SE Asian states split over freeing farm trade
SE Asian states split over freeing farm trade
By P. Parameswaran
SINGAPORE (AFP): Southeast Asia's commodity-rich nations, sensitive to opening up key farm products even among themselves, go into the APEC summit divided over moves to exempt agriculture from the Pacific grouping's free-trade plan.
Especially sensitive is rice, the Asian staple.
While Thailand is against any special treatment for rice in moves to liberalize trade among members of the Asia Pacific Economic Cooperation (APEC) forum, the Philippines is demanding the opposite.
Malaysia, the lone opponent of APEC's free-trade deadline of 2020, opposes any binding formula to tear down agricultural tariffs while Indonesia feels it cannot go beyond its commitment to an ASEAN plan to open up its farm sector.
Thailand, the Philippines, Malaysia and Indonesia are the nations within the seven-nation Association of Southeast Asian Nations (ASEAN) with significant farm interests.
ASEAN members Singapore and Brunei have no agricultural interests while Vietnam, its latest entrant, is not yet a member of APEC.
Officials said ASEAN was unlikely to take a common position on moves by Japan, China, South Korea and Taiwan to exempt certain sensitive sectors, notably agriculture, from APEC trade reforms.
Farm exporters such as Australia, the United States and New Zealand say that a free-trade plan exempting any sectors would undermine APEC's commitment to tariff liberalization.
The split reflects what Sandra Kristoff, U.S. ambassador- designate to APEC, called "a deep fracture" within the organization which could even lead to a pullout by some members.
APEC's 18 leaders agreed at the 1994 summit in Bogor, Indonesia, to free trade and investment by 2020, with developed economies reaching the target 10 years earlier.
APEC's blueprint -- called an Action Agenda -- for implementing the Bogor commitments is to be debated by its leaders in Osaka on Nov. 18-19.
The host, Japan, has been singled out for criticism for keeping its rice market tightly shut.
"Thailand's stand on the rice issue is that we do not agree with designating rice as a sensitive sector as the APEC Action Agenda should not have any exceptions," said a Thai foreign ministry official.
Thailand is the world's largest rice-exporting country, commanding 30 percent of the world market.
It has a supporter in Singapore, whose Prime Minister Goh Chok Tong warned in remarks published Tuesday that if the farm issue goes unresolved in Osaka, "I would say APEC might begin to weaken and eventually collapse."
"If one country is allowed to exclude one sector for domestic reasons, other countries would begin to exclude their own sensitive sectors in manufacturing," Goh said, adding that the Bogor accord could start falling apart.
The Philippines, a major consumer of world rice exports, strongly opposes the inclusion of rice in APEC's free-trade agenda.
While Manila will not raise the issue in Osaka in deference to its hosting of the APEC summit in 1996, "our position on this issue is non-negotiable," said Edsel Custodio, the Philippines' Assistant Trade Secretary.
Malaysia feels it is unrealistic for APEC to expect that it can crack open the Japanese rice market.
"For seven-and-a-half years the whole world wanted to open the Japanese rice market and we didn't succeed in the Uruguay Round. What makes the APEC promoters feel they can do it in one year?" Trade Minister Rafidah Aziz asked.
"That is living in the world of dreams."
Indonesia, which helped forge the historic Bogor accord, could agree to exclude sensitive primary commodities, including rice and sugar, as it had done under the ASEAN Free Trade Plan which stipulates maximum tariffs of five percent by 2003, a senior official said.
ASEAN members in September decided to set up a panel to resolve the thorny issue of freeing sensitive agricultural commodities among themselves.
The issue of farm liberalization is politically sensitive to many ASEAN members who fear that opening up the sector to foreign competition could threaten the livelihood of their millions of farmers.
"It is difficult for them (ASEAN) to ask Japan to prise open its rice market when they have holy cows which cannot be touched," said Mohamed Ariff of the Kuala Lumpur-based University of Malaya's economics faculty.
APEC groups Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, South Korea, Taiwan, Thailand and the United States.