Asia-Pacific free trade plan in limbo

Asia-Pacific free trade plan in limbo

KUCHING, Malaysia (Reuters): A Pacific Rim trade liberalization plan is being held up by several countries which are unwilling to accept deadlines to open their economies, delegates to a regional meeting said on Saturday.

The holdouts at the gathering of senior officials of the Asia Pacific Economic Cooperation forum were not immediately identified.

But delegates said the Malaysian chairman of the meeting was consulting individually with the members which were opposing elements of the early voluntary liberalization program (EVSL).

Senior officials are meeting here to lay the groundwork for their trade ministers, who meet in Kuching city on Borneo island on June 22-23 in the final run-up to the annual APEC summit, set this year for mid-November in Kuala Lumpur.

The EVSL is slated to begin next year. The actual date will only be announced after the two-day ministerial meeting.

Delegates said the current APEC meeting was to set a timetable for liberalization of trade in nine industry sectors beginning in 1999, but said Asia's financial crisis could delay its implementation.

"There seems to be a great deal of support to continue moving forward. But there are several economies who have concerns," U.S. Ambassador to APEC, John Wolf told reporters.

"We feel that for (EVSL) to go forward we need critical mass," he said.

Senior officials have extended the meeting into a third day to discuss EVSL.

If the talks remain inconclusive, the matter will go to the ministers for resolution, delegates said.

"We do not conclude here. In November, the leaders and ministers will meet," Wolf said.

Some delegates said that economies facing problems, led by Japan, want more flexibility on implementing the measures, which were finalized at the annual APEC summit in Canada last November.

There was no immediate comment from the Japanese delegation, but a senior Japanese official denied on Friday that his country was backtracking.

"Not at all, we have made a lot of effort (to push EVSL)," said Minoru Shibuya, deputy director general in Japan's Ministry of Foreign Affairs.

Another Japanese official said as long as the liberalization program remained voluntary, Japan would support it.

"The (debate) is about timeframe," said a delegate from Taiwan.

Asked about the reluctance of Chile and Mexico to participate in the EVSL process due to their demands for broad-based liberalization, Wolf said: "We all agree there should be broad- based liberalization, but there is also room for EVSL."

A South Korean delegate said the problems were not insurmountable.

"I think we will overcome this. EVSL will go ahead," he said. The nine sectors covered by the liberalization program are environmental goods and services, fish and fish products, forest products, medical equipment and instruments, telecommunications mutual recognition agreement, energy, toys, gems, jewelry and chemicals.

"We should have completed work on the nine sectors here in Kuching and had action programs for the last six by November. But, I think one could accept that the circumstances of the last six months could be seen as having slowed the work down," a U.S. official said.

APEC has targeted a complete freeing up of trade between its members by 2010 for developed countries and 2020 for developing economies.

Accelerated liberalization has been planned for 15 sectors. APEC groups Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Philippines, Singapore, South Korea, Taiwan, Thailand and the United States.

Peru, Vietnam and Russia, which are scheduled to join APEC at the November summit, are participating in the meeting as observers.