greenwood said.

APEC groups Australia, Brunei, Canada, Chile, China, Hong
Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New
Zealand, Papua New Guinea, Peru, the Philippines, Russia,
Singapore, Taiwan, Thailand, the United States and Vietnam.