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.