[asia-apec 1193] NZ Trade Development Board on APEC

[Gatt Watchdog]

Export News (Newpaper published for NZ Trade Development Board
[Tradenz])

12 July 1999

APEC pushes industrial products into WTO Round
by Warren Head

Industrial products will be added to the forthcoming round of
trade negotiations by member states of the World Trade
Organisation, if APEC trade ministers are heard.

Trade ministers meeting in Auckland agreed upon a set of
"practical initiatives that collectively reinvigorate the APEC
process", says New Zealand Trade Minister Lockwood Smith.

An agreement to push for inclusion of industrial products in the
WTO round of global trade liberalisation negotiations to
liberalise trade in agriculture and services, is the most
important outcome from the APEC trade ministers' meeting held at
Auckland's Aotea Centre.

Officials are to report in September on other issues which could
be included in the WTO negotiations.

Pressure for these negotiations to be concluded within three years
confirms the increasing urgency with the APEC economies for
further trade reform after the economic crisis within the region
over the past three years.

Every APEC member agrees that the best way to repair the damage of
the crisis and to insure against any future crisis is to make
solid progress towards APEC's trade liberalisation and
facilitation goals and actively promote the development of robust,
transparent, markets.

Representatives came from the 21 Asia-Pacific economies with 368
delegates in attendance including the deputy secretary-general of
ASEAN Dr Setboonsarng Suthad, the chair of the Pacific Economic
Cooperation Council Roberto Romulo, and the South Pacific Forum,
represented by Willie Jimmy, deputy prime minister of Vanuatu.

The United States was represented by US deputy trade
representatives Richard Fisher and Sue Esserman, in the absence of
trade representative Charlene Barshefsky, who withdrew because of
a family emergency.

Ministers agreed that the region was recovering from the economic
crisis and APEC's commitment to maintenance of open markets and
individual reforms in the face of the crisis has played a
significant role in moderating its impact and in hastening
recovery.

They emphasised that open, transparent and well governed markets
are the key to a return to sustainable economic growth in the
region and prosperity.

Actions taken by economies are the principal means of achieving
APEC's goal of free and open trade and investment by 2010/2020.

Preliminary Individual Action Plans show 14 states have reduced
tariffs, 14 have liberalised their investment regimes and 17
notified measures in the areas of competition policy and
deregulation.

Nonetheless, ministers agreed to further improve the credibility
of their IAPs which need to be more comprehensive, transparent and
more user-friendly.  Improved IAPs are due back before an August
deadline.

There has been progress on Collective Action Plans in the areas of
customs procedures, mutual recognition of standards and conformity
assessment procedures, mobility of business persons, government
procurement and professional services.  These areas can be
crucial to trade flows by lowering transaction costs.

Ministers noted the growing support for new WTO negotiations on
industrial tariffs and agreed the WTO atmosphere is now positive
for the negotiation of the tariff elements of the remaining six
Early Voluntary Sectoral Liberalisation sectors: automotive (no
tariff element), civil aircraft, fertilisers, food, oilseeds and
rubber.

They will study the impact of non tariff barriers in the forest
products industry; study whether fishing subsidies comply with WTO
rules; seek ways to develop the auto sector; hold a seminar on ISO
safety standards for the toy sector; implement training programmes
for jewellery testing, assaying and hallmarking; study
environmental goods and services for export opportunities; and
start a training programme for designers of toys and novelties.

They will urge the WTO to take into account APEC work to
liberalise trade in six other sectors.

The results from the trade ministers meeting may test the
perception held by the public and the private sector that APEC
meetings make pace but slowly.  Moves to keep the new WTO round to
three years rather than the seven years of the Uruguay Round are
winning support from the business sector which wants increased
certainty and improved clarity on trade rules.

Dr Smith earned strong praise from Devon McLean, chair of the NZ
Forest Industries Council, for securing APEC support for the
inclusion of the industrial sector, including forest products, in
the next WTO round.

"Since 1996 our industry has supported the government's efforts -
led by Dr Lockwood Smith - to negotiate improved access via APEC
and, more importantly, secure globally significant and binding
tariff reductions for forest products within the WTO."

New Zealand's annual wood harvest will double to 35 million m3 by
2015.  McLean notes the importance, within that timeframe, of
improving the ability of New Zealand forest product manufacturers
to compete in expanding markets in APEC economies like China and
Indonesia, as well as non-APEC economies like India or the EU.

Higher value products such as gluelam construction beams,
furniture components and high value packaging material are likely
to be the most important driver of further investment in
processing in New Zealand.

"Capturing more value in New Zealand through further forest
products processing will deliver our industry, those regions
within which it operates and the economy significant benefit in
terms of job and wealth creation," says McLean.

Progress was also made on the APEC food system proposal launched
last year by the APEC Business Advisory Council (ABAC).

ABAC brought its priorities for trade reform to an APEC trade
roundtable of company leaders and trade ministers chaired by
Comalco New Zealand chief executive Kerry McDonald.  The
roundtable, at Auckland's Carlton Hotel, was held as part of an
APEC trade ministers' meeting for the first time.

It followed earlier discussion by ABAC, chaired by former New
Zealand trade minister Philip Burdon, who has expressed his
concerns for a faster reform process.

Burdon says ABAC had a very successful meeting in Tokyo in May and
has "some substantial and credible recommendations" for APEC
leaders this year, including a strong message it wants to see the
pace of trade and investment liberalisation sped up in the region.

"These recommendations will be helpful to New Zealand in that they
will put pressure on the official process to move forward with its
work programme," he told Trade NZ's APEC Business Symposium.

ABAC urged ministers to take work forward in five main areas:
continued trade and investment liberalisation, strengthening IAPs,
the APEC Food System, capacity-building, Y2K and aviation
liberalisation.

APEC transport ministers will be urged to implement four priority
recommendations for air services liberalisation that have been
developed by the transportation working group in the areas of
doing business, airfreight, multiple airline designation and
airlines co-operation.

The trade ministers' meeting also received recommendations for a
strong reform agenda by APEC governments from an APEC Business
Symposium organised by Trade NZ and chaired by chief executive
Fran Wilde.  The symposium identified the importance of
macroeconomic adjustment, structural reform and transparent
regulatory regimes.

An awareness of global business trends and "the inevitability of
globalisation, driven by the world's consumers, was the
overarching theme," says Wilde.

Ministers agreed that women in APEC are "an enormous untapped
potential for improving economic and social wellbeing" and took
recommendations from the Women Leaders' Meeting 21-23 June and
Indigenous Women in Business seminary 18-20 June.