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Patricia Made


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TRADE-APEC: New Tendency Towards Bilateral, Regional Trade Deals

By Gustavo González

SANTIAGO, Nov 9 (IPS) - The coming Asia-Pacific Economic Cooperation forum (APEC) summit will take place Nov 15-16 in Brunei in a climate favourable to bilateral and regional trade agreements, which mark a new tendency for the world's single largest economic grouping.
The shift was the result of the stagnation of multilateral negotiations in the wake of the fiasco of the December 1999 World Trade Organisation (WTO) ministerial meeting in the U.S. city of Seattle, Washington, according to Ricardo Lagos Weber, head of the Chilean Foreign Ministry's Department of Trade Policy.

APEC, which accounts for 60 percent of global production and 50 percent of trade, is currently made up of 21 economies from the Americas, Asia and Oceania, including Hong Kong, a province of China -- a country that in its turn claims Taiwan, another of the members, as a renegade province.

Hong Kong, while still a British protectorate, and Taiwan were two of the 12 founding members of APEC in 1989. China and Russia, on the other hand, joined the grouping later.

The current members are: Canada, Chile, Mexico, Peru and the United States, in the Americas; China, Hong Kong, Japan, South Korea and Taiwan in east Asia; Brunei, the Philippines, Indonesia, Malaysia, Singapore, Thailand and Vietnam in southeast Asia; Australia, New Zealand and Papua New Guinea in Oceania; and Russia.

The latest admissions to APEC were Russia, Peru and Vietnam, in 1997, when the leaders agreed on a 10-year moratorium on new memberships. That decision left three Latin American countries -- Colombia, Costa Rica and Ecuador -- on the waiting list.

Lagos Weber, the son of President Ricardo Lagos, said the Chilean government would like the moratorium to be shortened, in order for more Latin American economies to forge links with the Pacific rim.

The two main themes of the gathering in Brunei will be the social impact of globalisation and the ''new economy'', and the relationship between the WTO and bilateral or regional trade accords.

President Lagos will be one of the keynote speakers on the first theme, and Mexican President Ernesto Zedillo on the second. The presence of the the third Latin American APEC leader, President Alberto Fujimori, has not yet been confirmed, due to the political crisis shaking his country.

APEC is not only the broadest, but also the least consolidated of the world's trade blocs, when compared to other large groupings like the 15-member European Union, the North American Free Trade Agreement (NAFTA - Canada, Mexico and the United States) and the Southern Common Market (Mercosur - Argentina, Brazil, Paraguay and Uruguay).

In the mid-1990s, the Asia-Pacific forum decided to gradually move towards a transformation into a giant free trade agreement. But commerce between members will only begun to be liberalised between 2010 and 2020.

The forum's first decade of existence was marked by pressure from the members in the Americas and Oceania to make faster progress towards agreements on the liberalisation of trade, and by resistance put up by the Asian members, especially Japan.

The protectionism and relative commercial isolation of Japan and the Asian tigers were called into question by the financial crisis that broke out in Thailand in 1997 and spread throughout southeast Asia, before extending to Japan, Russia and Brazil.

According to Lagos Weber, Chile's highest representative before APEC, there has been a ''hemorrhage of commercial activity'' in the eastern area of APEC since September 1999 through bilateral accords, fuelled by the WTO's failure to launch the new ''millenium round'' of trade talks.

The Seattle fiasco led Asian members of APEC like Japan and South Korea, which wanted trade liberalisation within the forum to be strictly governed by the standards and norms agreed by the WTO, to rethink their opposition and turn to regional and bilateral accords.

Lagos Weber pointed to agreements reached by Japan and Singapore, and by Singapore and New Zealand, as well as the advanced stage of negotiations on trade deals between Asian members of APEC and members from other regions.

APEC representatives from Singapore, New Zealand and Chile met in Santiago on Nov 2 to exchange information on the agreement negotiated between Singapore and New Zealand, to be formalised in Brunei.

The trade pact between those two countries was proposed at the last APEC summit, held in Auckland last year, where it was underlined that all commercial accords reached within the forum must be compatible with and adaptable to the ''over-arching'' agreement being negotiated by the 140 members of the WTO.

Negotiations for a trade deal between South Korea and Chile are in the advanced stage, and this Southern Cone nation also has its eyes on a treaty with Japan.

But while the outlook is promising, Lagos Weber cautioned that things could shift in Brunei, due to the heterogeneous make-up of APEC with respect to the levels of development of its members, and the debate on including labour and environmental questions in trade agreements.

The bloc's industrialised members are pushing for the inclusion of such issues, while developing nations argue that they distort the commercial nature of trade agreements and can give rise to unfair situations in terms of the definition of norms and standards, dispute-settlement bodies and possible sanctions for incompliance.

One of the main causes of the WTO fiasco in Seattle, said Lagos Weber, was U.S. President Bill Clinton's insistence on addressing environmental and labour standards within the ''millenium round'' of talks. (END/IPS/tra-so/ggr/ff/sw/00)



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