[asia-apec 621] US & APEC

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   U.S. Official Says Apec Initiative Must Proceed
   Friday, 4 September 1998, 12:44 pm
   Press Release:

      U.S. Official Says Apec Nine-Sector Initiative Must Proceed

      Washington, DC, Sept 3, 1998 /Capitol NewsWire - Washington,
      DC Bureau - Business Correspondent

      Despite widespread economic and financial turmoil, a U.S.
      trade official says the Asia-Pacific Economic Cooperation
      (APEC) forum must go ahead with its initiative to reduce
      trade barriers in nine sectors.

      The official, who asked not to be identified, made the
      comment in a September 2 interview a few days before a
      series of APEC meetings in Kuantan, Malaysia, September
      9-15.

      The official said he has had some anxious moments as the
      situation in Asia worsened. Just a day earlier the
      government of host country Malaysia imposed sweeping
      currency controls, immediately halting trading in the
      country's currency, the ringgit.

      "It just happened so I haven't had time to reflect on that
      one very much," the official said.

      The official emphasized the long-term nature of the APEC
      initiative to eliminate tariffs over three to five years. In
      subsequent years the initiative would eliminate non-tariff
      barriers, facilitate trade in other ways such as through
      better cooperation on customs and promote sharing of
      economic and technical expertise.

      Even so, the official said he suspects the Kuantan meeting
      could get contentious because of the current turmoil.

      "There's going to be a lot of anxiety; there's going to be a
      lot of resistance in some quarters to doing anything more,"
      the official said.

      "But at the same time, I think there's a recognition that
      APEC and the countries of the region have to show they're on
      a steady course, that they're not backtracking on their
      commitments on liberalization," he said.

      Trade ministers from most of the APEC economies -- Mexico
      and Chile are not participating -- agreed at a June meeting
      on a basic framework for eliminating tariffs in six of the
      nine sectors: forest products, fish and fish products, toys,
      medical equipment, environmental products and energy.

      In another sector, gems and jewelry, the agreed goal will be
      either tariff elimination or reduction to 5 percent. In
      another sector, chemicals, the goal is for harmonization of
      tariff rates. In the last sector, telecommunications, the
      goal is a mutual recognition agreement on product standards.

      Pressure is on to finish a negotiated package for the nine
      sectors before the annual meetings of APEC leaders and
      ministers, which are scheduled this November in Kuala
      Lumpur.

      With the basic decisions made on the size and timetable for
      tariff cuts and on the scope of product coverage, trade
      officials will use the Kuantan meetings to attempt to work
      out special treatment for politically sensitive products.

      The U.S. trade official said the United States is requesting
      special treatment for only a few sensitive products in the
      fish, energy and environment sectors. He complained about
      the number of requests made by other APEC members.

      "The requests for product reservations can't sink the whole
      thing," he said. "Unless these are pared down we won't have
      a credible package .... The main task at Kuantan is to try
      to pare that down."

      He said the United States prefers that any special treatment
      for sensitive products come in the form of a "reasonable"
      deadline extension for full elimination of tariffs.

      "Some countries have requested excluding products or not
      reducing tariffs to zero but to some other level," the
      official said. "We're not very keen on those."

      He said Japan's continued reluctance to accept tariff
      elimination for fish and forest products threatens the
      success of the entire nine-sector initiative. Japan's new
      government has so far indicated no change of its position,
      the official said.

      "Certain other countries feel that, if there is not a
      meaningful fish and forest products initiative, then there's
      not that much in it for them," he said. "That, for example,
      is the position that Indonesia has taken.

      "Our view is, in order for this to succeed, Japan is going
      to have to modify its position," the official said.

      World trade in the nine sectors amounts to $1,500,000
      million annually. If APEC leaders can endorse a package for
      reducing trade barriers in those sectors at their November
      meeting, then APEC members would seek to get broader
      agreement on it from the European Union (EU) and Latin
      American countries, probably in the World Trade Organization
      (WTO).

      Such a sequence would follow the pattern of the Information
      Technology Agreement, which was endorsed by APEC leaders in
      November 1996 and approved by WTO members the following
      month.

      Ends

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