APEC seeks ways for sectoral liberalization

APEC seeks ways for sectoral liberalization

By Riyadi

MONTREAL (JP): Trade ministers in the Asia Pacific Economic
Cooperation (APEC) have agreed to speed up sectoral trade
liberalization and improve individual action plans.

On the first day of their two-day meeting Friday, several
trade ministers identified sectors for early liberalization, but
others cautioned they should first set out basic principles for
the liberalization before deciding on the sectors.

Indonesia proposed textiles, apparel and footwear should be
designated as a sector for early liberalization as it is
significant to developing economies.

"In this way we would get easier access to the markets of
industrialized economies," Indonesian Minister of Industry and
Trade Tunky Ariwibowo told journalists here Friday evening.

Indonesia is apparently disappointed over the slow progress of
liberalization in textiles and apparel currently pursued by the
World Trade Organization (WTO).

The sector comprises 14 percent of Indonesia's exports, with
value averaging about US$6 billion a year.

Indonesia's proposal gained support from New Zealand, which
said textiles, clothing and leather were among sectors still
protected by high tariffs and the concentration of non-tariff
barriers.

New Zealand Minister of International Trade Lockwood Smith
said sectoral liberalization should include both sectors which
had low protection and some which were highly protected to
increase the region's economic benefits and enhance the
credibility of APEC's liberalization commitments.

According to a 1995 survey by the Pacific Economic
Cooperation Council, highly protected sectors in the APEC region
include textiles, clothing and leather; paper and paper products;
food, beverages and tobacco; forestry and timber; metal products,
machinery and equipment, and fishing.

But the United States and other developed member countries
have their own sectoral priorities.

The U.S. proposed that chemicals and energy resources should
be included among the sectors for early liberalization, Canada
wanted environmental technological products and services and
Japan sought investment.

Japan's state secretary for foreign affairs, Masahiko Koumura,
said the APEC initiative on sectoral liberalization should not
prejudge future negotiations under the WTO agreement.

Tunky agreed and said the APEC forum should serve only as a
catalyst toward plurilateral sectoral agreements like that of the
Information Technology Agreement (ITA), which involved only
countries interested in the agreement.

APEC's agreement on information technology last November paved
the way for the adoption of the ITA by 27 countries, including
Indonesia, on the sidelines of the first WTO ministerial meeting
in Singapore last December.

By March 26 of this year, 39 countries had agreed to the ITA.
They represent over 92 percent of the $500 billion annual global
trade in information technology products.

Canadian Minister of Trade Arthur Eggleton said it was too
early for APEC's trade ministers to decide sectors for early
liberalization at their current meeting.

Trade ministers agreed to ask senior officials to look into
all sectoral liberalization possibilities before their meeting in
August.

"We hope to determine this in the next few months. Certainly
by the time the leaders meet in November, we would be able to
discuss some possibilities," Eggleton said after the first-day
session.

This trade ministerial meeting is the first of a series of
ministerial meetings Canada will host to provide impetus for
APEC's work in the lead up to the APEC Ministerial and Economic
Leaders' Meeting in Vancouver from Nov. 22 to Nov. 25.

In this weekend meeting, trade ministers also reviewed
individual actions plans of each country. Some countries pledged
to improve their action plans.

Canada has undertaken a major tariff simplification
initiative, with legislation proposed to the parliament in April
for implementation on Jan. 1, 1998.

The proposal includes replacement of Canada's seven existing
tariff schedules with one simplified customs tariff, acceleration
of the implementation of scheduled tariff reductions from 1999 to
1998 for most remaining Uruguay Round commitments, manufacturing
input and general preferential tariffs.

It will also remove most tariff lines with rates below 2
percent, round down other rates to the nearest half percentage
point and eliminate over 300 regulations and administrative
procedures.

Australian Foreign Minister Alexander Downer also presented a
list of possible revisions to Australia's initial action plans.
The revisions will be formally announced later this year.

The revision would cover the reduction of tariffs on
information technology products, passenger motor vehicles,
tinplate and aluminum canstock.

Tunky said Indonesia's action plans, based on the scheduled
tariff reduction scheme, were progressing well enough and no
amendments were necessary at present.