Sunday, November 15, 1998 Published at 10:10 GMT
Pacific trade pact failure
Japanese fishing rights have held up pact
Ministers from the Pacific Rim nations have failed to agree a pact which would have cut tariffs on global trade worth $1.5 trillion.
The pact, which would have lifted tariffs on nine key industries, has foundered on Japanese objections.
Trade and foreign ministers from the 21-member Apec forum, meeting in the Malaysia capital, Kuala Lumpur, had hoped to conclude the pact for Apec leaders to sign during their summit there on Tuesday and Wednesday.
US and Japan at loggerheads
The United States argued that Japan had to agree in all nine sectors to give the pact weight.
Washington said this would send a strong signal that Asia was not turning protectionist, despite its worst economic crisis in 50 years.
The original aim was to have the tariff reductions in the nine sectors effective by 2002, as a start toward Apec's ultimate goal of a free trade area in the Pacific by 2020.
The Pacific rim forum accounts for 55% of world trade worth $5.2 trillion.
The nine sectors Apec wants to open up are environmental goods and services, fish, forest products, medical equipment, energy, telecommunications, toys, gems and jewellery, and chemicals.
Host's moves towards protectionism
The summit - aimed at promoting economic recovery in the region - is being hosted by Malaysia, whose prime minister has moved towards economic protectionism.
Dr Mahathir Mohamad's recovery plan amounts to a total rejection of the International Monetary Fund prescription of economic austerity and open markets.
His former deputy, Anwar Ibrahim, favoured a more cautious approach which is one of the reasons he was sacked.
Mr Anwar's dismissal has sparked violent calls for reform in a country suddenly plunged into recession.
The BBC Asia Business Correspondent, David Willis, says the irony of holding a free trade summit in a country that has such grave doubts about the benefits of globalisation is not lost on officials.