ASEM ministers hope to send positive signal ahead of WTO

ASEM ministers hope to send positive signal ahead of WTO

Peter Harmsen, Agence France-Presse, Dalian, China

Asian and European economic ministers gathering in China hope to
send a strong signal on the need to revive stalled global trade
talks at a crucial WTO meeting this fall, officials and delegates
said on Wednesday.

The Asia Europe Meeting (ASEM) of economic ministers in the
northeastern city of Dalian comes just weeks before the World
Trade Organization (WTO) will seek to breathe new life into
stagnating trade negotiations in Cancun, Mexico.

"If the ASEM meeting can send a positive signal to the Cancun
meeting, then its contribution will be fully realized," Chinese
Assistant Commerce Minister Yi Xiaozhun said.

Delegates agreed that the ASEM economic ministers' meeting
would be an opportunity to express commitment to global trade
liberalization and iron out differences ahead of the September
talks in Mexico.

"It's one of the last chances to exchange views beforehand,"
said a European delegate.

The thorny issue of agriculture, considered the key to
reviving the WTO negotiations, was likely to figure high on the
ASEM agenda, with a focus on tariff reductions and cuts in
subsidies, delegates said.

"The agricultural sector is going to be a very critical issue
in the coming negotiation process," said South Korean Trade
Minister Hwang Doo-Yun. "So at this meeting, of course we will
touch upon this issue too."

European delegates said a recent European Union agreement to
cut farm subsidies that cost nearly half of all EU spending would
be helpful in bridging differences with their Asian counterparts.

"After the political signal the EU has given with respect to
agriculture, we have lifted a taboo," said Gaston Van Duyse-Adam,
Belgium's ambassador to China, who represented his country's
economic minister at the meeting.

"We're coming to zones of agreement more than zones of
contention."

Economic ministers, or their representatives, are scheduled to
meet in two separate Asian and European for on Wednesday, before
a full meeting on Thursday.

The ASEM gathering, which includes officials from China,
Japan, South Korea, seven Southeast Asian nations and the 15
countries of the EU, coordinates and directs trade and economic
cooperation between Asia and Europe.

Apart from global trade, the delegates are also likely to
discuss issues such as the economic aftermath of the Severe Acute
Respiratory Syndrome epidemic in Asia and the Iraq war.

The Chinese yuan -- considered by many to be severely
undervalued -- is an issue that is not on the agenda but may be
discussed on the sidelines, given its importance for many of the
ASEM members.

South Korean Trade Minister Hwang said on Wednesday that his
country was "very much concerned" about the exchange rate of the
yuan.

"The Chinese yuan is a very important factor to the trading
partners, so we are very much concerned about the yuan exchange
rate," Hwang said after meeting Chinese Commerce Minister Lu
Fuyuan in a bilateral setting.

It "should be discussed" if the yuan should lose its peg
against the U.S. dollar, he said.

"Our position is very clear, which is that exchange rates
should be decided by the market," he said.

The yuan has been effectively linked to the U.S. dollar since
1994, allowing Chinese exporters to gain competitiveness because
of the recent decline of the U.S. currency.