Japan ends hope for solidarity in Seattle

By Brian Fallow

Hopes for an early harvest from the coming World Trade Organisation round, possibly including tariff cuts for forest products and fish, are on life support.

Apec officials yesterday failed to agree a common position to put to their political masters.

The WTO negotiating round begins in Seattle in December. Some, like New Zealand and the United States, want limited early agreements from the round. Others, like Japan, want a single comprehensive undertaking at the end of the round.

Trade Minister Lockwood Smith was last night still expressing optimism that the gap could be bridged between the groups.

"I think there's every chance we can find a way through that," said Dr Smith, who has been advocating the idea that early agreements could be "provisional" on a successful conclusion of the industrials' negotiations.

But while it is conceivable the trade ministers, who meet today, can succeed where their officials have failed, it is more likely the issue will have to be grappled with within the WTO in Geneva without a common Apec position.

Last year's Apec leaders' meeting, in Kuala Lumpur, kicked to touch plans for early tariff elimination in eight sectors, including forestry and fishing, by sending them to the WTO.

The countries who want early progress in these sectors are afraid that if they are caught up in a full WTO negotiating round embracing industrial goods, agriculture and services, it will be three years at least, and quite likely more, before any deal is struck.

But other countries are concerned that if they agree to an early deal on the eight sectors they will lose horse-trading traction for other areas they care about more.

The Japanese have domestic political reasons for deferring as long as possible any agreement on such "sensitive" matters as fishing and forestry.

The US administration has an interest in imparting as much momentum as possible to the Seattle round at the outset because it is bound to encounter the head-winds of increasingly protectionist sentiment as the US trade deficit widens, and the cross-winds of an election year in 2000.

A form of words fudging the disagreement between early harvesters and single undertakers seems the likeliest outcome of the Auckland meeting.