Asian woes may influence WTO financial pact

Asian woes may influence WTO financial pact

GENEVA (AFP): Bilateral talks aimed at sewing up a December
global accord to free up financial services resumed here
yesterday as diplomats warned that Southeast Asia's jittery
markets could impede progress towards a pact.

"The vibes are certainly not that good. (Southeast Asian)
countries are a bit preoccupied with their domestic situation
right now. But we haven't reached the end of the line," said
Stuart Harbinson, permanent representative of the Hong Kong
Economic and Trade office here.

Asian support is seen as vital for securing a deal
liberalizing a good part of the world's domestic banking and
insurance markets under the aegis of the World Trade
Organization.

The United States refused in 1995 to jump on board a full WTO
agreement supported by 96 other countries, blaming the lack of
clear commitment to the liberalizing cause from Asian and Latin
American nations.

An interim agreement, in which the U.S. veered away from
granting foreigners automatic access to its financial markets,
was signed instead. That agreement expires at the end of
November.

Negotiators were more optimistic over chances of success this
time around, expectant that Asian countries -- ASEAN members did
submit packages two years ago -- would put forward beefier
offers.

But that was before Thailand hurtled into an economic crisis,
causing currency and stock markets in the region to reel and
sparking an outflow of capital.

"From our contact, our feeling is that at the government
official level, all ASEAN countries are working hard on tabling a
(better) offer," said a Japanese trade source.

"(Whether or not they do) is more a question of the political
climate at home," the source said. "If the climate improves,
there's a fair chance of coming up with something."

The Association of Southeast Asian nations groups Thailand,
Singapore, Malaysia, Brunei, the Philippines, Vietnam, Myanmar,
Laos and Indonesia.

Since July, three improved offers have come through, bringing
the number of countries that have made bolder liberalization bids
in the last two years to 29, including 15 within Europe.
The most recent initiatives come from South Korea, New Zealand
and Macau.

A Thai trade source said Monday Bangkok would not be in a
position to submit a juicier financial services offer in
September.

A period of adjustment was needed, the source said, adding,
though, that Thailand would try to "do something."

The International Monetary Fund has put together a 17-billion-
dollar package to help bail out Thailand's economy, which came
unstuck largely from a mountain of bad bank loans and the baht's
link with the dollar, which Thailand tried to defend with
dwindling foreign exchange reserves.