APEC gears

up for action

A U S T R A L I A

Jemima

\Garrett

There is no doubt that the Asia Pacific Economic Cooperation (APEC) process has established itself as the pre-eminent force in this vast, diverse and dynamic region, actively attacking its core function of trade liberal isation between its 18 member countries, which range from Mexico, Chile and the United States in the east, Thailand in the west and Australia and New Zealand in the south and include all the members of the Association of South-East Asian Nations (ASEAN) as well as China, Japan, Hong Kong and Taiwan.

More than that, its annual leaders’ meeting is proving an immense asset, tying the United States into east Asia as APEC’s originators had hoped it would and creating a greater sense of genuine community of interest than had ever been there before.

At the most recent APEC leaders’ sum mit in Subic Bay in the Philippines, it was meetings outside the summit itself which in many ways produced the most signifi cant progress. APEC provided a neutral venue allowing US President Bill Clinton to meet Chinese President Jiang Zemin to begin to sort out political tensions fester ing between the two countries in the past three years.

Australian Prime Minister John Howard also had resolving tensions with China as his first priority, and also met with Zemin to put relations back on a pos itive footing. Howard is one of the few Australian prime ministers in recent years to come into the nation’s top job without a

strong background in foreign policy. The

fact that a small part of his predecessor Paul Keating’s demise was attributed to his failure to explain his Asian exploits and Howard’s weak stand against the maverick, MP Pauline Hanson, had left

many wondering about Howard’s commit ment to APEC and its agenda. By the end of the Subic Bay meeting, Howard was clearly a convert. “Leaders of govern ments must constantly explain the benefits of trade liberalisations, trade globalisation and economic globalisation,” he said.

“One of the things I am certainly going to do as a result of this meeting is to step up the explanation ... and communication to the Australian public of the benefits ... because there are great benefits.”

At Subic Bay, APEC countries pledged to move from vision to action. Developed APEC nations have promised to reduce tariffs to zero by 2010 and developing nations (including Papua New Guinea, the Pacific’s only APEC member) by 2020.

Since they first set these targets back in 1994, reform has accelerated dramatically.

For the Pacific, tariff cuts spell the end of preferential trade agreements on which many exports have relied. The Lome agreement with Europe which has sup ported sugar and coffee exports to Europe expires in 2000 and by 2010, when Australia, New Zealand and the US must meet their APEC commitments, the value of the SPARTECA agreement and the General System of Preferences, which have given life-blood to Fiji’s garment industry, will become valueless.

So how can the Pacific gain from APEC? APEC is about a lot more than tar iff cuts. Within its trade facilitation initia tives are developments which will make it much easier and cheaper for island nations to enter Asian markets. Take customs, for instance.

The average international transaction involves 27 to 30 different parties and 40 documents. Import documentation and other formalities add seven to 10 percent to the value of goods traded intemational

ly. By next year, APEC aims to have one simplified set of customs procedures for all countries and introduce a new comput erised messaging system in 1998 to fur ther reduce paperwork.

Similar moves are being made in areas such as investment procedures, quality

control standards, simplified labelling

requirements and streamlined visa pro cessing for business travellers. Island exporters could also benefit from work done to improve access for small- and medium-sized enterprises to markets, market information, finance, managerial skills and technology.

Although most Pacific Island countries are not members of APEC, they have access to APEC’s meetings and working groups through the South Pacific Forum Secretariat which has observer status. In the past year, two Pacific Island ministers attended APEC ministers’ meetings. With the effects of the Secretariat’s restructure starting to be felt, the Forum will now have the capacity to attend APEC working groups with relevance to the Pacific, such as those on fisheries and tourism. PNG is also hoping to play a role in disseminating information about what is happening in APEC and plans to set up an APEC Study Centre in Port Moresby.

As trade facilitation measures make business with Asia easier, they will put pressure on island nations to introduce reforms themselves if they want to contin ue to attract trade and investment.

Successive meetings of Forum heads of government and of Forum finance minis ters have shown growing interest in tack ling these issues. At this year’s Forum Finance Ministers’ meeting in Caims, in July, tariff reform options and investment transparency will be at the top of the agenda. ■