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Trade issues to test solidarity
Mark Hollands for CNN
(CNN) -- Divisive issues over trade will present a significant test of political and economic solidarity when the 21 members of the Asia-Pacific Economic Co-Operation forum meet in Bangkok, Thailand, from October 19-21. An acrimonious breakdown in World Trade Organisation (WTO) talks last month has become the awkward backdrop to the meeting being hosted by the Thai Prime Minister, Thaksin Shinawatra, who recently gave a speech entitled "APEC as a force for unity in a world of differences". The WTO talks in Cancun, Mexico, collapsed after emerging economies walked out over demands that they negotiate to open up their markets to rich countries – an agenda aggressively pursued by the European Union. The EU and the United States wanted to include investment and competition and procurement policies -- the so-called Singapore issues -- on the agenda of the current Doha Round, which must end by January 2005. Negotiators also battled fiercely over agriculture subsidies, some of which are up to 400 percent of the value of the produce. A number of of the aggrieved emerging economies are represented at APEC, including Chile, China, Malaysia, Indonesia and Thailand. Pressure on APEC to make some progress on the reduction of tariffs and market access will be intense as the argument cuts to the heart of the organization's reason to exist. Its mission, adopted in 1994, is to create free trade between its mature economies, including the US, Australia and Singapore, by 2010 and its emerging economies, such as China and Chile, by 2020. New Zealand, one of many countries frustrated by continuing agriculture subsidies in the US and EU, has warned that APEC leaders need to work together to get the WTO talks back on track. Its Prime Minister, Helen Clark, said the WTO impasse needed to be a "stimulus" for the APEC talks, expressing the fear that mature economies would miss their 2010 free-trade deadline. Failure of APEC to confront this issue would throw serious doubts on its legitimacy as a global organization of significance, according to some academics in the region. Academic Stephanie Fahey, director of the University of Sydney's Research Institute for Asia and the Pacific, said the United States would have to "take this meeting more seriously than those previously". "Their economies are in so much trouble," said Dr Fahey. "The recoveries we read about are not yet entrenched. And there are real dangers for the developed economies." Christopher Findlay, of the ANU's Asia Pacific School of Economics and Government, said "we are now facing the really hard stuff". "There are lots of points of contention on trade," he said. "Some of the mature economies want investment and competition issues put on the agenda. Another contingent wants to talk about protection and anti-dumping policies, such as those that relate to steel imports, batteries or plastic products, which would throw the focus on China." Dr Findlay said it was essential APEC, at all ministerial levels, put a "big focus on market access and the ramifications of the WTO talks". He added: "APEC is not delivering on the economic and technical co-operation that had been envisaged. Not everyone wants to overhaul their economy, especially if there is some pain associated with it." One of the sideline issues will be demands to provide access to some of the construction projects planned for the 2008 Olympics in Beijing. About $37 billion has been set aside for new stadiums and facilities, such as improved roads and rail links. It is expected officials from the United States, South Korea and Japan will be particularly keen to put access to these projects on the agenda, fearing the Chinese Government will issue contracts predominantly to domestic-based companies.
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