Staff writer

The 18 member economies of the Asia-Pacific Economic Cooperation forum have agreed in principle to set up a new high-level suborgan to oversee and further promote economic and technical cooperation within the region.

Japanese government sources said Wednesday that APEC members will make a final decision during annual ministerial talks in Vancouver, British Columbia, later this month. The ninth annual ministerial meeting will be followed immediately by a fifth informal summit of APEC leaders.

The move comes at a time when many developing APEC members in Asia are becoming increasingly cautious about opening their markets wider to foreign competition amid the protracted currency and stock turmoil, which was triggered by the de facto devaluation of the Thai baht in July. "With the establishment of a new suborgan on economic and technical cooperation, the focus of APEC attention may shift back to that theme from trade and investment liberalization, at least over the next couple of years," one of the sources said.

The new body will be made up of senior government experts. It will oversee the 10 existing APEC working groups that, at a lower level, are discussing ways to promote economic and technical cooperation in such sectors as energy and tourism, the sources said. It will directly report to the APEC senior officials' meeting, or SOM as the highest working-level APEC suborgan is commonly called, the sources said. SOM meets several times a year to prepare for annual meetings of ministers and top leaders.

APEC's work consists of three pillars:

1) Liberalizing trade and investment through deregulation and tariff reductions;

2) Facilitating trade and investment through such means as simplification of customs procedures;

3) Promoting economic and technical cooperation.

The grouping was inaugurated in 1989 with promotion of economic and technical cooperation along the Pacific Rim as its top-priority objective. But in recent years, liberalization of trade and investment has been in the spotlight while the theme of economic and technical cooperation has been largely pushed to the back burner, leaving many developing member economies in Asia disgruntled.

The agreement in principle to set up the new suborgan is the result of a compromise between the grouping's industrialized and developing member economies. China and Southeast Asian members, apparently wanting to refocus APEC's attention on economic and technical cooperation, had insisted on creating a new high-level committee that would match the status of APEC's trade and investment committee, the sources said. But most industrialized APEC economies, including the United States and Japan, opposed establishing a new committee, the sources said.