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.