APEC leaders unlikely to reach agreement on free trade region
APEC leaders unlikely to reach agreement on free trade region
JAKARTA (JP): APEC leaders are unlikely to reach agreement on
the establishment of a Pacific free trade area at their meeting
in Bogor south of here in November due to unavoidable
discrepancies among members.
"Developed members of APEC will likely push for the
establishment of an institutionalized free trade area in the
Asia-Pacific region but the developing members will oppose such a
proposal," executive director of the Center for Strategic and
International Studies (CSIS) Hadi Soesastro said in a gathering
with staff members of The Jakarta Post here yesterday.
Hadi, who is closely involved in the preparation of proposals
for the second leadership meeting of the Asia Pacific Economic
Cooperation (APEC), said that the Pacific free trade area he
referred to as "Pafta" will be discriminatory in nature and
against the principles of the General Agreement on Tariffs and
Trade (GATT).
The chairman of APEC's Eminent Persons Group (EPG), C. Fred
Bergsten of the United States, delivered the group's report to
President Soeharto late last month, calling for comprehensive
free and open trade in the region by the year 2020.
The EPG's 42-page report outlines the initiative of a trade
liberalization program among members beginning in the year 2000
with a completion deadline of 10 years for industrialized
countries, 15 years for newly industrializing nations and 20
years for developing nations such as Indonesia.
APEC groups the United States, Mexico, Japan, Taiwan, South
Korea, China, Hong Kong, Australia, Papua New Guinea, New Zealand
and Canada along with the six members of the Association of
Southeast Asian Nations (ASEAN) -- Thailand, Singapore, Malaysia,
the Philippines, Brunei and Indonesia, which currently chairs the
forum.
Institutionalization
Hadi explained that developed members of APEC will most likely
insist on the institutionalization of APEC to make it possible
for the forum to formulate the modality of the free trade scheme.
"But ASEAN countries, particularly Malaysia and Indonesia,
will surely oppose the institutionalization of the forum, which
will be against their consensus," he said.
ASEAN's Kuching Consensus requires its members to preserve the
association's collective identity and cohesion in facing APEC.
"Furthermore, some ASEAN members will oppose the U.S.
intention to use APEC as a tool to force the European Union (EU)
to open up its market," Hadi said.
He said Indonesia and some other ASEAN countries actually want
APEC members to reduce their tariff barriers gradually in line
with the development of their own economies. The tariff
reduction, in line with GATT principles, should benefit not only
the APEC members, but also non-member countries.
However, Bergsten apparently believed that such a method of
tariff reduction will not attract the United States to follow
because it will allow EU countries to get a "free ride" on the
APEC's liberalization scheme, he said.
If other countries are not allowed to get a free ride, it will
mean that tariff reduction will be effected only for APEC members
and that such a scheme will be discriminatory and against GATT
principles, Hadi said. (fhp)