U.S. disrupts preparations for APEC Osaka Summit

U.S. disrupts preparations for APEC Osaka Summit

SINGAPORE (AFP): The United States has disrupted preparations
for the November summit of the Asia-Pacific Economic Cooperation
(APEC) forum by backing out of a proposed regional free-trade
mechanism, a top APEC official said yesterday.

"The U.S. has now made a U-turn in implementing a tariff-free
Asia Pacific region by the year 2020," APEC executive director
Shojiro Imanishi told AFP.

Imanishi said Washington wanted a short-term approach to
freeing trade in the region instead of a long-term mechanism to
implement the free-trade plan adopted at the APEC's Bogor summit
in Indonesia last November.

The next summit is to be held in Osaka, Japan, in November.

"They don't want to go as far as 2010 or 2020. They now want a
short-term period of, say, between three and four years," he
said, adding that the U.S. action "threatened" preparations for
the summit.

The summit was expected to adopt a broad mechanism to
liberalize trade and investment in the region from January 1997,
as a follow-up to the Bogor accord.

Imanishi said Washington was against the "concerted unilateral
approach," or CUA, an APEC term that has gained popularity among
the 18 economies that make up the forum, to liberalize trade and
investment.

The CUA is essentially a mechanism which requires an APEC
member to take steps based on a set of guidelines to liberalize
trade and investment unilaterally without reciprocity from other
members, analysts said.

"The U.S. may be worried that it may have to play Santa,
giving out concessions on trade and investment without gaining
anything in return from particularly the Asian economies," noted
an analyst. "As a safeguard, they may want short-term
commitments.

APEC comprises Australia, Brunei, Canada, Chile, China, Hong
Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New
Zealand, Papua New Guinea, the Philippines, Singapore, Taiwan,
Thailand and the United States.

At Bogor, the APEC leaders agreed to launch "free and open
trade and investment in the Asia-Pacific" no later than 2020,
with industrialized members meeting the target a decade earlier.

The United States and most other members agreed at the forum's
senior officials' meeting in Fukuoka, Japan, in February that the
CUA be the mechanism to implement free trade, APEC officials
said.

Based on the Fukuoka meeting and another in Singapore two
months later, as well as papers submitted by individual member
economies, current APEC chairman Japan drew up a proposal
detailing the CUA, they said.

The Japanese CUA proposal listing nine general principles for
trade liberalization and facilitation and 12 specific areas for
action was set to be discussed at another senior officials
meeting in Sapporo, Japan next month.

"Just as we are preparing for Sapporo, the U.S. has come out
with a 180-degree turn, catching many APEC member economies by
surprise. They could have stated their objections at the very
start," Imanishi said.

He admitted Japan's CUA proposal was not fool-proof but added
that changes could be made at Sapporo and two other special
meetings before the Osaka summit.

It is understood that senior APEC officials from Australia,
New Zealand, Hong Kong, Japan and Singapore confronted U.S.
officials at a meeting here last week to seek clarification of
Washington's objection.

"It was indicated at the meeting by the U.S. officials that
Washington's objection was based on a decision by the political
leadership," said an official, speaking on condition of
anonymity.

Washington's objection came three weeks after Sandra Kristoff,
coordinator for APEC affairs at the U.S. State Department,
suggested a select group of APEC leaders hold a dialogue before
the summit in Osaka.