Fri, Nov. 18, 2005
Two-nation trade talk of town at summit
BUSAN, South Korea - As world leaders gathered Friday for their annual talks on building a free trade zone that circles the Pacific, they were also spending time in sideline huddles forging one-on-one agreements.
That’s because the Asia Pacific Economic Cooperation forum’s free-trade goals may be a fine idea, but it’s often speedier to work out bilateral deals, officials say.
"We’re not going to shy away from those," said Andre Lemay, spokesman for Canada’s APEC delegation. "Dealing one-on-one, it’s much simpler."
A meeting on APEC sidelines between Canadian Prime Minister Paul Martin and his Japanese counterpart Junichiro Koizumi set for Saturday afternoon is expected to take to another level talks that began in January to hammer out a framework for boosting trade and investment between the two nations. Such talks often precede official free trade negotiations.
Year after year, APEC meetings - including this year’s in the South Korean port city of Busan - have reaffirmed the larger vision for a regional free trade union.
APEC’s 21 members, which make up 60 percent of the world’s economy, have the goal of setting up a free trade zone by 2010 for industrialized nations, and developing ones by 2020.
Each year at their summit, leaders reaffirm their commitment to the goal and endorse a raft of "action plans" and "peer reviews" monitoring progress toward it. But some analysts and business executives who take part in APEC meetings worry that progress it too slow.
In the meantime, the two-nation free trade agreements, or FTAs, keep on coming.
"FTAs are all the rage. They’re in," said Keiichiro Kobayashi, an economics expert at the Research Institute of Economy Trade and Industry in Tokyo.
Kobayashi warned the appeal of multilateral agreements could be dimmed by sprouting two-way accords, although the global economy is likely to benefit more from all-encompassing agreements in the long run. Some nations are even worried about getting left behind if they don’t get bilateral arrangements, he said.
On Friday, China and Chile signed a bilateral free trade accord, China’s first with a Latin American country.
South Korea agreed to strengthen economic cooperation with Peru, and later Panama, this week on the sidelines of APEC.
During his APEC visit, Peruvian President Alejandro Toledo said his nation was finishing negotiating free trade agreements with the United States, Thailand, Singapore and Chile, and had started talks with China.
The rush of such deals prompted Jae-hyun Hyun, head of APEC’s Business Advisory Council, composed of business people from each of the 21 member economies, to urge leaders to get serious about global trade discussions and pointed to the spread of bilateral pacts as a reflection of stalled wider talks.
Roberto R. Romulo, chairman of the Philam Insurance Co. Inc. and a member of the ABAC, said FTAs went against the principle of the World Trade Organization, which has been faltering in trying to reach a global trade accord.
"We believe in the long term there has to be a common template," he said.
Lemay, the Canadian delegate, said efforts to achieve wider trade rules were still important in offering "a level playing field" for participants.
"Both have their place," he said.
AP Business Writer Kelly Olsen contributed to this report.