Trade way down agenda at APEC summit

Trade way down agenda at APEC summit

AUCKLAND (Reuters): Leaders of the world's biggest nations gathered in New Zealand on Saturday to talk about trade, but ended up spending most of their time discussing politics.

Massacres in East Timor, Chinese threats against Taiwan and strained Sino-U.S. relations dominated bilateral meetings between the heads of the 21 Asia-Pacific Economic Cooperation (APEC) economies before a summit on Sunday and Monday.

Top of the agenda for U.S. President Bill Clinton and many of the other leaders was the carnage in East Timor, which has dominated talks by APEC foreign and trade ministers who arrived to discuss trade issues earlier in the week.

Set up 10 years ago to push for free trade, APEC has become distracted by politics in recent years since the World Trade Organization has become the main vehicle for opening markets.

This year's APEC summit, grouping countries with nearly half the world's trade and US$16 trillion in economic output, was billed as an overture to the next round of global trade talks due to start in Seattle in November under the auspices of the WTO. But there is little for the leaders to discuss.

A confidential draft copy of the APEC leaders' final communique, due to be released on Monday but obtained by Reuters on Friday, before most of the leaders even arrived in Auckland, contained a collection of bland pronouncements about the value of free markets and a few watered-down proposals.

The statement hailed the Asian economic recovery and pledged further reform of markets to head off future crises, stressing the need to boost financial market transparency and regulation.

It offered "the strongest possible support" to a new round of global trade talks that open in Seattle in November, and calls for the repeal of export farm subsidies.

But the declaration gave only the sketchiest road-map on trade liberalization for the new round of WTO talks, avoiding any proposals capable of offending APEC's diverse membership.

Clinton, Chinese President Jiang Zemin and South Korean leader Kim dae-Jung, all on state visits, arrived to war dances by troops of Maori warriors and Pacific islanders in flax skirts.

A platoon of about 20 bare-chested performers strutted, chanted and waved spears in a "haka" welcome, an indigenous Maori welcoming challenge, before the networking began.

Clinton and Jiang did discuss trade at their 90-minute summit but a large part of it was about Beijing's application to join the WTO this year, which Clinton said he supported but which a top U.S. official said might not be possible because of opposition from the U.S. Congress.

Much of their meeting was taken up with other concerns, such as China's war games this week aimed at intimidating Taiwan after its leader Lee Teng-hui declared that relations with the mainland would be on a "special state-to-state basis".

Reports of the murder of thousands of people in East Timor after the territory's 80 percent vote for independence last month dominated discussions after the United States and several other nations suspended military links with Indonesia.

"This APEC gathering...has seen round the clock diplomatic activity aimed at restoring order in Timor," New Zealand Prime Minister Jenny Shipley told a meeting of business leaders.

Australian Prime Minister John Howard said East Timor would continue to be a central focus.

"The East Timor issue will dominate much of the reporting from this conference and this meeting and will of course bulk significantly in the bilateral discussions and perhaps in some of the general discussions at the meeting of leaders," he said.

Outside the meeting, an orderly group of protesters and a 50- strong police escort marched through Auckland's central business district on Saturday before staging an East Timor freedom rally near the talks.