Ibrahim Nafie takes a look at the recent APEC meeting and its wider effects on the world The annual summit of the Asia Pacific Economic Cooperation (APEC) forum, held early this week in Hanoi, has paved the way for further liberalisation of international trade. The 21-nation APEC accounts for about 40 per cent of the world population, 60 per cent of global output, and 50 per cent of international trade. The gathering brought together major industrial nations such as the US, Canada and Japan, fast growing nations such as China and Vietnam, and countries with major energy sectors such as Russia. APEC leaders discussed the trade issues first broached during the Doha talks in 2001 that are still unresolved. With major trading nations under pressure to make significant concessions, APEC provided a timely opportunity for negotiations among those countries that push for further liberalisation of agricultural products -- including Canada, Australia and New Zealand -- and those that press for greater liberalisation of trade in industrial products and services -- including the US, Japan and South Korea. The EU, which is still subsidising its agriculture, was visibly absent from the summit. Although it is not a member of APEC, the EU position is crucial for trade talks. The final statement of the summit offered some hope. A compromise was reached among the exporters of agricultural goods, who are pushing for liberalisation, and the importers of agricultural goods, who are still subsidising farmers. The compromise is likely to hold, but only if the EU decides to play along. APEC leaders made it clear that they were ready to resume the Doha talks with a fresh perspective. The APEC statement envisions further reductions in tariffs on industrial imports and fewer barriers on commercial services, things that are likely to please the EU. The statement was nothing short of a breakthrough, for the US had come to the summit with an alternative plan calling for the creation of a free trade zone among APEC members. The US plan was resisted by Asian nations, who want the negotiations on international trade to be resumed first. The regional approach to the liberalisation of trade is seen by many, especially in the developing world, as an attempt to bypass the need for serious concessions in multilateral trade negotiations. President Bush has been trying to push for a free trade zone in the Americas, but most Latin American countries rejected the idea for similar reasons. Interestingly, most of the APEC nations are involved in regional economic and trade arrangements. The US is a member of NAFTA (North American Free Trade Agreement), a regional group comprising both Canada and Mexico. The US has a free trade agreement with Chile, also a member of APEC. In addition to this, the US is a major trading partner with China, Vietnam, and Japan. Asia has its own regional organisations, one of which is ASEAN (Association of Southeast Asian Nations). Most of ASEAN members double as members of APEC and amongst themselves, they have a plan to create a common market by 2015, a development that would help smaller countries stand up to the larger economies of China and India. ASEAN countries are reluctant to engage in a free trade arrangement with major APEC members, such as the US, Japan, China, South Korea and China. Instead, they believe that the Doha talks offer them a better prospect. APEC's summit reviewed major global issues, such as terrorism, bird flu, North Korea, Iran and Iraq. Several APEC countries, especially Japan and South Korea, are worried about North Korea's nuclear programme. But when the US tried to use the APEC summit to put together a tight blockade on North Korea, the move was resisted. Even South Korea, which said they supported the US plan, refused to agree to inspect ships heading for North Korea. The US had wanted to get the matter settled at APEC, where all six countries involved in talks, apart from North Korea, were present, but met with little success. So Washington will have to wait for the six nation talks to resume. The good news, however, was that the Doha trade talks are likely to resume with significant concessions on all sides.
