APEC ministers adopt investment code

APEC ministers adopt investment code

JAKARTA (Agencies): Ministers of the Asia Pacific Economic Cooperation (APEC) forum yesterday adopted an investment code after the United States dropped its earlier objections to three of the 12-point principles only hours before the meeting began.

Although the investment principles are not binding for APEC's 18 members, U.S. officials said yesterday that they still committed members to further liberalization.

Among its principles, the code calls on APEC members to remove barriers to capital exports, treat foreign investors as they do their own, deal with all nationalities on an equal basis, ensure that procedures are transparent, guarantee repatriation of profits, guard against expropriation and avoid double taxation.

Indonesian Coordinating Minister of Trade and Industry Hartarto, who is chairing the APEC ministerial conference, confirmed that the original formulation of the code had been modified to obtain a full endorsement.

Indonesian delegates were quick to play down the significance of the changes.

Bachrum S. Harahap, Hartarto's aide, described the revision as relatively insignificant.

Mari Pangestu, Indonesia's coordinator of the Pacific Economic Cooperation Council's (PECC) Trade Policy Forum, said "I think the concessions are within the statement,"

Mari said the forum had made a commitment to continue improving the code in the future. "I strongly believe that APEC members expect that their documents will be upgradable."

The agreement was reached very late on Thursday by APEC's senior officials as their ministers had dinner.

This helped pave the way for a smooth conference yesterday morning in which ministers simply endorsed various recommendations already hammered out by their officials.

An Indonesian delegate who followed the negotiations closely said Washington at the last minute buckled down under various pressures, including the press publicity which had focused on the contention.

Changes were effected on the principles of performance requirement and national treatment.

U.S. Trade Representative Mickey Kantor, speaking at the end of the first day of the meeting, said the accord committed the 18 members to "ongoing efforts towards the improvement in further liberalization of the investment regime."

Changes

The last-minute changes are "extremely helpful" and Washington is "especially pleased that it's been made clear in two particular areas ... there'll be continuing work on investment issues," he said as quoted by Agence France Presse.

"This is just a beginning," Kantor said, adding that while the investment principles were not binding, "you've got to walk before you run.

"You're not going to break down all the barriers and get countries to commit to binding regimes in the very short run. But we're going to have an increasingly rapid breaking-down of barriers over the next number of years."

Nancy Adams, assistant U.S. trade representative for APEC affairs, conceded the United States, which had been looking for forceful language to protect investors and augment standards to its level, had not got its way entirely in the compromise code.

"The document itself we find acceptable. It's perhaps not as strong as we would like in some areas," said Adams.

But, she added: "For many of these governments to say they even aspire to this was a tough step. It was a tough call."

She said, "the whole idea is to set up something that we are trying to work towards, creating energy and momentum."

"It still helps pull up the practices. These governments are competing for very scarce capital." (Team).