APEC Likely to Set Aside Liberalization of Farm Trade : Asia: Member countries are expected to agree to an ‘action plan.’ U.S. reiterates opposition to ‘sensitive sectors’ exemption.

Pacific Rim leaders gathering in Osaka, Japan, later this week are likely to set aside a contentious argument over liberalization of farm trade while agreeing to an “Action Plan” toward the long-term goal of regional free trade.

At a summit last year of the 18-member Asia-Pacific Economic Cooperation (APEC) forum in Bogor, Indonesia, the region’s leaders agreed that industrialized economies would drop all trade barriers by the year 2010 and other members would do so by 2020. Nothing was decided, however, about how to reach that goal or even what it really means.

As documents have been prepared for the Osaka meeting, which culminates with a leaders summit on Sunday, disputes have focused on whether “sensitive sectors”--primarily agriculture--should be excluded from the free-trade goal.

Japan, South Korea, China and Taiwan have argued that the summit should offer some recognition that farm trade requires special treatment, while the United States, Canada and Australia have vigorously countered that free trade means free trade: no exceptions.

Specific wording remains to be decided, but signs of compromise have emerged in recent days. There now seems little doubt that language will essentially paper over the issue for another year. A ministerial-level meeting Thursday and Friday is aimed at finalizing wording on this and other issues for endorsement at Sunday’s leaders summit.

Expectations thus focus not on truly resolving the politically thorny agricultural products issue, but rather on producing a blueprint for how APEC members should take relatively easy early steps in greater trade and investment liberalization. Moves toward closer economic and technical cooperation in areas ranging from visa requirements to customs inspections also will be mapped out.

“The main task for this APEC Osaka meeting has always been described as implementation of the Bogor Declaration,” said Hiromoto Seki, Japan’s APEC ambassador. “Asia and Pacific cooperation has been thought of as a dream, as an idea and also as a goal for a number of years. This year, on the other hand, is a year for action.”

The “Action Plan” to be endorsed in Osaka will address issues of tariffs, non-tariff barriers, trade in services, investment rules, industrial standards, customs procedures, intellectual property rights, competition policy, deregulation, government procurement and dispute mediation, according to Japanese officials.

The blueprint calls for APEC members to draw up unilateral measures toward improvements in these areas, then bring those plans to next year’s regional summit in the Philippines and start implementing them in January of 1997. While the steps to be taken are basically voluntary, they are also expected to show “comparability”--which essentially means that any country trying to get a free ride will face criticism from other members.

To demonstrate their commitment to this process, APEC leaders have already agreed to bring to the Osaka summit specific promises on steps to further deregulate their economies or promote trade liberalization. For some members, according to Japanese and American officials, these so-called “down payments” will include acceleration or broadening of steps already agreed to in the 1993 negotiations that established the World Trade Organization.

U.S. Trade Representative Mickey Kantor reiterated Friday the American position that there should be no sectorial exemptions from APEC’s free-trade goal.

“We have taken the strong position, and will not relent, that if each of us starts taking off the table those sectors which are critical to us politically, we’ll never move forward,” he said.

The Clinton Administration also won’t agree to making exceptions for specific crops such as rice.

“That would be a huge mistake on our part,” he said.

Nevertheless, Kantor expressed confidence the Osaka meeting will produce a trade liberalization plan covering such areas as intellectual property rights and tariffs. What is still needed, he said, is some “delicate and clever work” on the language of the final documents.

Founded in 1989, APEC groups Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, Taiwan, Thailand and the United States.

Times Staff Writer Evelyn Iritani contributed to this report.