[asia-apec 1669] APEC "balancing act" - NZ Herald, 17/11/00

[APEC Monitoring Group]

New Zealand Herald, 17/11/00
Clark performs balancing act over free trade 

17.11.2000 By JOHN ARMSTRONG 
The royal-blue silk blazers and shirts with gold-thread motif that Helen Clark and other Apec leaders wore for yesterday's end-of-summit "family photo" suited the New Zealand Prime Minister just fine - stylish, yet functional. 

And more low-key than some of the gaudy national costumes of past years. 

She might even wear her blazer again. 

This no-fuss Prime Minister has little time for the rituals of diplomatic hobnobbing - and Asian formalities still accounted for an awful lot of time-wasting during Apec's two-day meeting. 

She went to Brunei to work, conscious of the domestic backlash that can hit New Zealand politicians who get too carried away with their self-importance as they briefly strut the world stage alongside the Clintons and the Putins, while being indulged by an astronomically wealthy host. 

Above all, though, she knows Apec's free trade theme-tune poses special risks for a Labour Party leader - particularly one who criticised Apec's liberalisation thrust in Opposition. 

Throughout her first Apec, she sought to strike a careful balance. 

To her right sits a powerful New Zealand farm-business lobby relentlessly pushing the Government to fight on the international stage for export trade barriers to be removed. This is personified in her blunt talking Trade Minister, Jim Sutton. 

On her other flank sit the Alliance and the Greens, who are competing for the increasingly vogue anti-globalisation vote. 

In pragmatic fashion, the Prime Minister embraces free trade, yet wants to be seen to be helping impoverished countries receiving little benefit from it. 

To the first end, she spent a good deal of her time in Brunei quietly cajoling other countries to join sub-regional free trade pacts like the one signed on Tuesday by New Zealand and the island state of Singapore. 

The blunt truth is that Apec's goal of rich countries agreeing to dismantle trade barriers by consensus by 2010 looks dead in the water following the Asian recession of the late 1990s. 

Having opened its borders already (some say prematurely), New Zealand cannot go back to protectionism. 

The second-best option is to forge bilateral agreements that can then be stitched together into free trade areas in the hope that reluctant economies ultimately join for fear of being left out. 

The danger is that big countries forge such deals to give the appearance of being free traders, while actually protecting key domestic industries. 

It is all very well for Japan (which protects its farmers) and Singapore (which has no farms) to be negotiating a free trade arrangement. 

But that will be counter-productive to New Zealand if it excludes agricultural products because it would undercut efforts to gain better access through over-arching World Trade Organisation negotiations. 

Already wooing Chile and Hong Kong, Helen Clark's other problem is that the Alliance is likely to kick up rough about her unbridled enthusiasm for more Singapore-style deals. 

To blunt such criticism, she yesterday cleverly announced that New Zealand would allow goods from the planet's 48 poorest countries to enter duty-free. 

It is a cost-free move in that such imports are unlikely to pose much threat to local industries and one of particular political piquancy as the Greens' Rod Donald once managed the chain of Trade Aid shops. 

She was also sending a message to other Apec leaders that the benefits of globalisation must be spread more equitably and that trade negotiations are not just for enriching multinational companies. 

As a social democrat, she believes that Apec's agenda must be "rebalanced" to acknowledge disparities of wealth - thinking that was reflected in the Apec leaders' final communiqué yesterday. 

Such sentiments will not silence opponents of free trade at home who spy a Prime Minister speaking with a fork tongue. 

But it will stifle those critics' attempts to portray Helen Clark as being a cheerleader for globalisation. 

The annual summit last night wound up with a call for a new round of stalled global trade talks to get underway as early as next year. 

The wording of the communiqué by the leaders appeared to be a trade-off between countries like Malaysia and Indonesia. 

They had wanted to delay negotiating at the World Trade Organisation, while Australia and New Zealand had pressed for a commitment to 2001. 

The communiqué's call for a "balanced and sufficiently broad-based agenda that responds to the interests and concerns of all WTO members" will partly molify economies like Malaysia, which were buffeted by the Asian recession and are reluctant to open their markets any further to foreign goods. 

Helen Clark said the wording of the leaders' communique was pleasing. 

"A date for launch in 2001 is quite satisfactory. The issue now will be to see it achieved. 

"Obviously there is still a lot of forces against a successful round."