Staff writer

The Asia-Pacific Economic Cooperation forum has drawn up a draft action program to implement an agreement reached last year to liberalize trade in nine specific industrial sectors, beginning next year, government sources said Tuesday.

The draft action program calls for, among other things, the elimination by 2002 of import tariffs for forest products and by 2005 for fish and fish products, the sources said. But it is these two sectors particularly that Japan sees as too "sensitive" to liberalize, they said.

The action program, which also sets specific time frames for liberalizing the seven other industrial sectors, will be discussed at a meeting of APEC's trade and investment committee in Malaysia on Thursday and Friday, the sources said.

The 18 APEC member economies agreed at an annual ministerial meeting in Vancouver, British Columbia, last November to implement tariff reductions and take other trade liberalization measures in the nine sectors, beginning in January 1999.

The agreement reached at the ministerial level was endorsed by top APEC leaders meeting during their fifth informal summit immediately after the ministerial talks. The agreement is aimed at maintaining momentum toward the APEC goal of achieving free trade and investment by 2010 for industrialized members and by 2020 for developing members, despite the financial crisis that has swept through East Asia since last summer.

The nine sectors identified by the APEC ministers for "early voluntary sectoral liberalization" are: environmental goods and services; fish and fish products; forest products; medical equipment and instruments; toys; energy; chemicals; gems and jewelry; and telecommunications.

At the Vancouver meeting, the APEC ministers agreed to finish mapping out details of liberalization measures for the nine sectors during the first half of this year. The work is expected to be completed at a meeting of APEC trade ministers in Malaysia in June. The nine sectors are estimated to represent about $6.5 trillion in commerce.

The draft action program for implementing early sectoral liberalization calls for the elimination of import tariffs by 2000 for some forest products and by 2002 for the remaining forest products, the government sources said. However, it gives the APEC member economies until October to study the question of removing nontariff trade barriers, including quantitative import restrictions, for the forest products, the sources said.

The draft program also calls for the elimination of import tariffs for fish and fish products by 2005 and for the removal of nontariff trade barriers by 2007, the sources said. While joining the agreement on an early liberalization of the nine sectors, Japan has expressed reluctance to liberalize imports of fish and forest products for fear of seriously threatening weak domestic producers.

Japan protects the fishing and forestry industries, which are also politically powerful, from foreign competition. For example, Tokyo imposes import quotas on eight categories of fish products, including squid, mackerel and horse mackerel, from about 100 countries.