APEC: Japan Baits a Farm Trade Deal, But Big Fish Fail to Bite

By Suvendrini Kakuchi Reprint | | Print |

Suvendrini Kakuchi

TOKYO, Nov 14 1995 (IPS) - Like a fisherman anxiously watching skies darken, Japan is throwing line after line into the turbulent waters of APEC farm trade liberalisation, but as the days count down to Sunday’s summit, a compromise catch seems doubtful.

Last week, Tokyo threw out its first bait in the form of a leaked draft proposal suggesting that member nations of the Asia-Pacific Economic Cooperation (APEC) grouping take “different steps in specific sectors”.

This would allow Japan to opt out of liberalising trade in its agricultural sector — something South Korea is also keen to do — but which is not acceptable to the big fish of Australia or the United States, both of whom frowned on the wording of the draft.

Then on Monday, a new draft proposal was dangled to Japanese news agencies dropping the “different steps in specifics sectors…”

According to the Jiji news agency, the new document proposes that APEC members can “flexibly conduct liberalisation, taking into consideration aspects of economic conditions and differences in levels of economic development”.

“A major issue is whether flexibility can be allowed in the principle of comprehensiveness,” said Ryutaro Hashimoto, Japan’s International Trade and Industry Minister.

The Kyodo news agency further quoted Hashimoto saying: “For Japan, agricultural trade is of major concern. Keeping in mind that every country has its own problem, we would like to draw a conclusion at the ministerial gathering.”

There has been no immediate reaction here to the latest leaked document, however government officials in Tokyo and other capitals in the 18-member APEC, are becoming increasingly doubtful that any concrete decisions will be taken at the Nov. 19 summit meeting in Osaka, Japan.

“APEC is overrated in terms of being a base for achieving concrete proposals,” said Osamu Hayakawa, a Japanese government official who has been involved in the pre-summit discussions.

“There is a huge gap that divides Japan and other Asian countries which want the organisation to be a base for friendly discussion, and the United States which promotes decisions,” he told IPS.

The United States, the main market for Asia’s exports, is keen that Osaka will be a major stepping stone to turn APEC into a free trade area in keeping with the decision taken at the Bogor, Indonesia summit last year.

Leaders agreed then that developed countries in the forum would remove trade and investment barriers by 2010 and developing nations by 2020.

Now, however, Japan is seeking to delay agricultural liberalisation — similar reservations have also been expressed by China, South Korea and Taiwan — while Malaysia has made clear that they want to free up their markets at their own pace.

In Auckland on Monday, the final day of a Commonwealth Heads of Government Meeting, Malaysian Prime Minister Mahathir Mohamad said his country would not be “held down” to APEC deadlines for opening up its market.

“We cannot be held down for any particular date. We must be allowed to consider whether we are ready or not ready to open our markets,” Mahathir told reporters.

And he is not surprised by the various disputes that have arisen in the lead-up to Sunday’s meeting. “In APEC, there is no common background. We are competing economies, and when you are competing you need to hang on to whatever competitive advantage you have. And when you are weak in certain areas, you need to have some protection,” Mahathir said.

APEC comprises Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Philippines, Singapore, Taiwan, Thailand and the United States.

Analysts and officials here point to the diverse politics, economies and cultures of the grouping, and say the wide differences are not only now emerging, but were always there.

Indonesia, one of the forum’s largest members, has a military government and Muslim culture; Mexico is the only Latin American country in the organisation; and Papua New Guinea, a cluster of tiny islands in the Pacific, is an impoverished nation heavily dependent on the export of its natural resources.

Australia along with the United States and Canada, on the other hand, are rich industrialised nations pushing the principles of free trade and democracy.

Japan, the big brother in Asia, follows its usual middle-path diplomacy, walking a tightrope between the United States, which is its closest diplomatic ally, and the Asian developing world, a region where it plays a leading economic role.

“Against such a hodgepodge background, how on earth can you expect the organisation to work smoothly,” said Okayama, who works with the Japanese environment ministry.

The differences will become more pronounced in Osaka.

Australian Trade Minister Bob McMullan told reporters last week in Canberra that his nation is unlikely to sign a trade agreement at Osaka if it excludes agriculture from the forum’s ambitious free trade plan.

On the other hand, Ban Ki Moon, deputy minister for policy planning in South Korea’s foreign ministry says Seoul wants each APEC country to be allowed to name one field of exemption.

Experts point out that Japan, as hosts of the meet, is presently not in a position to iron out these issues.

Tokyo currently represents a flagging leadership — Prime Minister Tomichi Murayama is saddled with political opposition that has kept a tight rein on the government for the past year.

Moreover Japan’s economy has now entered the fifth year of its worst post-war recession. The bursting of the bubble economy in the mid-eighties has hit Japanese banks with heavy debt burdens and trading companies are grappling with huge corporate losses as a result of the strong yen.

On the diplomatic front too, Japan is embroiled in a clash with South Korea, its closest supporter on the issue of agricultural liberalisation.

Relations between the two have been soured following remarks by Japanese cabinet minister Takami Eto that Japan did some good in Korea during its colonial domination of the Korean Peninsula from 1910 to 1945.

Eto, 70, was on Monday forced to resign following a storm of protests from the South Korean government which had threatened to cancel President Kim Young Sam’s summit meeting with Murayama scheduled for Saturday in Osaka.

Japan and the United States are also in midst of solving a contentious issue over the alleged rape of a Japanese girl by American soldiers who live in a U.S. base in Okinawa. An angry Japanese public is demanding the Japan-U.S. Security Treaty, that forms the backbone of Japan’s defence, be reviewed as a result.

“Japan faces a difficult situation,” said Okayama. “Japanese officials are painfully aware of the test they face.”