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.