KL set to reject APEC trade institutionalization

KL set to reject APEC trade institutionalization

By Ong Saw Lay

KUALA LUMPUR (AFP): Malaysia, more eager to advance its idea
of an economic caucus for East Asia, is set to reject plans to
institutionalize a trade liberalization process for the Pacific,
officials and analysts said Wednesday.

Clear indications were given by Malaysia's Minister of
International Trade and Industry Rafidah Aziz on Tuesday that
Kuala Lumpur would oppose "such lofty ideals to institutionalize
trade liberalization within the Asia Pacific Economic Cooperation
(APEC) process."

Malaysian trade officials said Kuala Lumpur was also to reject
plans to formalize what seems to have become an annual summit of
APEC leaders.

"It started off with an informal APEC summit in Seattle hosted
by the US. Indonesia is saying there is going to be one at the
Bogor meeting and Japan has said it plans to do the same next
year -- where will all these end up?" a top Malaysian government
official asked.

Malaysian Premier Mahathir Mohamad was called a "recalcitrant"
by his Australian counterpart Paul Keating when he shunned the
APEC summit held in November last year in Seattle.

Analysts said Malaysia was worried APEC's consolidation would
subsume and dilute the influence of the Association of Southeast
Asian Nations (ASEAN), whose leaders only meet once every three
years.

The 27-year-old ASEAN groups Malaysia with Brunei, Indonesia,
the Philippines, Singapore and Thailand.

"Other members may view it differently for apparent reasons.
Singapore, for example, which survives on strong trading links
with the world, is all for a strong APEC and an APEC free-trade
zone," said the official.

An 11-point draft obtained by AFP in Jakarta ahead of the
Bogor meet says APEC wants advanced industrial countries to
substantially reduce or remove trade barriers faster, at least by
the year 2010, while developing economies should meet a 2020
target date.

But Rafidah said: "APEC is not an institutionalized body,
everything that it wants to conclude has to be done on consensus
and nothing that APEC agrees to is binding on any member."

China has joined Malaysia's camp, saying last week it was
cautious about adopting any specific APEC timetable.

"We are all for free trade ... but there is a danger of being
dominated by the big powers in APEC," said Kamil Jaafar,
secretary-general of Malaysia's foreign ministry.

Malaysia feared that major developed nations would exploit
APEC to pursue what they failed to achieve during multilateral
trade negotiations within the General Agreement on Tariffs and
Trade (GATT), officials said.

Mahathir had said in 1992 it would leave APEC if there was
evidence it was being used for other purposes.

Officials said ASEAN as a group did not want APEC's industrial
nations to gain favored access to the booming region's market of
some 300 million people without reciprocal benefits.

Malaysia, which abhors the U.S. dominance of APEC, has more at
stake.

It prefers to see a quick take-off of its 1990 proposal of an
East Asian Economic Caucus, that does not include the United
States. Washington has opposed it as a budding trade bloc.

APEC, formed in 1989 with headquarters in Singapore, groups
the six members of ASEAN, and Australia, Canada, China, Hong
Kong, Japan, South Korea, Mexico, New Zealand, Papua New Guinea,
Taiwan and the United States.

Chile is due to join as APEC's 18th member when the forum
meets in Bogor from Nov. 15.