Singapore's Goh sees 30% trade bonus from APEC

Singapore's Goh sees 30% trade bonus from APEC

WELLINGTON (Reuter): Singapore Prime Minister Goh Chok Tong said yesterday trade could soar by up to 30 percent in a planned Asia-Pacific free zone, but cautioned that working out details would be the real difficulty.

"Based on experiences elsewhere, like in NAFTA (the North American Free Trade Agreement), I would believe that trade can go up by 20 to 30 percent right away from the day tariffs are brought down," Goh said.

Leaders of APEC, the Asia-Pacific Economic Cooperation forum, agreed last week to target free trade in the region by 2010 for industrialized members and 2020 for the rest.

Goh and New Zealand Prime Minister Jim Bolger both said APEC's political commitment to the free trade goal was strong, but hard bargaining lay ahead on the practical steps towards it. "Details we will argue over, but the commitment is there, the target is set," Bolger told a joint news conference.

"As usual, the devil is in the details," echoed Goh.

"Officials will try to perhaps reap maximum advantage for their own country. It's to be expected. There are real difficulties for some countries in lowering tariffs. It will take some time for them to come to the final stage."

Last week's 18-member APEC summit in Bogor, Indonesia, set the ambitious goal of creating the world's biggest free trade zone within 25 years, in a region embracing half the globe's population and commerce.

But it largely papered over the disparities between rich and undeveloped countries. One member, Malaysia, expressed reservations and made clear it would move towards the free trade goal at its own pace.

On track

Bolger and Goh both said their countries were well on track to meet the APEC deadline.

"We have very few items which are subject to tariffs in Singapore, and we'll be looking at new areas where we can open up beyond the GATT-defined trade sectors," Goh said.

Bolger said New Zealand's import tariffs remained at high levels of around 30 percent in some half-dozen areas, but were being reduced. "I have no doubt we will reach the target of 2010 comfortably," he said.

Goh, on a four-day visit to boost trade ties with New Zealand, is due to witness the signing of joint venture agreements in tourism, education and telecommunications.

New Zealanders' sentiment towards Asia has been ambivalent, with only 29 percent favoring Asian immigration and one in four backing Asian investment in a survey published last April.

Asked to comment, Goh warned frankly that New Zealand would be left behind if it failed to welcome foreign investment and open up to Asia, where he predicted economic growth of around eight percent would continue for the next 10 to 15 years.

"If I may pass a message to New Zealanders, they have to decide whether they want to have high economic growth and a high standard of living. I don't think they can depend just on the old agricultural economy and linkages to Europe," he said.

New Zealand exports to Singapore last year totaled New Zealand $257.6 million (US$160.5 million), while imports stood at NZ$238.1 million ($148.3 million). A government report earlier this year said New Zealand businesses had yet to develop the Singapore market to its full potential.