APEC ministerial talks start today

By Endy Bayuni

JAKARTA (JP): The ministerial meeting of the Asia-Pacific Economic Cooperation (APEC) forum gets underway today to discuss how far they want to push the idea of a free trade in the region.

At the top of the agenda in the two-day meeting is the review of reports submitted by two independent groups concerning the idea of a free trade pact.

One report, by the APEC Eminent Persons Group, recommends that the region establishes a free trade area by 2020. Another, by the Pacific Business Forum grouping business communities, wants APEC to set a 2010 deadline.

APEC, established in 1989, groups 18 countries whose economies are "market driven." They are the United States, Canada, Mexico, Chile, Japan, South Korea, China, Hong Kong, Taiwan, Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, Papua New Guinea, Australia and New Zealand. Chile was admitted last year and is making its APEC debut today.

With a combined population of two billion people, APEC's 18 members represent about 40 percent of the world's population. Their combined GNP (Gross National Product) is about half of the world's.

The APEC trade and foreign ministers gathering in Jakarta for their sixth annual meeting however are not committed to the recommendation of either of the two groups on the free trade proposals.

In fact, in the run up to the current APEC meetings, a number of countries, most notably Malaysia and China and to a lesser extent Japan, have expressed apprehensions about APEC moving too rapidly. At the opposing end are Australia, the United States and Singapore, which are best placed to take the most advantage from a free trade area in the Asia Pacific region.

This leaves Indonesia as the host nation with the task of striking a compromise between the two opposing camps.

Consensus

Given that all decisions within APEC must be based on a consensus, it needs only the opposition of one member to foil the attempt for APEC to make some kind of commitment on free trade.

Wisber Loeis, the director general for foreign economic relations at the Indonesian Ministry of Foreign Affairs, explained recently that APEC is indeed moving towards a "freer trade" but he pointed out that this is not the same as moving towards a free trade area.

One of APEC's objectives when it was created in 1989 was to liberalize trade in the region in a manner consistent with the principles underlined by the General Agreement on Tariffs and Trade.

Free trade and freer trade are not necessarily the same.

The latter, as Wisber pointed out, refers to more openness and transparency and greater equality in international trade. The first refers to the complete removal of all forms of tariff barriers irrespective of the disparity in the stages of economic development of the countries in the region.

Benefits

While most members agree on the benefits of trade liberalization measures, the developing countries fear that moving towards a free trade pact too early would lead to an even greater economic domination of the economic giants.

The free trade proposals however will remain in APEC's agenda whether or not the Jakarta meeting agrees on setting a deadline.

Any breakthrough on this front will likely be made at the APEC Economic Leaders Meeting which President Soeharto will host in nearby Bogor next Tuesday.

Supporters of the free trade area could still pull it off in Bogor. A declaration to be read out at the end of the Bogor meeting is expected to address the free trade area but whether or not a deadline is mentioned is still the subject of negotiations between the representatives of the 18 countries.

The ministerial meeting in Jakarta will still make some progress in other fronts, all seen as equally important parts of the move towards greater trade liberalization measures in the region.

Most of the work, including the tough negotiations, was carried out by APEC's senior officials who met on four occasions over the past year. The last one concluded yesterday.

Further negotiations and deliberations will take place today and tomorrow by the ministers over one or two points which their officials failed to iron out, and over the final version of the various joint communiques and declarations to be issued at the conclusion of the meeting which, barring any hitch, is scheduled for Saturday afternoon.

The ministers will also go over many of the recommendations made by their senior officials and then adopt them.

These include the establishment of the Committee on Economic Trends and Issues, the appointment of a task force to revamp the role of APEC's secretariat now headquartered in Singapore.

The ministers are also expected to try to resolve and push for the endorsement of Non-Binding Investment Principles prepared by the Committee on Trade and Investment. The committee reached a deadlock and the senior officials could not unravel the dispute caused by United State's refusal to give its endorsement.

Developing countries

Indonesia has taken full advantage of its one-year chairmanship of APEC since January by pushing its agenda to promote the interests of the developing countries within APEC.

Four issues, or areas of cooperation, have been thrust into APEC's agenda, thanks largely to the insistence of the host nation. They are on human resources development, the promotion of public and commercial infrastructure, the integration of the private sector into APEC's processes and improving the competitiveness of small and medium enterprises.

Indonesia made progress on all four issues.

A declaration on human resources development will be issued at the conclusion of the meeting tomorrow and the infrastructure issue will be formally adopted in APEC's agenda. The forum also established the Asia Pacific Business Network, a forum of the private business sector. Work on the issue of small and medium enterprises has also began.

All these four were the work of Indonesia during its leadership, and are the highlights of its one-year tenure of the APEC leadership which ends on Dec. 31.

But if a consensus is reached on the regional free trade idea, then this will eclipse the four issues.