Struggling for free trade in the real world

Struggling for free trade in the real world

There is so much talk about having a `level playing field,'
but Malaysian Primer Minister Mahathir Mohamad, in this Inter
Press Service commentary, suggests that the size of the players
should also be considered.

KUALA LUMPUR: The APEC Conference in the Philippines last
month called for a global pact to allow free trade in computers
and telecommunications equipment. This sounds good but such calls
have little use for developing nations that do not make as much
information technology items as do industrialized countries.

While liberalization has been a major factor in the rapid
economic growth of Asia-Pacific countries, it must be pursued
with flexibility and close attention to the particular conditions
and needs of each nation.

APEC (Asia-Pacific Economic Cooperation) comprises a very wide
spectrum of economies in terms of both size, advancement, and per
capita income, including some of the world's most, and less,
developed nations. Accordingly, it would be unrealistic to expect
a standard rate of liberalization by all member countries,
regardless of the stages of their development.

To force the less advanced member economies to implement
liberalization measures at a pace and manner beyond their
capacity would be grossly unfair and counterproductive.

The pursuit of liberalization will be good for all APEC
members; it should nevertheless be approached carefully to avoid
causing dislocation or disruption to industries that are at
different stages of development.

An approach premised on progressive liberalization and
flexibility will help assure the sustained growth of these
economies and thus enable them to positively contribute towards
the liberalization process. Furthermore, programmers and projects
to enhance development and redress economic disparities between
the least and most advanced economies in the region are crucial.

APEC must never result in poor members countries becoming more
and more dependent or richer members. Unfortunately, development
cooperation, which constitutes a very important pillar of
cooperation in APEC, has always taken a back seat to market
liberalization and facilitation of direct wholly-owned foreign
direct investments. This is unhealthy and must be corrected.

The 'APEC community' that is envisioned will evolve only if
members display a willingness and readiness to enhance
development cooperation. Given the diversity of the APEC region,
care and ingenuity are essential to achieving substantial
development cooperation.

Opening up the markets of the rich to the poor is meaningless
if the poor have nothing to sell.

Direct foreign investments, which can help enrich a developing
country, should therefore precede market opening and the granting
of national status to foreign companies. Only when the poorer
economies have developed into exporters of services and goods
and processed raw material can they be considered ready to
liberalize their markets.

Just as liberalization has been pursued according to
individual and collective action plans, so we must come up with a
detailed blueprint for development cooperation which includes
action plans encompassing small and medium enterprises, science
and technology, financial flows and infrastructure,
telecommunications and human resources development.

If we can put into effect these development action plans in
the same manner and with the same zeal as the action plans for
market and investment liberalization, we can create in the not
too distant future, an 'APEC community' that is not only
prosperous but more equitable in the distribution of wealth.

Given the different levels of economies and political
development in APEC member economies, it is not inconceivable
that the pace of liberalization and deregulation within each APEC
member country, particularly in the developing members, will
depend on these realities. Political leaders do understand,
however, that domestic policies need to be reviewed to facilitate
cross-border trade and investment.

The objective is to speed up economic development for the
least developed APEC members. While this May be a new approach
for APEC, it is not an uncommon practice in other regional
groupings.

Any attempt to use economic strength or political influence,
or even the power of majority, to ride roughshod over genuine,
justified reservations about the speed and scale of
liberalization would doom the effort to build a cohesive Asia-
Pacific open economic `community'.

Business leaders from the developed APEC economies must
understand these reservations and not lobby their governments to
push for removal of actual or perceived barriers to the business
operations of their firms in other countries, especially in the
developing APEC economies.

APEC is not an ideological grouping of nations. Its main
concern is the economic well-being of its members. If there are
social and political spin-offs from the APEC process and no doubt
there will be -- these should be regarded as a bonus.

The greatest challenge facing APEC business leaders, and some
governments too, is to have enough patience to nurture the
region's immense potential for cooperation and for development.
The building of an Asia-Pacific open community cannot be the
responsibility of bureaucrats and governments only; the business
sector has an equally important role to play.

By working together we can all benefit from this Pacific
dynamism. Asia and Latin America must, through the APEC process
be brought up the level of Europe and North America, not just in
terms of democratization but also in terms of wealth and stature.

Mahathir Mohamad has been Prime Minister of Malaysia since
1981.

-- IPS