APEC trade ministers to hold talks on SARS, closer trade

APEC trade ministers to hold talks on SARS, closer trade

Dow Jones, Bangkok

The challenge posed to close trade cooperation by the Severe Acute Respiratory Syndrome (SARS) epidemic is likely to dominate talks among trade ministers from the Asia-Pacific Economic Cooperation forum in Thailand next week.

Grappling with a sinking tourism industry, falling export demand and slowing economies, member countries will discuss ways to minimize the impact of the disease on business confidence and mobility.

"We will talk about the impact of SARS to trade and how the members will cooperate to reduce it," Thai Commerce Minister Adisai Bodharamik told a news conference earlier this week. "It's a current issue affecting several member countries."

Adisai said the June 2-3 talks in Khon Kaen in northeast Thailand will be informal and will aim at building a climate of understanding and friendship among member countries.

Piamsak Milintachinda, head of the APEC Secretariat, said earlier in a statement that trade ministers will assess the economic and social impact of SARS, look at progress made in containing the disease and set plans in motion to enhance business mobility and facilitate trade expansion.

The 21-member forum includes some of the of hardest hit nations from SARS, such as China, Taiwan and Canada.

Even though the deadly virus outbreak is off its peak in most affected countries, tourism and export demand are likely to suffer more lasting implications, analysts said.

According to the Asian Development Bank, Hong Kong, Singapore and Taiwan are expected to be hit the hardest, with growth in 2003 declining by 1.8 percentage points, 1.1 points and 0.9 of a point, respectively, if the SARS impact extends until the end of June.

Thailand, which hoped that hosting this year's APEC talks would help promote its vital tourism industry, has seen tourist arrivals drop by more than 30 percent in the past two months as a result of SARS and the war in Iraq.

Since it first emerged last November in China, the disease has killed at least 753 people globally and sickened more than 8,300.

APEC, set up in 1989, consists of 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.

With a combined population of more than 2.5 billion, APEC countries generate a gross domestic product of US$19 trillion, or 47 percent of international commerce.

With measures to prevent the spread of SARS through travel already burdening airlines, APEC officials will also discuss ways to face the cost of increased security in international trade and air traffic.

Last year APEC leaders agreed to a package of measures designed to strengthen security against terrorist threats while simultaneously boosting trade efficiency, known as Secure Trade in the APEC region or STAR.

But Adisai noted that some countries may not be ready to install new baggage screening machines and other security equipment by 2005, as agreed in the plan, due to their high cost.

Other topics on the agenda, include APEC's role in the World Trade Organization ministerial meeting in Cancun, Mexico in September and steps to reduce transaction costs among member countries. The Cancun meeting is expected to be a key point in the current Doha round of WTO talks running through 2004.

U.S. Trade representative Robert Zoellick will attend the APEC meeting and may elaborate on recent comments that appeared to link national security with trade policies as evidenced in the quick endorsement of a free trade agreement with Singapore, a U.S. ally on Iraq and the war against terrorism.