Southeast Asian Countries Divided on Trade Liberalization Before Summit
International Herald Tribune
November 14, 1995
Michael Richardson 

Sharp divisions are showing through the impressive common front usually presented by ASEAN as the group's officials and other members of a Pacific Rim trade group prepare here for their annual meeting on Sunday.

The disagreements concern whether countries of the Association of South East Asian Nations should have the right to exclude politically sensitive sectors of their economies from a regional free trade arrangement being negotiated by the Asia-Pacific Economic Cooperation forum. APEC, an 18-member trans-Pacific trade and economic cooperation group, will hold its ministerial meeting in Osaka on Thursday and Friday and the leaders' summit on Sunday.

ASEAN's divisions mirror the sharp divide in APEC itself over demands by Japan, China, South Korea and Taiwan for special treatment for their agriculture, particularly rice.

ASEAN's position on this issue is being closely watched by countries like the United States, Australia and Canada that are leading the fight to ensure that all sectors are included in the APEC plan to achieve free and open trade and investment in the region by no later than 2020.

Senior APEC officials on Monday agreed to leave four difficult issues, including agriculture, to be resolved at the meeting of the group's foreign and trade ministers on Thursday and Friday, Japanese government officials said.

In recent comments that are certain to cause offense to President Suharto of Indonesia, Rafidah Aziz, Malaysia's minister for international trade and industry, said that the split in APEC over exempting sectors such as agriculture from the regional free trade plan could be traced to the 1994 summit in Bogor, Indonesia, "which did not take into account the rumbling of dissent" among members.

Malaysia's prime minister, Mahathir bin Mohamad, made a similarly pointed criticism of the way the Indonesian summit was prepared and run.

[Mr. Mahathir said Monday that his country would not be held to APEC deadlines for opening its markets, but he expected progress on a farm trade dispute at the summit, Reuters reported from Auckland.

["We cannot be held down for any particular date," Mr. Mahathir told a news conference at the Commonwealth meeting in New Zealand. "We must be allowed to consider whether we are ready or not ready to open up our markets."]

ASEAN unity in its approach to APEC was openly shattered in 1993 when Mr. Mahathir boycotted the Seattle summit hosted by President Bill Clinton on the grounds that Malaysia had not been adequately consulted in advance.

Malaysia also said it was concerned that APEC was being dominated by its more powerful developed members, overshadowing and weakening ASEAN, which has emerged as one of the world's most effective regional cooperation bodies since it was formed in 1967. This year, although Mr. Mahathir announced recently that he would go to Osaka, the divisions in ASEAN over APEC appear deeper than ever.

Indonesia, Singapore, Thailand and Brunei have joined Australia, the United States and a majority of APEC members in supporting comprehensive coverage for free trade.

They argue that different treatment for sensitive sectors would undermine APEC's credibility and could unravel the liberalization process.

"If several countries want to exempt certain sectors from the agenda, others will want to do the same," said Bintoro Tjokroamidjojo, Mr. Suharto's special assistant for APEC.

"In the end, all we will have is any empty basket."

In a recent interview, Goh Chok Tong, Singapore's prime minister, said that liberalizing trade was a painful process and had a political cost.

"However, over the long run, the reduction of tariffs and other barriers to trade will benefit our respective economies," he said.

"Sensitive sectors can be liberalized at a slow pace," he added. "The Bogor declaration allows for that."

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