Pacific-Rim trade ministers open talks

Pacific-Rim trade ministers open talks

KUCHING, Malaysia (AP): The United States yesterday demanded
that Japan serve as the "engine of growth" for shrinking Asian
economies as two days of talks opened on liberalizing trade in
the Pacific-Rim countries.

"The United States has reiterated time and again Japan must be
an engine of growth for Asia," U.S. Trade Representative Charlene
Barshefsky told reporters after an hourlong, closed-door session
with her Japanese counterpart, Trade Minister Mitsuo Horiuchi.

"It must, in addition to applying physical stimulus measures,
as well as dealing appropriately with the banking sector,
deregulate and open its economy," said Barshefsky on the first
day of talks between trade ministers of the 18 members of the
Asia-Pacific Economic Cooperation forum.

"These APEC meetings are a test of Japan's willingness to do
just that," she said.

Atsuo Shibota, a top official in Japan's Ministry of Trade and
Industry, said Tokyo believes its 16 trillion yen (US$118.5
billion) stimulus package and tax cuts will boost its
deteriorating economy and reduce its trade surplus with the
United States, which has risen 41 percent since May 1997.

Malaysia, one of the APEC countries socked hard by the
yearlong Asian economic crisis and the APEC host, also politely
called on Japan to put its house in order.

"We in Malaysia, we don't' want to tell Japan what to do,
definitely not," said Malaysia Trade Minister Rafidah Aziz. "But
if Japan takes whatever is necessary domestically, that will have
the necessary positive impact for the region."

The U.S. and Japanese strategies for lifting trade barriers
and lowering tariffs for some US$1.5 trillion worth of goods and
services differ widely.

In negotiations leading up to the talks, senior-level
officials indicated Japan was holding up a plan to begin
liberalizing trade in nine industries by next year.

APEC's mission is free trade among the developed member
nations by 2010 and developing countries by 2020.

Negotiators are striving to eliminate tariffs and other trade
barriers in the areas of environmental products and services,
energy, fishery, forestry, toys, jewelry, medical goods, chemical
products and telecommunications.

The liberalization process is slated to begin in 1999, based
on a "early voluntary sectoral liberalization" agreement reached
at last year's APEC summit in Vancouver and expected to be ready
for final signatures by the APEC summit of world leaders in Kuala
Lumpur in November.

The United States -- which helped to stabilize the Japanese
currency last week by buying up US$6 billion in yen -- has said
Japan's signing on to the full package was crucial to the future
of EVSL.

Barshefsky reiterated Monday the U.S. intended to stand by the
EVSL agreement reached in Vancouver. "We will await whether Japan
exhibits the same rules," she said.

Atsuo Shibota, a top official in Japan's Ministry of
International Trade and Industry, told reporters that Horiuchi
told Barshefsky during their talks that fast-track liberalization
should be carried out on a voluntary basis.

He added that full APEC participation would "be very
difficult" if countries reluctant to open their markets were
denied flexibility in setting free-market schedules.