• Lockwood Smith

A study (1) of the implications of the APEC Business Advisory Council's (ABAC) APEC Food System proposal shows that APEC Trade Ministers and Leaders were right to endorse its recommendations at the recent meetings in Auckland, according to Trade Minister Lockwood Smith.

"The study shows that implementation of the APEC Food System has the potential to add between US$55 and US$112 billion to consumers' spending power in the APEC region by 2005.

"The real strength of the APEC Food System proposal lies in its balance. While it advocates trade liberalisation and facilitation measures, it also involves programmes to develop rural infrastructure and disseminate technological advances.

"The study finds that the huge potential gains are dependent on member economies overcoming the political obstacles to agricultural trade liberalisation, including the removal of tariffs and the elimination of export subsidies and production subsidies.

"Although the report notes that these policies have not proved popular among Governments, APEC Leaders' agreement to support the abolition of agricultural export subsidies at the Seattle WTO Ministerial shows that these political challenges can be overcome.

"The study also concludes that food trade liberalisation without the accompanying capacity-building measures could corrode rural incomes in some economies, but that a redistribution of the overall gains through rural infrastructure and education programmes would offset such losses, and significantly improve rural incomes.

"This report provides welcome evidence of the huge gains from liberalising trade in food across the APEC region through a balanced approach including trade liberalisation, facilitation and economic and technical cooperation.

"The gains of liberalising trade in food would be even greater if other WTO members who fall outside of the APEC foot-print, such as the European Union, followed suit. The upcoming WTO round delivers a unique opportunity to achieve real progress on reducing barriers to trade in food globally," Dr Smith concluded.

(1) "An APEC Food System: Implications for Welfare and Income Distribution by 2005", by John Gilbert and Robert Scollay of the APEC Study Center of New Zealand and Thomas Wahl of the Washington State University APEC Study Center.