The message, loud and clear

The message, loud and clear

There is, we think, a strategic reason why the APEC economic
leaders went to such length in their Bogor declaration to
elaborate the thoughts and rationale underlying their agreement
on free and open trade and investment in the region and the
phases and principles in which the goal will be achieved. The
leaders wanted to remove any doubts among countries outside the
region as to what APEC member economies will create and to end
debates within the forum itself about what would be the character
of the free trade.

The message about the free and open trade and investment
liberalization, as explained in the 11-point declaration, is very
loud and clear. The free trade concept the 18 economies will
develop is fully based on the GATT/World Trade Organization
rules. It will be an open regionalism and not an inward-looking,
closed trading bloc. In fact, the leaders went further by
declaring that APEC will take the lead in strengthening the open
multilateral trading system, deepening and broadening the outcome
of the Uruguay Round of GATT negotiations. They agreed to a
standstill under which they will endeavor to refrain from using
measures which would have the effect of increasing levels of
protection.

The message, in our view, is very important to put a complete
end to the endless debates since late last year about the
characteristics or nature of the vision of trade and investment
liberalization which was created by the APEC leaders in Seattle
last November.

Now APEC, under the new chair (Japan), should immediately get
on the job of designing what American President Bill Clinton
called a blueprint for the visionary concept. Hopefully, the
third informal summit next year in Osaka would be able to adopt
the blueprint to kick off the movement towards free trade in the
region.

Due to the fact that Indonesia, as the chair and the host of
the most recent APEC conference, took much of the initiative to
have the timetable for free trade and investment agreed on at
Bogor, it is duty bound to set an example of moving towards trade
and investment liberalization. Otherwise it will run the risk of
becoming the subject of jokes among the other APEC members.

The consequence is that Indonesia's deregulation drive should
be accelerated, new measures that would increase the levels of
protection should be prevented and procedures and rules that
hinder the flows of goods, services and capital should be
removed.

All that, we think, is a monumental challenge to the
government which, judging from our past experiences, is often
inconsistent with the spirit of its pronounced deregulation and
privatization programs due to strong lobbying from businessmen
with powerful political connections.