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Monday, June 28, 1999 Published at 11:54 GMT 12:54 UK

Business: The Economy

Apec fails on trade deal

Successful exporters like Vietnam's rice farmers hope for open trade

Trade ministers from 21 Asia-Pacific Economic Co-operation (Apec) countries have failed to reach a deal on major trade issues - but they have decided to refer the issue to the World Trade Organisation (WTO), in the hope of liberalising tariffs worldwide.

Deputy US trade representative Susan Esserman said the agreement had to "get a critical mass of countries" to provide effective tariff liberalisation.

Apec officials are currently meeting in Auckland, New Zealand, to talk about the slashing of import barriers and duties in the region.

Reluctant free-traders

The six sectors in question - oilseeds, food, rubber, fertiliser, civil aircraft and automotive products - are important mainstays of the region's economies.

[ image: Oilseeds like palm oil are among the most contentious issues on the Apec agenda]
Oilseeds like palm oil are among the most contentious issues on the Apec agenda
However, some Apec countries are already objecting to fast-track plans for free trade.

Russian officials said they were against a speedy liberalisation of the food sector.

Thailand's Deputy Prime Minister - and candidate for the post of WTO director-general - Supachai Panitchpadki, meanwhile, said his country would find it difficult to lower barriers for the oilseeds trade.

Apec has a troubled history of trade liberalisation. In 1997, Apec leaders agreed to introduce free trade in 15 sectors.

However, negotiations on nine of them soon collapsed, after Japan refused to open up its fisheries and forestry products sectors.

The WTO side-step

Shunting the other six sectors on to the WTO stage will not speed up the process of opening up trade either.

New Zealand's trade minister, Lockwood Smith, told his colleagues that the WTO was not the right place to negotiate wider liberalisation, because trade agreements there tended to target not sectors, but specific items like beef, steel or bananas.

Originally, the Apec countries had hoped to agree on a package of "Early Voluntary Sectoral Liberalisation". This ambitious plan appears to have been shelved for now.

Talks on WTO leadership

Meanwhile, on the sidelines of the meeting attempts were being made to resolve the WTO leadership issue. The organisation is currently deadlocked between Mr Supachai and former New Zealand Prime Minister Mike Moore.

Most Asian countries back Thailand, but Mr Moore has mobilised support in the United States, Latin America, and Europe.

The Australian trade minister suggested that both candidates might be able to share the role.

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