APEC Leaders Set to Endorse Plan to Liberalize Trade

Pacific Rim leaders gathered here today to endorse a sweeping blueprint for liberalizing regional trade.

The “Action Agenda” outlines how the 18 members of the Asia-Pacific Economic Cooperation (APEC) forum intend to move toward the goal of free trade within the region by 2020. Developed nations in the group aim to eliminate their trade barriers a decade earlier, by 2010.

President Clinton, who decided to stay in Washington to deal with the U.S. budget crisis, is being represented at the meeting by Vice President Al Gore, who arrived here Saturday and immediately joined Chinese President Jiang Zemin for what a senior U.S. official described as “a very good meeting” conducted in “a very good atmosphere.”

Heads of state from almost all APEC nations are attending today’s summit at Osaka Castle.

As a kind of “down payment” toward the free-trade goal, members were set to announce initial steps that will be implemented during the coming year.

Japan’s measures will include acceleration of tariff reductions pledged in the 1993 global trade negotiations that set up the World Trade Organization (WTO). Lower rates on 697 items, including textiles, chemicals and steel, originally due to be applied from January, 1998, will instead be enacted in April, 1996.

Imports valued at nearly $10 billion, primarily sourced from APEC members, will be favorably affected by these tariff reductions.

Tokyo also will carry out deregulatory measures such as simpler visa processing for business visitors from the APEC region, customs reforms and simplification of automobile inspection procedures.

China was expected to announce liberalization steps that would be aimed partly at boosting its application to join the WTO. The United States will announce reforms in its government procurement practices.

Ryutaro Hashimoto, Japan’s international trade and industry minister, said in a speech Saturday that the Action Agenda represents a “very Asian approach” by which Pacific Rim nations seek liberalization “on their own without being pressured into it.”

“Of course, it would not do for our emphasis on voluntarism and independent initiative to be a license for irresponsibility,” Hashimoto added. “Thus the Action Agenda, while premised upon independent initiatives, [will] provide for a review process and peer pressure in favor of further progress.”

The agenda, which has already been approved at the ministerial level, “is both a major step forward for concrete APEC action and the first page in a new chapter in Asia-Pacific history,” Japanese Prime Minister Tomiichi Murayama told leaders assembled for an opening dinner Saturday night.

“Working to eliminate bottlenecks to economic development, APEC also has an important responsibility for attaining sustainable growth and equitable development,” Murayama said. “The increased burden that the region’s population growth and rapid economic development will put on the environment and on food and energy resources is a major concern not only for our region but for the entire world.”

Founded in 1989, APEC groups Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, South Korea, Taiwan, Thailand and the United States. The 18 members have a total population of about 2 billion and account for half the world’s economic output.

In the Action Agenda--in effect a road map of how to move toward the free-trade goal--all APEC members have pledged to bring specific plans for trade liberalization to next year’s APEC summit in the Philippines. Items covered range from tariffs and non-tariff barriers to intellectual property rights, customs procedures and deregulation.

The agenda includes intentionally ambiguous language aimed at papering over disputes within the group about how rigorously the free-trade principle should be applied to sensitive sectors, especially agriculture.

The plan endorses the principle of “comprehensiveness,” meaning that the goal of free trade applies to all sectors. But it also allows individual countries “flexibility.”

The document outlines how APEC members will move forward with trade and investment liberalization in the next few years. But it does little to clarify the long-term goal, first outlined at last year’s APEC summit near Jakarta, Indonesia, of achieving free trade in the region by 2020.

A Chinese government spokesman said Saturday that China will announce a “significant” economic liberalization package later today. Measures are expected to include tariff cuts and an easing of restrictions on capital flows.

U.S. Trade Representative Mickey Kantor, in a Saturday meeting with Chinese Foreign Trade Minister Wu Yi, presented what American officials described as a fairly detailed “road map” of suggestions on what Washington believes Beijing must do to qualify for WTO membership.

The 30-page document suggests how China can bring its trade rules into “compliance with international norms,” said one senior Clinton Administration official who spoke on condition of anonymity.

“We came away from the meeting with a very strong indication they intend to use that road map as a basis to inform their decisions,” another U.S. official said.

Beijing has insisted that it has the right to join the WTO as a developing nation, but Washington has argued that China’s economy is too big for it to join on the favorable terms generally granted poorer nations.

China has “taken note of the measures and ideas put forward by the U.S. side,” Chinese Foreign Ministry spokesman Chen Jian said. “These are contributive to China’s accession into the WTO.”

At Gore’s meeting with Jiang, the two leaders discussed China’s bid to join the WTO, and Gore stressed Washington’s desire that China join in a nuclear test ban treaty next year, one official said.

Jiang “indicated they were studying the matter” but “did not make any commitment to it,” he said. China has conducted two nuclear tests this year, drawing especially sharp criticism from Japan.

Gore also told Jiang that Washington wants to resume a formal dialogue on human rights with Beijing as soon as possible, the official said. Jiang’s response was “receptive but not conclusive.”

Chinese spokesman Chen described Jiang’s talks with Gore as “positive, useful and constructive.”

Chiaki Kitada of The Times’ Tokyo Bureau contributed to this report.