[asia-apec 1172] NZ: National Business Review on APEC

[Gatt Watchdog]

National Business Review, July 2 1999

Business leaders cane Apec: too slow to cut too high tariffs
By David Barber

Regional business leaders this week made it clear Apec was not moving =
fast enough for them in cutting=20
tariffs and removing other trade barriers.

They said they were disappointed with progress and abdicating Apec=92s =
tariff-cutting leadership role by=20
passing responsibility to the World Trade Organisation was costing =
regional economies and consumers.

Some Apec tariffs were still too high and WTO processes too slow, =
business leaders told the ministers after=20
they passed on six more trade sectors they had earlier targeted for =
early unilateral liberalisation to the world=20
body.

Tariffs needed to be cut faster and Apec=92s target of 2003-2005 for =
trade facilitation measures was too far=20
out, Comalco chief executive Kerry McDonald said.

Although International Trade Minister Lockwood Smith claimed Apec was =
back on track =93with a full head=20
of steam=94 after last year=92s near collapse in Kuala Lumpur, the =
business community made it clear it was far=20
from convinced.=20

=93There=92s a genuine ambition to continue trade liberalisation but the =
jury is still out on whether it can=20
deliver,=94 said Philip Burdon, former trade minister and chairman of =
Apec=92s Business Advisory Group.

He said the 21-member organisation, which accounts for nearly half of =
all world trade, faced an enormous=20
challenge in meeting its declared targets of free trade by developed =
countries in 2010 and for the=20
developing 10 years later.

=93I am apprehensive to the extent that I will believe it when I see =
it.=94

Developing country members reluctantly agreed to support a comprehensive =
new WTO round although=20
they remain suspicious Apec=92s free trade agenda gives most of the =
benefits to their more developed=20
colleagues.

They backed the inclusion of industrial goods =96 essentially everything =
but farm products and services,=20
where new negotiations were already guaranteed =96 because they =
recognised Apec could not face the=20
European Union across the table looking anything but totally united and =
committed.

=93It=92s just not acceptable for anyone to say they are opposed to =
trade liberalisation,=94 said one delegate.

But the developing members demanded assurances they would make =
substantial gains from the free trade=20
drive.  They particularly want guarantees wealthier nations will =
contribute more to their infrastructure=20
development and help lift their capacities in the new technological age.

Mexico warned that most trade growth in the next 20 years would come =
from developing countries and said=20
the new round=92s success depended on them being brought fully into the =
international trading system.

Editorial

Believers give way to sceptics

The Apec trade ministers who met in Auckland this week can be forgiven =
for thinking they were akin to the=20
early Christians.  All believe in the Messiah=92s coming but find =
sceptics all around.  Their John the Baptist=20
role was to set the scene for the Apec leaders=92 summit in September =
and give a hefty jump-start to the next=20
world trade round in Seattle at the end of the year.

But they were upstaged by other events over-shadowing their mission: the =
US decision  to impose barriers=20
against lamb imports and the failure of the World Trade Organisation to =
agree on a leader.

That the trade ministers still managed to cling to their mantra in their =
final declaration is commendable. =20
But outsiders and businesspeople are right to be cynical of any =
immediate outcome.  Like the prophets of=20
earlier times, the free trade believers know their long established =
principles =96 that open markets lead to=20
greater prosperity to all =96 is honoured more in words than deeds.

The US decision against lamb imports, as explained by Professor =
Richardson on the opposite page, is a=20
classic case of the political process delivering specific goods to a =
defined group of voters at minimal=20
expense to the majority. President Clinton has wisely held off his final =
decision until the trade summit is=20
over.

But New Zealand=92s trade minister, Lockwood Smith, expects an =
unfavourable outcome.  It is just the kind=20
of decision that fuels the scepticism of unbelievers.

One of the prophets at this week=92s gathering, Professor Jagdish =
Bhagwati, urged the ministers not to accept=20
compromise in proseltysing the faith and to come up with more creative =
proposals to overcome the=20
sceptics.  His advice is worth taking but there was little evidence of =
it.

The biggest blow was the decision of Australia=92s admirable advocate, =
Tim Fischer, to retire from his=20
leadership role for personal reasons.

Dr Smith and Mike Moore still have an unenviable burden to carry in an =
increasingly hostile world.

Letters to the Editor:  editor at nbr.co.nz