[asia-apec 1188] APEC Trade Ministers Meeting - NZ media

[Gatt Watchdog]

New Zealand Herald July 1 1999

Is Apec back on track, or is the trade talkfest merely hot air? Political
editor JOHN ARMSTRONG looks at this week's Trade Ministers' meeting in
Auckland.

[Photos: GRIN DOCTOR: Lockwood Smith's enthusiasm for the Apec ministers'
consensus led him to describe it as "a global breakthough" which has put
Apec "back on track with a full head of steam."

EASY RIDER: Philippines Secretary of Trade and Industry Jose Pardo ride in
a golf cart during the Apec retreat at the Gulf Harbour Country Club.]

Worthy noises conceal delays

"A wonderful mood." "You could not get a more cohesive, friendly bunch of
ministers." "Apec's now back on track with a full head of steam=85"

Beneath the relentless spin from the loquacious Lockwood Smith lurks one
question - has New Zealand's trade minister really restored momentum to
Apec after last year's dummy-spitting in Kuala Lumpur?

The American delegation at this week's trade ministers meeting complimented
the chairman on having a grin "that can light up the darkest of rooms".

But Dr Smith can sometimes let his enthusiasm get the better of him,
leading him into the trap of claiming victory in defeat.

He did that at the last Apec summit in Malaysia, where everyone could see
the Japanese had put the kybosh on faster tariff cuts on fish and forest
products - two of New Zealand's main exports.

That disagreement was shunted off to the Geneva-based World Trade
Organisation, which will start the so-called "millennium round" of trade
talks in Seattle this year.

The dispute placed a big query over Apec's relevance, particularly as the
21-member Pacific Rim bloc appeared to fragment in the face of its first
real crisis, the Asian financial turmoil.

When the going got tough, the problem was packed off to Geneva.  Cynics say
the same thing happened in Auckland this week.

Getting momentum on a list of products known as the "back six" - oilseeds,
food, rubber, fertiliser, civil aircraft and automobiles - was always going
to be tricky after Kuala Lumpur, and plenty of pre-meeting mumblings were
heard from countries reluctant to accelerate tariff cuts.

Once again, the problem was dispatched to the WTO.

Apec trade ministers agreed - and this is being hyped as the week's coup -
to embrace all such "industrials" in the WTO round rather than stick to the
existing agriculture and services agenda.

The ministers also imposed a three-year deadline on a completing the new
round.  Some deadline.  The last negotiating round began in the mid-1980s
and took seven years.  The new one will require more haggling and more
trade-offs.

In short, the trade ministers made worthy noises; the nitty-gritty has been
postponed to another day.

Free trade optimists would argue "so what".  Long term, New Zealand stands
to gain the most from lowering protectionist barriers because it faces
higher average tariffs on its main exports.  Even better the definition of
"industrials" includes fish and forest products.

Getting half the world's economy - Apec's membership - to agree on the
broad scope of the talks should provide the weight to push things through
the WTO labyrinth.  And what happens at the WTO is binding on its 130-plus
members, while Apec's goals are voluntary.

The cynics say all this pre-Seattle positioning would have happened without
Apec, because the WTO is now where the action will be.

And the wording of last night's communique was weak compared to the
pro-liberalisation language New Zealand uses when it speaks for itself.

Long-time Apec watcher Philip Burdon, who gave ministers a hurry up during
a session with business leaders, summed it up: "The jury's out."

But officials will leave Auckland happy their careful pre-meeting diplomacy
produced a more co-operative mood, clearing the air after Kuala Lumpur and
getting the mood right for the far more important leaders' summit, now only
11 weeks away.

Kuala Lumpur did another thing - it shook Apec's complacency.  Ministers
realise they must do a much better job of selling the benefits of trade
liberalisation, especially when recession hits.

Politicians find the mantra of "trade means jobs and trade liberalisation
means extra jobs" doesn't resonate when existing jobs are under threat.

"Perceptions about liberalisation are often distorted because the
substantial benefits of liberalisation are widely dispersed whereas the
adjustment costs are localised and more visible," ministers admitted in
their communique.

The communique amazingly then pleads for the elimination of jargon - the
curse of all complicated trade negotiations - and suggests Apec's
communication efforts should "focus on things directly relevant to people's
experience".

Such language has not been heard before.  The need for plain talking was
stressed by Australia's irrepressible Tim Fischer, who cited the
mouth-watering example of the "Filipino coconut pie."

Deleagtes licked their lips at his description of this taste sensation,
imports of which posed a threat to Australian confectioners.

The point of his story was that the pies were pumped full of export sugar
from Queensland's cane farms.  It was win-win for Australia's consumers and
producers.

But he warned that free-trade advocates struggled to win the trade
liberalisation war when "every radio talk-back jockey from Dallas to
Darwin" is beating a protectionist drum.

Neither does it help when the United States, a supposedly-ardent free trade
advocate, imposes tariffs on other free-traders, to the point of snubbing
an Australian and New Zealand financial offer to expand the tiny north
American lamb market to everyone's advantage.

But are openness and "transparency" really possible in Apec deliberations?
As one observer noted, the conundrum is that national interest during
high-stakes negotiations dictates that countries keep their cards close to
their chest for as long as possible.

Last night's end-of-meeting press conference was evidence of that.  The
effusive Dr Smith, his country having already cut tariffs to the bone, said
a lot

His Apec colleagues, notably the Japanese and Chinese ministers, said very
little.

What they said

"Our job is to consume."

America's Deputy Trade Representative Richard Fisher on how the supposedly
protectionist United States has saved Asian economies from deep recession.

"We need to put a human face on trade."

Richard Fisher on the need for Apec to escape the jargon of trade
negotiations.

"Perceptions about liberalisation are often distorted because the
substantial benefits of liberalisation are widely dispersed."

Trade ministers admit in their communique that selling tariff cuts is not
easy.

"Rethink the role and involvement of the media in Apec meetings."

A business leaders communique deplores Apec's closed-door delibeations.

"Tariffs equal taxes."

Australia's Tim Fisher puts the trade liberalisation message in simple=
 terms.