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APEC leaders duck free-trade plan

AFP | 22 November 2004

APEC leaders duck free-trade plan

SANTIAGO: Asia-Pacific leaders on Sunday ducked a call to study creating an ambitious free trade area for the region.

In a joint declaration, they "welcomed" the proposal from big business but failed to adopt it.

"We do not want to divert attention from (global trade talks)," Canadian Prime Minister Paul Martin explained to reporters after a summit of the Asia-Pacific Economic Cooperation (APEC) forum in Santiago, Chile.

The APEC Business Advisory Council (ABAC) had asked leaders to set up a high-level task force to examine a proposed Free Trade Area of the Asia-Pacific or FTAAP.

The zone would link Asia and the Americas — a region controlling nearly half of the world’s trade and about 60 percent of its gross domestic product.

"It is not accurate to say that the leaders did not approve the study," Martin said, without elaborating.

"We felt that the most important priority is the Doha Round (of World Trade Organization talks launched in Doha, Qatar, in December 2001)."

APEC ministers setting the agenda for the leaders sidestepped the free trade area issue at their talks which ended Thursday.

APEC sources say the forum was split on the idea.

Chile, the United States, Canada, Australia, New Zealand, Taiwan and Singapore back the plan while others such as China, Japan, Malaysia and Indonesia were cautious or opposed it, the sources say.

Hernan Somerville, ABAC chairman, said his council had explained to the leaders in three letters, and during a special meeting Saturday, the rationale for the feasibility study.

APEC leaders could use it as a "tool" to quicken the pace of WTO negotiations and "put pressure on the Europeans," who have come under fire for lagging behind largely in agriculture reforms, he said.

Most opposition revolved around worries that it might torpedo the WTO round of global trade talks and that developing economies, which are cautiously opening their markets, needed more time to prepare for full competition.

Singapore Prime Minister Lee Hsien Loong had openly backed the FTAAP plan at the sidelines of the summit, saying it "will help us realise concretely" the goals of APEC to knock down all barriers to trade and investment by 2020.

He acknowledged that it might take some time to realise such an "ambitious goal."

But Mr Lee said while APEC worked towards a single free trade deal for all its
21 member economies, it should in parallel aim for a more comprehensive web of
bilateral free trade agreements.

Chilean President Ricardo Lagos, who had strongly backed the FTAAP plan, appeared to back down.

"It’s an important step but not the final objective (and) this is the reason why Doha Round is so important," he told reporters.

 source: Channel News Asia