Apec draft: No tariff barriers until 2013

Yokohama — Pacific Rim leaders meeting in Japan this weekend will pledge not to introduce new trade and investment barriers until 2013, according to a draft Apec statement.

Ministers from the Asia Pacific Economic Cooperation forum also took a stand against the risk of rising protectionism, agreeing Wednesday to extend the “standstill” on barriers first forged in 2008, Japanese officials said.

There has been widespread concern that turbulence in currency markets has increased the risk of a return to protectionism, as countries may throw up trade walls to protect their industries from floods of cheap imports.

In a draft statement dated Nov. 3, the Apec leaders say they would “continue to resist protectionism, and agreed to extend our commitment on standstill made in 2008 to the end of 2013.”

They said they would “refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing World Trade Organization inconsistent measures in all areas, including those that stimulate exports.”

In a separate draft statement, the Apec leaders implicitly conceded they had not met goals adopted in 1994 in Bogor, Indonesia, where they pledged their more advanced members would achieve free and open trade and investment by 2010.

They said the pursuit of the Bogor goals had “delivered significant beneficial outcomes for the region,” with average tariffs for the more developed economies falling from 8.2 percent to 5.4 percent by 2008.

But they admitted that progress “has not been uniform across sectors” with tariffs on clothing, agricultural products and textiles remaining high, and more movement needed on non-tariff barriers.

“It is a fair statement to say that the 2010 economies have some way to go,” they said in the draft obtained by AFP. “Apec’s challenge in pursuing free and open trade and investment continues.”

Think tank the Pacific Economic Cooperation Council said in its annual state-of-the-region report released Wednesday that to sustain its rebound from the global crisis, Asia must safeguard gains made in trade liberalisation.

Report coordinator Yuen Pau Woo said there was “a need to restore the momentum on trade liberalization, or at the very least prevent a backsliding into protectionism, a concern that has gained some urgency recently.”

The WTO said in a recent report that a “dangerous cocktail of imbalances” including trade, disorderly currency movements and “stubbornly high” unemployment must be tackled through international cooperation.

“The last few months have seen a dangerous increase in protectionist pressures generated by global imbalances at a time when the political consensus in favor of open trade and investment is already under strain,” it said.

“Higher risks for the world economy are being generated by turbulence in currency markets,” as well as by government decisions “that some may perceive as a deliberate pursuit of an exchange rate induced comparative advantage.”

A Japanese trade ministry official said many of the Apec trade and foreign ministers who met Wednesday “said they should extend the commitment on not taking new protectionist measures by three years” to 2013.

“It’s in effect an agreement by ministers on this point,” he told reporters.

Song Seng Wun, a Singapore-based regional economist with CIMB bank, warned against the risk of tit-for-tat measures being taken if the global mood soured on trade liberalization.

He cited the example of the United States this year imposing tariffs on paper products, steel and some types of tires from China. Beijing then slapped tariffs on its chicken imports from the US.

“The danger is for other economies to slacken or backslide on their tariff lowering commitment timetables or raise tariffs outright which would reverse the trade liberalization momentum.” AFP