APEC Nations Endorse Cuts in Tariffs by 2000

Eighteen Pacific Rim governments Monday endorsed sweeping tariff reductions by 2000 in the $1-trillion information technology industry and agreed to push forward with voluntary efforts to liberalize trade and investment opportunities in the region.

The commitment on tariff reductions came only after some carefully targeted personal lobbying by President Clinton here at the fourth summit of the Asia-Pacific Economic Cooperation forum, known as APEC. The forum’s foreign ministers agreed to a similar measure Saturday but stopped short of committing their governments to the crucial 2000 deadline.

The endorsement of tariff cuts, made by the leaders of Pacific Rim governments whose economies account for about four-fifths of the industry’s global trade, calls for the elimination of duties on such products as computers and telecommunications equipment. The industry is one of America’s strongest export sectors--one that supports hundreds of thousands of jobs in California and nearly 2 million nationwide.

The United States, which pushed hard for Monday’s result, hopes to use the commitment to win an even bigger prize in three weeks: adoption of an Information Technology Agreement containing similar language by representatives of the 124-member World Trade Organization scheduled to meet next month in Singapore.

The summit’s declaration called on WTO representatives to aim to “substantially eliminate tariffs by the year 2000.” But it “recognized the need for flexibility.”

Formal agreement in Singapore would start the elimination of these tariffs globally, an action that the U.S. Trade Representative’s Office estimated would give U.S. producers an extra $1 billion annually either to absorb as profit or pass on to consumers in the form of lower prices.

“APEC’s endorsement of this Information Technology Agreement is a big deal,” Clinton said in a brief meeting with the U.S. Embassy staff here after the summit. “These products are to the 21st century what highways and railroads were to the 19th century. They are at the core of America’s competitiveness.”

The sector includes an array of products ranging from microchips and computers to fiber-optic telephone cables. The United States last year exported more than $75 billion in information technology products, and exports this year are expected to reach nearly $100 billion--roughly a fifth of all world trade in the sector.

In addition to the endorsement of the tariff cuts, leaders also agreed to deepen economic and technical cooperation and took the first concrete steps toward their longer-term goal of creating a Pacific free trade and investment area by 2020 by outlining their open-market measure in so-called action plans.

“We reaffirm the primacy of an open multilateral trading system,” stated a declaration issued at the end of the summit.

The international gathering was one of the biggest staged in the Philippines, and it unfolded against a backdrop of extremely tight security, anti-summit street protests and traffic that stood still outside certain priority lanes on arterial roads set aside for conference participants.

A protest motorcade of thousands of left-wing activists jammed into about 500 jeepneys--colorfully decorated minibuses named after U.S. Army jeeps--was prevented by police from reaching the Subic Bay summit site. Some vehicles carried banners demanding, “Junk APEC.”

To protesters, who also rallied in Manila, the summit’s push for global trade liberalization was a step backward for the world’s poor. “Wake up to the reality that our legacy, our dignity, our culture and . . . natural world are being drained away . . . into the offshore accounts of global robber barons,” declared the Manila People’s Forum on APEC.

For Clinton, who left Monday evening for Bangkok in a brief state visit to Thailand, Manila was the penultimate--and most productive--stop on a 12-day postelection swing through the region that enabled him to take on the mantel of world statesman and reassert the United States’ role as a Pacific power.

On Sunday, Clinton held one-on-one meetings with South Korean President Kim Young Sam, Japanese Prime Minister Ryutaro Hashimoto and Chinese President Jiang Zemin. His 85 minutes with Jiang led to an announcement of Sino-American state visits to take place within two years.

While Clinton hailed Monday’s tariff reduction endorsement as “the product of determined, consistent diplomacy,” it was in many ways a personal victory for him and the kind of down-home style of diplomacy he prefers.

Looking relaxed and confident, Clinton was a study in contrasts to the awkward uncertainty he displayed on his first trip to Europe in January 1994. Then, he looked slightly lost as he battled his own inexperience, the formality of a North Atlantic Treaty Organization summit and a set of complex security issues for which he seemed to have little feel. On Monday, he worked in a format that he effectively invented.

Clinton elevated the APEC forum to summit status in 1993 and then gave it an informal touch. In Manila, Philippine President Fidel Ramos continued this tradition of informality--an image that led some pundits to claim APEC actually stands for “A Perfect Excuse to Chat.”

The leaders met not in the capital, Manila, but at a retreat northwest of the city fashioned out of the former U.S. naval base at Subic Bay. Ramos asked the summit participants to wear traditional lightweight, loose-fitting Philippine shirts known as barongs, which underscored the relaxed nature of the setting.

Comfortable both with the setting and dealing with economic issues he knew, Clinton was able to press his argument effectively to win over those leaders who had misgivings about setting a deadline for eliminating the tariffs on information technology, according to U.S. officials.

White House officials say that despite a degree of awkwardness at the first informal APEC summit that Clinton hosted at Blake Island in Washington state, Asian leaders have grown enthusiastic about the rare chance to interact on their own.

“It’s not a ballet; it’s not a precooked event,” one administration official said. “There’s actually a level of spontaneity that allows them to establish relationships that can be useful later.”

* RICH VS. POOR: Everyone says they back free trade. But APEC’s poor nations are less than enthusiastic. D3