Apec Maintained CredibilityTrade
APEC maintained its credibility last week, Trade Minister Lockwood Smith told the Wellington Chinese Community Forum tonight.
Dr Smith was speaking to the Forum at a function organised by National List MP Pansy Wong in the Government Caucus Room at 7.30 pm tonight.
"Through the 1990s, APEC showed it could work well during the good times - setting goals for trade liberalisation which are so ambitious that APEC has often been described as the biggest trade policy initiative in history," Dr Smith said.
"Last week in Kuala Lumpur is showed it can maintain its commitment to those goals when times aren't so good."
One of APEC's most important goals is the Bogor Declaration which commits developed APEC economies to free and open trade and investment by 2010, and commits developing APEC economies to the same by 2020.
In addition to that, sixteen APEC economies are working on Early Voluntary Sectoral Liberalisation (EVSL) which brings forward those dates for free trade in some sectors. Two of those sectors, forestry and fisheries, are major New Zealand exports.
Dr Smith said the Kuala Lumpur outcome was "heartening and credible" in that it further committed the sixteen participating APEC economies to EVSL, including forestry and fisheries.
"With the Asian Economic Crisis, there was a real risk economies could have gotten cold feet and the whole package could have fallen apart.
"They didn't and it didn't. Economies showed great vision in keeping the package together through agreeing to transfer it to the World Trade Organisation (WTO). All sixteen participating economies remain part of the deal. All nine sectors remain part of the deal. And all participating economies have confirmed their commitment to the tariff end-rates and end-dates agreed to in Kuching earlier in the year. It was the best possible outcome given the economic situation in the region."
The Kuching target end-rates and end-dates for each sector are:
SECTOR END-RATE END-DATE
Forest products Zero 2002-2004
Fish products Zero 2005
Toys Zero 2000-2005
Gems & Jewellery 0-5% 2005
Chemicals Harmonisation 2001-2004
Medical equipment and instruments Zero 2001
Environmental goods & services Zero 2003
Energy Zero 2003-2004
For the ninth sector, telecommunications, a mutual recognition agreement was adopted at Kuching and implementation has already commenced.
APEC economies may begin implementing that package immediately, which Dr Smith said would help to restore business confidence around the Pacific Rim.
Even more importantly to New Zealand, Dr Smith said the package would now go to the WTO to become a binding, rules-based agreement, with wider participation. But he said there was some misunderstanding of what that meant.
"It does not mean that every WTO member will have a veto over the package being implemented in APEC economies," he said. "It means that other WTO members will have the option of joining an agreement which will then become part of international law."
APEC consists of 21 economies: Australia; Brunei Darussalam; Canada; Chile; People's Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; Republic of the Philippines; Russia; Singapore; Chinese Taipei; Thailand; United States; Viet Nam.
All APEC economies are participating in EVSL except for Chile and Mexico, and the three new members Peru, Russia and Viet Nam.