Singapore ahead of the pack in APEC

Singapore ahead of the pack in APEC

By Siti Rahil

SINGAPORE (Kyodo): As one of the world's most open trading
regimes, Singapore is a front-runner in pushing the Asia-Pacific
Economic Cooperation (APEC) forum toward its goal of free trade,
but this zeal has created slight friction with other Southeast
Asian nations.

Singapore's support for APEC's efforts at trade and investment
liberalization, facilitation and cooperation is not only aimed at
boosting trade and investment in the Asia-Pacific area but also
to engage major powers such as the United States and China in the
post-Cold War world, Singapore officials say.

When APEC leaders declared their ambitious goal at their
summit in Bogor, Indonesia, last year for APEC to achieve free
and open trade and investment by 2010 for developed member
economies and 2020 for developing economies, Singapore opted for
the faster deadline even though it does not regard itself as a
developed economy.

"We believe in free trade...we therefore want to set an
example," Singaporean Prime Minister Goh Chok Tong said then.

This year, Singapore has urged APEC members to chart a
credible "Action Agenda" for achieving that goal at next month's
ministerial and summit meetings in Osaka and make substantive
"down payments" at Osaka as a show of commitment.

With zero tariffs for almost all goods, Singapore has nothing
to lose but everything to gain from trade liberalization in APEC,
which accounts for 45 percent of world trade.

The government imposes high duties on only a few products such
as motor vehicles -- to discourage car ownership and curb road
congestion -- and cigarettes, in line with its no-smoking policy.

A more liberal trade and investment climate in the Asia-
Pacific region is crucial for the small city state at a time when
the government is urging local companies to venture overseas in
search of business opportunities so as to overcome a chronic
shortage of land and labor, as well as rising business costs at
home.

At the same time, Singapore views APEC as an economic
complement to the ASEAN Regional Forum (ARF) in engaging powers
such as the United States and China in the region.

The Association of Southeast Asian Nations (ASEAN) launched
the ARF last year as a consultative grouping on security in the
Asia-Pacific area.

A credible Action Agenda at Osaka is "critical in shaping a
constructive and predictable post-Cold War pattern of Asia-
Pacific relationships to ensure optimal conditions for growth
into the next century," Goh said last month.

"This is the fundamental strategic importance of APEC. Of
course APEC is an economic and not a political organization. But
after the Cold War, economics, trade, investments and finance now
profoundly influence the international dynamics."

Singapore is concerned about the trade spats between the U.S.,
which is its top trade partner and one of its biggest investors,
and Japan and other Asian economies, which have been reluctant to
open their markets.

It believes that if Asian economies could be persuaded to
liberalize trade and investment in the context of APEC, this will
increase the West's stake in Asia and help assure Asian countries
of ready reciprocal market access in the West.

The republic is also eying the potentially huge Chinese
market. As such it is eager to have China firmly entrenched
within the APEC framework through APEC's program of trade and
investment liberalization, facilitation and cooperation, to make
it easier for China to join the World Trade Organization (WTO).

Singapore's stance on the pace and depth of APEC trade
liberalization is in most cases closer to that of the developed
Western member economies such as the U.S., Australia, New Zealand
and Canada than to its ASEAN peers.

"In ASEAN forums, Singapore says ASEAN should stick together
and that it is committed to the ASEAN spirit. But in APEC,
Singapore officials are ready to do anything fast, even without
ASEAN," said an APEC official from one of the ASEAN countries.

"Singapore doesn't have any tariffs to reduce, so they just
tell other people what to do. This creates a kind of distance
between Singapore and other ASEAN countries."

Singapore's position on APEC is in marked contrast to that of
Malaysia, which has long opposed the institutionalization of APEC
and criticized its dominance by developed Western member
economies such as the U.S. and Australia.

Other ASEAN members such as Thailand and the Philippines, and
even Indonesia, which hosted last year's APEC summit, are also
not really committed to trade and investment liberalization as
they have their own fledgling industries to protect.

ASEAN, which normally strives to speak with one voice at
international forums, has accepted the reality that its members
do not share a common position as far as APEC is concerned.

Since the countdown to Osaka began, Singaporean leaders have
publicly exhorted APEC to move on whenever preparations for Osaka
appeared to be bogged down by the members' differences.

APEC officials from ASEAN said that Singapore has mostly sided
with the views of the Western economies during the five special
sessions of APEC senior officials, which were held this year to
prepare the Action Agenda for Osaka.