Farm row haunts Osaka meet

Farm row haunts Osaka meet

By Keiji Urakami

TOKYO (Kyodo): Japan's leadership as the chair of this year's Asia-Pacific Economic Cooperation (APEC) forum has already been questioned by other APEC members as the chances of settling the controversial farm issue in APEC talks dwindle almost to zero.

If the issue does go unsettled, Japan's standing in the global community will be significantly tainted -- and more importantly, the grandiose scheme envisioned by APEC's 18 leaders in Bogor, Indonesia, last November, will be dead in the water.

Japanese APEC officials repeatedly say they will continue to look at every possible way to break through the impasse -- until the very end of the informal APEC summit in Osaka on Nov. 19.

Despite their resolve, comments and opinions aired both by conference sources and even APEC delegates after the recently completed high-level APEC session in Tokyo, the last chance before the Osaka APEC, suggest things are going for the worse.

Kobsak Chutikul, the Thai chief APEC delegate, said feuding over agriculture has become so deep that the issue has gotten out of the bureaucrats' hands. "There has to be a political decision by APEC leaders."

At stake is whether or not to grant special treatment to agriculture by excusing it from APEC's principle of "comprehensiveness" which calls for uniform application of APEC free trade rules to all industrial sectors.

Japan and three other members -- China, South Korea and Taiwan -- have demanded that the principle not be applied to sensitive sectors like agriculture.

But the farm goods-exporting camp, spearheaded by the United States and Australia, have reacted strongly against the proposal, saying no exception should be allowed.

That structure of division surfaced at the previous APEC high- level meetings in Hong Kong and Singapore and was carried over into the Tokyo meeting that began last Monday.

But the Tokyo meeting, as expected, failed to produce fruitful results.

Hirotomo Seki, co-chairman of the high-level Japan APEC round and chief of the Japanese team, acknowledged after the session that "No accords were struck over some general principles, including comprehensiveness."

But he downplayed the seriousness of the failure, reminding reporters of a broad agreement reached at the same Tokyo meeting on the less contentious economic cooperation among APEC members.

As for the farm issue, Seki said, "I hope the problem will be resolved before the Osaka APEC," adding, "We have one full month ahead of the Osaka summit."

Japan, as the host of this year's APEC round, is under pressure from both camps to take a stronger lead to get things rolling.

Ban Ki Moon, the head of the South Korean delegation, said, "You (Japan) can't always just take an objective and neutral position."

But Japan is also up against strong criticism from the other camp. The Thai delegation's Kobsak said, "We should not exclude any one sector from the very beginning."

"If one starts to say we can't do it, every country will start to say we can't do it," said Kobsak.

Australian Trade Minister Bob McMullan said, "I don't think the majority (of APEC members) would accept a proposal suggesting that agriculture should be absolutely excluded."

Thailand's Kobsak says he cannot understand why Japan takes the APEC farm issue so seriously. "We can't understand why this is such a big concern."

Even under the comprehensiveness principle, "flexibility" is already ensured in actual implementation, he said, citing what he views as two-stage safeguards.

Deadlines for APEC's trade and investment liberalization are set in two phases -- 2010 for industrial economies like Japan and 2020 for developing economies, he said.

Kobsak also said consensus has yet to be formed over the definition of "free and open trade and investment," the phrase used by the APEC leaders in the Bogor Declaration.

"Most of the APEC members are asking 'What's the problem?'," he added.

Even Japanese bureaucrats sense there might be no problems with farmers if Japan dropped its demand on the farm issue.

No APEC member believes the comprehensiveness principle would immediately bind agricultural activity in APEC states, said one Japanese APEC official who declined to be named.

Nevertheless, the Japanese government feels itself to be in a political bind, trapped between its powerful farm lobby, led by the Liberal Democratic Party -- one of the three ruling coalition parties, and the APEC exporting majority.

It fears that any further move to liberalize the farm sector could trigger anew the wrath of farmers already angered by partial rice market opening under the Uruguay Round accords.

Japanese lawmakers representing agricultural constituencies recently visited Washington and urged the U.S. to accept Japan's demand that agriculture be given special treatment within APEC.

But U.S. Trade Representative Mickey Kantor flatly rejected the request put forward by Kabun Muto, former foreign minister and head of the delegation, saying the principle of comprehensiveness should be upheld for all sectors.