APEC's 'down payment' on free trade pledge prepared

APEC's 'down payment' on free trade pledge prepared

By Endy M. Bayuni

OSAKA, Japan (JP): Eighteen countries of the Asia Pacific Economic Cooperation (APEC) forum have gathered here for their annual meeting, beginning today, to make a "down payment" on a free trade pledge their leaders made exactly a year and one day ago in the Indonesian city of Bogor.

The two-day ministerial meeting will discuss how each member plans to go about liberalizing their trade and investment sectors to meet the deadlines on regional free trade. The deadlines were set out in the Nov. 15, 1994, Bogor Declaration -- 2010 for developed economies and 2020 for developing economies.

There will not be any concerted or binding trade liberalization measures set out here in Osaka. Each country will just give details of its plan on freeing trade between now and the coming years.

The advanced countries have warned that they will insist on "comparability" to make sure that everyone is deregulating at almost the same pace.

The road to Osaka has not been an easy one.

Since the Bogor meeting, APEC's senior officials have held five meetings -- in Fukuoka, Sapporo, Hong Kong, Tokyo, and finally Osaka early this week -- to draw up an "Action Agenda For the Implementation of the Bogor Declaration", the document that is expected to be endorsed by their ministers tomorrow.

One of the strongest points of contention in the run-up to Osaka is whether or not agriculture could be exempted from the trade liberalization measure as sought by host Japan, South Korea, China and Taiwan.

These four countries are asking for special treatment for what they consider a "politically sensitive" sector. The United States and Australia, supported by the other 12 members including Indonesia, are opposed to any kind of exception.

Compromise

Senior officials meeting here for the last time yesterday were working on a compromise over the issue, allowing "flexibility" within the agreed timeframe, thus supposedly paving the way for their ministers today.

Conference sources, however, said any compromise struck by the senior officials is likely to be a fragile one and ministers from the hard-line countries are likely to ask for stronger commitments on the liberalization of the farm sector from APEC.

Indonesia has a special stake in seeing a successful conference here, for the Bogor Declaration was something that many have attributed to the leadership and vision of President Soeharto.

Indonesia's chief delegate, Coordinating Minister for Industry and Trade Hartarto was not pessimistic despite the polarization over the farm issue.

"I think it is only to be expected that there were to be problems. We had the same thing in Bogor last year," Hartarto said on arrival here on Tuesday.

The annual sixth APEC ministerial meeting also involves their foreign ministers as well as trade ministers.

The ministerial conference will be followed once again by an APEC leaders meeting, their third after Seattle and Bogor in 1993 and 1994 respectively.

Again, as in the last two years, there is no set agenda for the leaders' informal meeting, or a "retreat" as the APEC summits have now come to be called, this time to be held at the Guest House of the 17th Century Osaka Castle. The leaders are expected to iron out any problems that their ministers cannot overcome.

APEC is a loose regional economic consultative body founded six years ago. It now comprises 18 members -- Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, Taiwan, Thailand and the United States.

Indonesia came to Osaka well prepared.

Last May, the government introduced a sweeping economic deregulation package, bringing down more import barriers and slashing import tariffs in virtually all sectors, with pledges of more cuts between now and 2003.

The "May Package" as it has come to be known, will be Indonesia's down payment, officials in Jakarta said earlier.

Indonesia, or rather President Soeharto, has a personal interest in seeing that the Osaka meeting succeeds in establishing a blueprint to free trade based on the Bogor Declaration, which many in APEC attributed to President Soeharto's statesmanship and leadership.

Officials familiar with APEC's processes said agriculture protection is the least of Indonesia's worry because the government subsidy in this sector has been enjoyed by consumers rather than farmers, unlike in Japan and South Korea where farmers are politically powerful.

Flexibility

If flexibility is indeed agreed on here, then Indonesia will likely take advantage of this opportunity to slow down the liberalization of its services sector.

While the row over the farm sector has stolen most of the APEC headlines in the run-up to Osaka, Indonesia is expected to draw the conference's attention to another issue pledged in Bogor which it considers just as important as free trade, if not more so, for Indonesia and other developing countries: development cooperation.

Officials in Jakarta have pointed out that trade liberalization, development cooperation and trade facilitation are three inseparable pillars that would ensure that developing countries would be ready to compete on par with developed countries in the year 2020.

"Let's remember that Seattle in 1993 provided the vision, Bogor in 1994 the common resolve, so we hope that here in Osaka we will come up with an action agenda. The final objective of regional cooperation is to achieve prosperity for its members," Hartarto said.