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.