An Ocean Apart : Pacific Rim Trade Summit Addresses Gulf Between Rich, Poor

By DAVID HOLLEY

Nov. 21, 1996 12 AM PT

TIMES STAFF WRITER

TOKYO —

When Pacific Rim leaders meet in the Philippines today through Monday for a regional summit that will include President Clinton, tensions between rich and poor over how best to promote economic growth are likely to be more visible than ever before at the annual event.

The 18 members of the Asia-Pacific Economic Cooperation forum account for half the world’s economic output and 46% of global merchandise trade, so they can collectively carry great weight in setting world trade rules.

But several of the poorer countries represented in the group are openly complaining that the more developed members, led by the United States, are imposing too much of a free-trade ethos on the organization and neglecting other equally important goals.

“We do not want to see APEC turn into a pond where big fish eat the small fish,” Thailand’s foreign minister, Amnuay Viravan, said at a recent Bangkok news conference. “If it’s not to help poorer economies, then it is a form of neocolonialism.”

Still, pledges by each of the APEC members on steps toward greater liberalization of trade and investment will be endorsed at ministerial-level meetings in Manila on Friday and Saturday, then at a Subic Bay summit of top leaders including President Clinton on Monday. The gathering begins with a banquet and informal meeting for ministers tonight.

The final statements issued by the summit are likely to trumpet the group’s support for a proposed World Trade Organization information-technology agreement aimed at eliminating tariffs by 2000 on a range of high-technology goods such as computer hardware and software, semiconductors and telecommunications equipment. APEC’s support for this idea would be forwarded to an organization ministerial conference to be held in Singapore next month.

But an important subplot will be the debate over just what the organization is doing to help its developing nations.

Kobsak Chutikul, director general of the economic department of Thailand’s foreign ministry, told reporters that the Thai people “see the APEC forum as only beneficial to industrialized countries. Our domestic industries have a limited chance to grow.”

At a 1994 APEC summit in Bogor, Indonesia, the region’s leaders agreed that industrialized members would drop all trade barriers by 2010 and others would do so by 2020, but no details or definitions were given as to what that really meant.

Since then, the focus within APEC by the United States, Australia and other countries with open economies has been heavily weighted toward keeping up momentum for this free-trade vision. But something of a backlash appears to be developing against this pressure.

The host for this year’s meetings, Philippine President Fidel Ramos, has stressed his country’s commitment to expanding free trade, but has also emphasized another aspect of APEC’s self-described mission: “economic and technical cooperation.”

This concept, ill-defined within APEC but to some degree involving aid from richer countries to poorer ones, has drawn more enthusiastic support from developing countries than from the U.S.

Some observers interested primarily in the group’s free-trade agenda have expressed concern that any shift of emphasis toward formal cooperative programs could undercut the push to dismantle trade barriers. And this year, even Japan--whose definition of free trade in 2010 may not be as liberal as that sought by the U.S.--is expressing quiet support for such a shift.

“This year, people are especially trying to refocus on economic and technical cooperation,” a Japanese foreign ministry official said on condition he not be further identified. “This is against the background that [for the past two years] liberalization and facilitation of trade was given a relatively larger focus.”

The countries that have been most vocal about support for a more formal “cooperation” agenda, such as Thailand and Malaysia, have also tended to express the greatest reservations about the strong push for free trade.

But U.S. officials insist they are basically satisfied with the “individual action plans” already submitted to summit organizers by each APEC member, in which they declare what steps toward the free-trade goal they are willing to commit to now.

These plans are still officially secret, pending announcement in Manila, but some details have begun to leak.

Among Japan’s promises, for example, is expected to be the simplification of customs rules for agricultural imports, which could ultimately help more American fruit reach Japanese store shelves.

Japanese media have reported that one of China’s promises will be to allow foreign securities firms to establish branches to do local business by 2000, that Singapore will promise to drop import taxes on 85% of all items to 6.5% or less by the same time, while South Korea will pledge to ease regulations on foreign investment in the telecommunications industry.

The basic concept behind the APEC process, which does not involve negotiation of formal trade deals, is that each year, every member will make additional promises, taking it closer to the free-trade goal--and that members will be free to criticize those who refuse to take steps comparable to others. Since the process will still take 15 years for the richer members and 25 years for the rest, nothing too dramatic is likely in any single year.

The members of APEC are: 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.

* TROUBLING REPORT

U.S. trade deficit with China again climbs. D3

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Trading Tensions

Tensions between rich and poor members of the Asia-Pacific Economic Cooperation are growing as the group--formed in Canberra, Australia, in 1989--debates how best to enhance trade and further economic development. A look at the gross national product per capita for APEC members in 1994, ranked from richest to poorest:

Japan: $34,630

United States: 25,860

Singapore: 23,360

Hong Kong: 21,650

Canada: 19,570

Australia: 17,980

Brunei: 14,240

New Zealand: 13,190

Taiwan: 11,604

South Korea: 8,220

Mexico: 4,010

Chile: 3,560