Sutton gives early trade talks B pass

By AUDREY YOUNG in Bangkok

Apec Trade and Foreign Ministers believe movement on the issue of "trade facilitation" may be a way to give the World Trade Organisation's Doha round a kick-start after the collapse of the Cancun talks in Mexico last month.

Trade facilitation was one of the four "Singapore" issues over which the talks on a trade liberalisation treaty foundered because of a refusal to negotiate them, most notably by the African Caribbean Pacific group of countries.

Apec ministers agreed on a joint position on Saturday in Bangkok ahead of the leaders summit starting today.

The ministers urged the WTO to pick up where it left off at Cancun on issues such as agriculture, industrial market access and the Singapore issues (trade facilitation, government procurement, investment and competition) when trade envoys meet in Geneva in December.

The ministers also instructed senior officials to review the experience of Apec in capacity-building areas and to focus on the needs of developing economies.

Trade Negotiations Minister Jim Sutton said the idea was to make use of Apec's "stock in trade" experience in trade facilitation.

The approach puts the issue in the context of providing development assistance to improve customs services, for example.

Mr Sutton said if there was no substantial objection by Africa and the Caribbean, it would be taken in WTO circles as acknowledgment by the small developing economies that they were prepared to have another look at trade facilitation.

"As I see it, that can be the starting point for rebuilding momentum in the round."

But he said it was not just momentum that was needed.

"You have to build trust again and confidence that the negotiating system can work and trust that people will be approach it in good faith. I think Apec has created an opportunity for the first small step to be taken."

It was now up to other groupings within the WTO to indicate areas of flexibility.

Asked how he rated the ministers' achievement he said, "I think we've got a B pass. But as we all know, a B pass if it is followed up can get you a very good degree. It's now up to the leaders to sit the next exam."

Commenting on the burgeoning number of bilateral trade agreements being negotiated among Apec members he said he was not worried by the number but the quality of them.

"I am worried that some FTAs [free trade agreements] are not high quality and thus capable of being stumbling blocks to the progress of the international trading system, whereas high-quality comprehensive FTAs such as CER between Australia and New Zealand and the CEP [Closer Economic Partnership ] between New Zealand and Singapore definitely are building blocks rather than stumbling blocks.

"They do make trade easier and they provide an incentive for others to liberalise.

"Some of the second-rate FTAs ... pick the low-hanging fruit and leave all the difficult and sensitive sectors for another day, thus reducing the incentive for countries to ever deal with the sensitive issues because they don't have the sugar pill and low-hanging fruit to help it go down."

Mr Sutton said he spoke to the United States trade representative about a free trade agreement with New Zealand and was grateful for his "friendly advice".

New Zealand had its "fingers crossed that Australia would get a "high quality" free trade agreement with the United States.

The longer it took, the harder it would be to get it finalised as the US would be swept up in presidential election fever next year.