[asia-apec 486] NZ News Item - APEC & Japan crisis

[Gatt Watchdog]

Japan slow to help NZ trade - Smith

The Press, Christchurch, 22/06/98

Wellington - Japan is dragging its heels over an Asia-Pacific proposal to
fast-track free trade in some sectors despite international pressure to deal
with its economic problems, Trade Minister Lockwood Smith says.

Speaking from Kuching, Malaysia, yesterday Dr Smith said if Japan agreed to
the deal it could send a signal to the rest of the world that Japan was
prepared to undertake economic reforms.

Trade ministers from Asia Pacific Economic Co-operation nations are meeting
in Kuching this week to discuss proposals to fast-track the removal of
tariffs and other trade barriers from nine trade sectors.  The most
significant for New Zealand are fishing and forestry, which are also the most
strongly opposed by Japan.

"(The deal) would be a very small thing in the context of the problems Japan
has to grapple with, but the signal it would send to the world is that Japan
is part of the Apec reform process and is prepared to carry out
reform," Dr Smith said.

If the world did not receive some signal from Japan within the next few weeks,
it was likely the Japanese currency would fall again.  If that happened the
New Zealand dollar would also fall.

The Kuching talks had appeared to be headed for difficulty as a result of the
Asian economic crisis, but Dr Smith said officials meeting before the talks
had prepared the ground for a possible compromise. That would involve
countries being able to opt out of parts of the trade liberalisation package
while still committing to others.

Dr Smith said achieving a deal was "all about pressure" on Japan and final
agreement would probably have to wait for a meeting of Apec leaders in
November. - NZPA