[asia-apec 1536] Fw: Singapore-NZ trade agreement _ When small is better

[APEC Monitoring Group]

>Straits Times 30/8/00
>
>Editorial
>
>When small is better
>
>THE trade agreement which Singapore and New
>Zealand initialled will not bring down tariffs much
>lower than they are on either side. That was not
>the purpose, as both are undistorted economies
>whose small home markets have made a necessity
>of integration with neighbours and countries farther
>afield. This new development was, from a certain
>perspective, an indictment of Apec and Asean, and
>a lamentation of what could turn out to be a case of
>the World Trade Organisation's unfulfilled promise.
>Or, in tradespeak, bilateralism and regionalism
>working better where multilateralism is either
>plodding or is being thwarted by the conflicting
>aims of signatory nations. An economy as
>vulnerable to external influences as Singapore's is,
>could hardly do nothing and wait for the big
>mercantilists -- the United States, Japan, France --
>to find a way of countering domestic opponents to
>freer trade. Mind you, that is tearing down the
>ramparts piece by piece -- organised labour,
>environmentalists, farmers fattened on subsidies,
>cultural custodians, stick-in-the-mud legislators,
>anti-child labour humbugs.
>
>No wonder Seattle 1999 was so successful as an
>anarchists' jamboree. The WTO has been in
>suspended animation since the riots in the
>American city last November buried a crucial
>attempt to start a new round of international trade
>opening made urgent by the
>information-communication revolution. Apec, the
>Asia-Pacific grouping, is still more of a statement of
>intent than coming anywhere to fruition in tearing
>down tariff walls. Here, diversity is no strength.
>When its most enthusiastic promoter, US President
>Bill Clinton (or his stand-in), attends his last Apec
>summit in Brunei in November, collective interest
>could possibly begin to wane if progress remains
>slow. As for Asean, the concept of a free-trade
>area is being embraced more in the paying of lip
>service than a willingness to put in the gut and
>sinew.
>
>In the circumstances, Singapore's diversion to
>going bilateral is just being sensible. While it
>continues to support the multilateral framework --
>this remains the world's best bet if the Tower of
>Babel can be called to order -- direct pacts can
>stimulate the process. As a last resort, they can be
>a substitute. The hope must be that it never
>reaches the latter stage. Besides New Zealand,
>Singapore is in talks with Canada and Mexico for
>similar agreements. With Japan, a decision is
>pending whether to start negotiations. Japan itself,
>which never favours bilateral agreements, is
>considering the feasibility of deals with Chile and
>South Korea. The reversal of policy by the world's
>second-largest economy says plenty about the state
>of international trade.
>
>Singapore's wide geographic spread in direct deals
>thus far pretty much sums up its game plan. Draw
>them together, and they form a whole. But it is
>tough going one-on-one. Even with New Zealand,
>nothing can be presumed. The Labour coalition's
>junior partners, the Alliance and the Greens, are
>suspicious about what the open sesame can do to
>the country's weakening social consensus. It is
>another sign that globalisation is getting to be a
>hard sell after the Seattle debacle. Logically, the
>next step is for the Asean free-trade area
>mechanism and Australia-New Zealand, which have
>their own direct agreement and investment links
>with Chile, to stitch together a southern hemisphere
>regional market. Asean-Australasia combined bring
>together 570 million people. It is a tantalising
>thought -- if WTO-like contrariness can be
>overcome.
>
>