Osaka deliverables

Osaka deliverables

Deliverables, down payments and action agenda are some of the buzzwords that reflect the high expectations of the third forum of the Asia Pacific Economic Cooperation (APEC) in Osaka this weekend. The great expectations are understandable, viewed from the smooth process of the realization of the grand visions worked out at the first forum in Seattle in November, 1993 into long- term objectives as adopted in the Bogor Declaration issued at the second leadership meeting in Indonesia last November.

Business organizations in the 18 member economies of the seven-year-old regional forum have expressed great concern that the momentum of cooperation within APEC could diminish if the third meeting does not come out with a concrete action plan.

However, the task of the forthcoming forum will most likely be extremely challenging if the progress in trade liberalization achieved so far, after five rounds of meetings of senior officials to prepare an action agenda, is anything to go by.

Similar to the main obstacle encountered within the multilateral trade negotiations before the World Trade Organization was concluded last year, farm trade has remained one of the most contentious issues in the way of implementing free trade. Japan, China, South Korea and Taiwan, for example, have requested exemption for sensitive sectors as agriculture. Most other members are opposed to such treatment in case it spreads to other sectors, thereby making any agreements to be concluded rather meaningless.

We hope, though, that the farm trade issue does not bog down the whole process of negotiations. Pragmatism will hopefully reign in the process of negotiations. After all, the process of trade liberalization should be a gradual one, conducted unilaterally by each member at its own pace and in its own way. Forcing clear target dates for all sectors in Osaka could be detrimental to possible cooperation in other areas.

Right from the outset, when APEC was founded in Canberra in November, 1989, the forum has been designed to be an overall economic cooperation grouping. Of course, trade is the locomotive of economy and should be placed on top of the agenda. Moreover, when the APEC process was launched, the Uruguay Round of multilateral trade negotiations remained uncertain and bogged down in contentious farm trade issues. So making trade liberalization the flagship of its movement at that time made a lot of sense. But the Osaka meeting should not be wholly preoccupied with the target setting for trade liberalization at the expense of cooperation in other areas.

There are other areas which are no less important for bolstering trade ties within APEC members, especially because obstacles to trade ties are not limited only to tariffs and to what is usually called non-tariff barriers. The agenda of trade and investment facilitation which is also stipulated in the Bogor Declaration is extremely important as well. In fact, businesspeople in most member economies expect more immediate and greater benefits from concrete measures to remove administrative barriers to trade and investment. Some of the expected measures are related to investment principles, the harmonization of standards and procedures, and conformity with customs procedures, transparency and discipline in the use of anti-dumping measures, rules of origin, competition policies and procurement. All these measures will significantly reduce transaction costs and will facilitate investment, which in turn will bolster trade.

There are two other areas which are very important, especially for the least developed members of APEC: economic and technical cooperation; and infrastructure and human resource development. If these areas of cooperation are ignored due to a preoccupation with trade liberalization, the least developed members of APEC may get the impression that APEC essentially serves mostly as a tool for the developed economies to pry open the markets of the least developed ones. Such an impression would surely slow down the APEC process.