Free trade, Japan woes on APEC agenda

Free trade, Japan woes on APEC agenda

KUCHING, Malaysia (DPA): Trade liberalization and the ailing Japanese economy are set to top the agenda when trade ministers from 18 countries meet in Kuching on Malaysian Borneo on Monday for their annual Asia-Pacific Economic Cooperation (APEC) forum.

The two-day meeting, which will also be attended by members- designate Russia, Vietnam and Peru, comes at a time when APEC's East Asian members are struggling to overcome a year-long battle against sharp currency devaluations and economic slowdowns.

Japan, the world's second-largest economy which was once seen as the locomotive that could pull the troubled region out of the economic doldrums, has now proved unable to revive its own stagnant economy, further threatening the region and the world economy.

The United States' delegate, Trade Representative Charlene Barshefsky, is expected to lead a push for Tokyo to carry out promised tough economic reforms to stimulate domestic demand and to prop up the ailing yen.

The grouping's trade ministers will also be expected to renew their commitments to free trade despite the internal problems posed by the financial turmoil.

At last year's Vancouver summit, APEC leaders agreed that further trade liberalization was the best way out of Asia's economic turmoil.

However, the crisis has worsened since then and the priorities of some members countries may have shifted. Since the crisis began in early July 1997, South Korea, Thailand and Indonesia have had to accept multi-billion dollar rescue packages, while recession now looms in Malaysia, Singapore and Japan.

Many members are now preoccupied with salvaging their troubled economies and appeasing growing social discontent rather than ensuring that APEC's trade liberalization goals are kept, sources said.

Rafidah Aziz, Malaysia's International Trade and Industry Minister and the chair of next week's APEC meeting, said recently that the regional economic woes made it difficult for member states to practice global liberalization.

However, APEC sources said that despite the reservations felt by some Asian members, the meeting is expected to endorse a call for greater "implementation and improvement" of trade liberalization, which is a cornerstone of U.S. policy on APEC.

Australian experts are drawing up a soon-to-be completed study on the impact of trade liberalization on APEC economies.

The study is among topics on the agenda of a three-day meeting by APEC senior officials, which began Thursday, as a run-up to the ministerial meeting. The study will eventually be submitted to APEC leaders at their summit in Kuala Lumpur in November.

Noor Adlan Yahaya Uddin, the executive director of the Singapore-based APEC secretariat, said the study was intended as a "public affairs campaign" to counter a possible "resurgence" in protectionist tendencies among crisis-hit members.

He said that although there were no indications of APEC members wanting to "put the brakes" on free trade, he personally felt that "some have read certain signs of a resurgence in protectionism".

APEC has set a target of trade liberalization by 2010 for developed members and 2020 for developing ones.

Nine sectors have been identified under APEC's Early Voluntary Sectoral Liberalization (EVSL) program - telecommunications, toys, forest products, fish products, gems and jewelry, medical equipment and instruments, environmental goods and services, energy and chemicals.

Six more are in the process of negotiation for possible inclusion under the package - civil aircraft, food, natural and synthetic products, fertilizers, automotive and oil seeds.

The trade ministers are also expected to review progress on various APEC work programs such as on electronic commerce, science and technology, human resource development, and on streamlining the APEC structure by the year 2000 due to the expanding membership.

APEC now comprises 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.