Minister wanting to get Apec steaming again

By Brian Fallow

WELLINGTON - New Zealand's task, when it chairs Apec this year, is to overcome private sector perceptions that the forum has run out of steam, says the Minister for International Trade.

Last year's summit in Kuala Lumpur "didn't quite pull off" the hoped-for voluntary liberalisation of trade in nine sectors, including forestry and fishing, and sent the issue to the World Trade Organisation instead.

That left the impression that Apec was good at talking the talk, but not walking the walk, said the minister, Lockwood Smith.

The failure arose not only from Japanese intransigence over fishing and forestry, but from the United States' need for a "critical mass" of acceptance for trade liberalisation measures, before it can sign up to them.

Short of the critical mass of support - 85 per cent of world trade in the sector concerned - there was too much of a free-rider problem for the United States.

New Zealand officials were beavering away within the World Trade Organisation to win that level of support for the tariff elimination programme, lobbying the Europeans this week.

"There is quite some interest but it is still too early to say whether we will be able to get a deal signed up this year," said Dr Smith.

Another criticism of the Kuala Lumpur meeting was that the private sector was not as involved, as it might have been.

Parallel to Apec's political processes was the work of the Apec business advisory council, but how much influence reports from the latter had on the former was debatable.

New Zealand was determined to expand the opportunities for business people to interact with Apec's official processes.

Dr Smith said people attending the business forums held alongside Apec's small and medium enterprises conference in Christchurch next month, and the trade ministers' meeting in Auckland in June, would get a chance to question and discuss matters directly with the ministers present.

One of the goals for Apec this year was strengthening markets in the wake of the Asian financial crisis.

Because Apec included three of the G7 powers (the United States, Japan and Canada) and many of the developing economies affected by the crisis, it offered an excellent mechanism for the developing countries' concerns and a perspective which could be fed into the G7's deliberations about global financial architecture.

"But we have to be careful not to give the impression that there is some magic bullet that saves you from doing the difficult strengthening-markets work.

"Apec is not going to develop some simple mechanism to control capital markets."

Instead its contribution to preventing a repeat of the Asian crisis is likely to lie in facilitating the flow of expertise to countries wrestling with reforming their regulatory environments, banking disclosure, securities and insolvency law, accounting standards and the like.