[asia-apec 483] NZ & WTO/APEC: From "Export News"

[Gatt Watchdog]

Geneva trade talks critically timed -
by Warren Head, Export News,
June 22 1998

New Zealand exporters may be unaware of the critical importance of recent
World Trade Organisation meetings on free-trade rules.

The recent WTO meeting of global trade ministers in Geneva had to produce an
outcome that would direct officials in setting out the agenda for the next
round of negotiations.

Trade ministers met against a background of the Asian economic crisis
threatening the development of consistent trade liberalisation.

Australian trade minister Tim Fischer has railed against "evil forces in the
northern hemisphere" who might be happy to let further trade liberalisation
slide.  "I have to be blunt about this; the level playing field remains as
much a fiction today as ever", he says after his return from Geneva.

New Zealand's trade minister Dr Lockwood Smith, with Fischer and other
advocates of sustained momentum, has successfully contributed to speeding up
preparation work for the upcoming WTO negotiations.

Hopes are higher that the United States will come to the negotiating table
with a positive agenda for further reforms after President Bill Clinton
personally attended the Geneva talks which marked the 50th anniversary of the
General Agreement on Tariffs and Trade (GATT).

The 50th anniversary coincides with difficulties being experiences by a
number of WTO member economies as a result of disturbances in financial
markets.

The WTO Ministerial Declaration issued after the second ministerial session
emphasises that keeping all markets open must be a key element in a durable
solution to these difficulties.

"With this in mind, we reject the use of any protectionist measures and agree
 to work together with the WTO as in the IMF and the World Bank to improve
 the coherence of international economic policy-making with a view to
 maximising the contribution that an open, rule-based trading system can make
 to fostering stable growth for economies at all levels of
 developments".

New Zealand resisted attempts by countries opposed to trade liberalisation to
scuttle the 1999 negotiations.

Speaking at Geneva, Dr Smith urges ministers to see that afflicted Asian
nations have begun a difficult and critical structural reform process but
"also need the ability to trade their way out of their difficulties.  For
this open markets are needed, but in Europe and the Americas."

"As exports from Asia expand, the United States and Europe will face mounting
 domestic pressure to restrict imports in the face of increasing trade
 deficits and declining surpluses.  Governments will need to be resolute in
 their determination to sustain the momentum of trade
 liberalisation."

Dr Smith said the WTO must concern itself with a range of issues that
traditionally it has not dealt with, and continue to expand its focus on
behind-the-border issues.  Dr Smith is confident that the next round of talks
will lead to agreement in bringing down agricultural barriers.

"Fortunately, we got the outcome we were seeking almost exactly," says Dr
Smith.  "If we had written the Ministerial Declaration in Wellington I doubt
whether we could have produced a better one."

"It spells out that the preparation for the next round of negotiations must
start this September and, importantly, that the General Council will be in
charge of that process, because it's not just restrained to
agriculture."

The final declaration in Geneva provides for a more comprehensive round,
including sectors other than agriculture and services, and will allow for the
tradeoffs that may be necessary for a successful outcome from the future
negotiations.

The process enables the General Council of the WTO to submit recommendations
regarding the WTO's work programme, including further liberalisation
sufficiently broad-based to respond to the range of interests and concerns of
all members.  This will be a preface to decisions at the third session of the
ministerial conference in late 1999.

"We pushed hard for the round to include other matters," says
Smith.  "We sought opportunities to develop the negotiating process into a
broader round.  It now has potential to be a full multi-lateral round,
although that will be based on the substance of the issues brought forward,
not just the process."

"We wanted our next meeting to be in 1999 and not to drag on into 2000 and it
 is a chance for APEC - which New Zealand will chair - to have an impact. We
 hope to have the whole issue of trade liberalisation programme.

 "We want to broaden that into a much more comprehensive look at
 trade-in-food.  If we can get APEC leaders to agree to a major
 liberalisation of trade-in-food just ahead of the WTO meeting next year,
 what a fabulous lead-in to the WTO agricultural negotiations that
 would be."

"It gives APEC a chance to have a more profound impact on the
WTO."

Paradoxically, support for a full multilateral round comes from the European
Union.  "If they have to give up something in agriculture they will want
something in return in other areas."

New Zealand's hopes of widening the process are also being promoted through a
behind-the-scenes ginger group called "Friends of the Round".

(It is likely that New Zealand will advocate a permanent ban on customs on
E-commerce.)

Recent objections by the USA to New Zealand opening up parallel importing
have not prevented the two countries working closely together at the WTO
level.

"The USA is very concerned about innovation and is fearful that parallel
importing would dampen innovation because of lower returns and they fear
piracy could be more difficult to police."

"Our working relationship with the USA is excellent," says Dr Smith, citing
support from the USA for the Cairns Group's trade liberalisation vision for
the 1999 agricultural negotiations.

That commitment came at a meeting between USA Trade Representative Charlene
Barshefsky and USA Agriculture Secretary Dan Glickman with representatives of
the Cairns Group.  Dr Smith also held separate meetings with both in Geneva.

Dr Smith says the Cairns Group is more unified than ever and South Africa
has been an excellent addition; New Zealand has developed a very close
rapport with South Africa's Agriculture Minister Derek Hanekom and Trade
Minister Alec Erwin.

The Cairns Group held satellite discussions with Secretary Glickman in Sydney
 prior to Geneva meetings requested by the USA.  "The conclusion is excellent
 as we agreed to work together on our strategy for the WTO
 round..."

"We've not seen this support before for the Cairns Group objectives."