Good Intentions in Asia

November 16, 1994

The Asia-Pacific Economic Cooperation group's pledge to create a giant free-trade area by 2020 was a clarion call for action. But nothing more. If this statement of intentions has the desired effect, it will act as a goad and measuring rod for the 18 member nations rimming the Pacific that now produce half the world's economic output.

As such, it is a boost for President Clinton's free-trade policy, a crusade his administration picked up from Presidents Reagan and Bush. But it masks more disputes than it resolves.

Malaysia is explicitly dubious and proclaims itself not bound by the statement. Indonesia, host of the summit at Bogor on Java, embarrasses its friends with brutal repression of the secessionist movement on Timor.

China wants U.S. approval to be a founder-member of the World Trade Organization (WTO) being formed on New Year's Day under the General Agreement on Tariffs and Trade (GATT), but without adhering to WTO's free-market principles in its own trade policies.

The U.S., for its part, has yet to enact the GATT agreement that was a decade in the making. To his credit, the next Speaker of the House, Rep. Newt Gingrich, came out in favor, which makes passage more likely.

Rejection, however, would make President Clinton retroactively look the fool in Bogor, which is no doubt a temptation to many Congress members, but the harm to American interests would be much too high a price for the nation to pay.

In the APEC statement, the more developed nations -- including the U.S., Japan, Canada, Australia and New Zealand -- accept an obligation to end trade barriers 10 years earlier than the others, by 2010. That would be easier to justify were Singapore and South Korea considered developed nations and given the earlier date as well.

The statement of good intentions is worthwhile if it causes member nations to take concrete steps between now and 2020. These should include China's recognition of copyright and patent protection, China and Japan's opening of domestic markets, fairer policies governing foreign investment and harmonized customs procedures and certification standards.

Above all, these steps should include U.S. passage of GATT, reducing trade barriers worldwide, by the outgoing Congress this year.

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