Apec's 'C' word first test at free trade talks

WARREN GAMBLE writes that the subjects of lamb, steel and Mike Moore may prove tricky for New Zealand during the leaders' summit.

When trade ministers meet there are long words, high-sounding aims - and the real business of give and take.

Liberalisation and facilitation are two of the buzzwords that will roll off the tongues of trade leaders from the Asia-Pacific Economic Cooperation economies when they gather in Auckland next week.

But first they will have to work on the "c" word in the grouping's name - cooperation.

Because, as usual, the lofty, longer-term Apec mission of free trade and strong markets could be overshadowed by more down-to-earth tussles over lamb, steel and Mike Moore.

For New Zealand this could be particularly tricky.

As chair of Apec this year, and with the leaders' summit only three months away, it wants to quietly re-start the free-trade agenda, which stalled in Kuala Lumpur last year.

In the incremental world of Apec, it would be a win for the Minister for International Trade, Lockwood Smith, to get the 21 members singing the same song, no matter how muted.

New Zealand particularly wants the meeting, and later the Apec leaders, to back a push for industrial goods to be on the World Trade Organisation agenda for the negotiating round in Seattle in November.

Without industrials, the round would have little impetus, if it got off the ground at all. European countries, in particular, would need a trade-off for opening up their subsidised agriculture sectors - the glittering prize for New Zealand exporters. Agriculture and services are already on the WTO agenda.

New Zealand also wants buy-in from ministers over one of its main themes for the year - strengthening markets. In the wake of the Asian crisis there is wide agreement for moves to ensure the region's banking systems are robust.

However, the slow crawl to free trade might be left in the dust if US President Bill Clinton's delayed decision on imposing tariffs on New Zealand and Australian lamb comes out before next Tuesday's meeting.

Dr Smith might try to claim a success for New Zealand lobbying if the decision is only to impose tariffs on extra lamb exports to the US.

But it would be straining even his formidable grin if the decision hits existing exports at the same time as Apec trade ministers are talking about removing barriers. Especially since next Monday Dr Smith will host some of his counterparts, including US Trade Representative Charlene Barshefsky, in a seminar on liberalisation, including ways to improve public understanding.

Lamb is certain to be on the agenda, if not the menu, when the pair hold a bilateral meeting on Monday. Ambassador Barshefsky's deputy Richard Fisher has already tried to distance the potential lamb tariffs from the wider Apec agenda, saying even the "best of marriages has its pressure points."

But even the most diplomatic of diplomats, New Zealand's Apec chairman, Maarten Wevers, said a US lamb tariff was not the most supportive signal for free trade.

For Ambassador Barshefsky, though, lamb may be the least of her problems. She faces bigger and thornier trade issues with Japan and China, which will both have representatives in Auckland.

With Japan, the argument is over steel, and American producers' push for protection against the imported product, mainly from Japan. President Clinton has vetoed a bill imposing steel quotas, and the focus now shifts back to whether "safeguard" tariffs will be imposed.

With China, there is the bitter aftermath of the Nato bombing of the Chinese Embassy in Belgrade which has halted talks on China's accession to the WTO. On top of this will be the diverting tussle between former New Zealand Prime Minister Mike Moore and the Thai Deputy Prime Minister, Supachai Panitchpakdi, for the deadlocked top job in the WTO.

That issue will not arise in any of the formal meetings, but will be talked about where much of the business gets done - in hotel rooms and corridors.