HIROSHIMA – While Japan chairs the Asia-Pacific Economic Cooperation forum for the year and presses for freer trade, 2010 may be an unforgettable year, impacting trade the opposite way if the Doha global trade liberalization talks under the World Trade Organization falter.
There are fears the collapse of the eight-year-old talks, which face a self-imposed deadline this year, would seriously hurt international resolve to fight protectionism. At the same time, though, some experts and officials say the demise could help boost efforts by the 21-member APEC for further economic integration.
The 153-member WTO seeks to successfully conclude the Doha Round talks this year, having missed deadline after deadline. However, no breakthrough has been seen, with key players refusing to make concessions on such issues as tariff cuts and reductions in export subsides.
The Doha negotiations, launched in 2001 to help poor nations by enhancing trade, were originally intended to be concluded in 2005. The Japanese government has committed to supporting multilateral trade principles under the WTO.
While it is said an outline agreement must be reached by summer to meet the yearend deadline, Minister of Economy Trade and Industry Masayuki Naoshima recently admitted that the Doha Round is in a “make-or-break phase.”
As APEC chair, Japan aims to boost the forum’s efforts to create a regionwide free-trade zone while having to lead the way in assessing how successfully the group’s developed members have freed up trade and investment in their areas.
It is unlikely Japan’s chairmanship will survive unscathed if the WTO fails and the global momentum to seek freer trade is slowed.
“We have to expect some backlash,” a Japanese official said on condition of anonymity, but added Tokyo will “seek a chance to enhance relationships within APEC in that case.”
Analysts back such a view, saying that if the WTO system proves less productive than hoped, APEC may emerge as a more reliable foundation to enhance trade between Pacific Rim economies.
Junichi Sugawara, an analyst at the Mizuho Research Institute, said Japan as APEC chair wouldn’t be immune to negative fallout from a Doha failure, but that the impact would be limited.
“The current confusion in the Doha talks is due largely to some key players, including the United States and India, which have failed to make sufficient concessions to clinch a deal,” Sugawara said.
“Although Japan is known for being reluctant to open up its farm product market, it is unlikely that Japan will have to bear the brunt of all criticism for the collapse. Heavier responsibilities lie with others,” he said.
APEC has been shifting its focus to creating its own free-trade zone. Senior officials from the member economies gathered Monday for a two-day meeting in Hiroshima, where exploring possible pathways to a Free Trade Area in the Asia Pacific, or FTAAP, is high on the agenda.
But the attempt to build a consensus among various members has revealed problems, with some members, especially China, remaining cautious toward the United States establishing a strong foothold in Asia.
International trade officials say Beijing hopes instead to push for an economic integration based on the “ASEAN-plus-three” grouping, which involves the 10-member Association of Southeast Asian Nations plus Japan, China and South Korea — an idea that would also exclude such APEC members as Australia, a U.S. ally in the Pacific.
The United States last November recommitted itself to negotiating the previously obscure Trans-Pacific Partnership, a comprehensive regional free-trade agreement that currently groups four of the APEC members — Brunei, Chile, New Zealand and Singapore.
Experts say the U.S. move can be seen as a counteraction against the development of ASEAN-plus-three integration. The Trans-Pacific Partnership members are to hold a meeting in March and discuss the expansion of its membership with four other APEC countries — Peru, Vietnam, Australia and the U.S.
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