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Philip Bowring: Beyond that distraction in Pusan

Philip Bowring International Herald Tribune

SUNDAY, NOVEMBER 20, 2005
HONG KONG An excess of high-profile, low-output summitry risks diverting energies from real issues to photo opportunities.
 
Recent days have seen the much publicized meeting of APEC, the Asia-Pacific Economic Cooperation group, in Pusan, South Korea, attended by George W. Bush and President Hu Jintao of China, and the largely ignored meeting of the South Asian Association for Regional Cooperation in Dhaka. In four weeks, half these leaders will be in Kuala Lumpur for the 16-member East Asian Summit, which now includes India , Australia and New Zealand. Before that is the first Asean-Russia meeting, a consolation prize for President Vladimir Putin for not being asked to the bigger gathering.
 
None of the above leaders, however, will be at the far more important gathering - the World Trade Organization's ministerial meeting in Hong Kong next month. The crucial decision on world trade issues that need to be made at the highest level will be negotiated instead by trade ministers, often lacking strong negotiating mandates and mostly figures of moderate political weight.
 
Yet the latest summits illustrate just why the success of the WTO meeting is so important to all concerned. APEC was able to make a plea for WTO progress and a well-deserved and none-too-veiled admonishment of Europe for its obstruction of progress on the key issue of agriculture. But the disparate interests represented by APEC were unable to offer either proposals which could contribute to a breakthrough, or threat to retaliate if Europe did not budge. Indeed the Korean farmer demonstrators were a reminder that the positions of Korea and Japan on farm trade are also significant obstacles to WTO progress and rule out a common APEC stance.
 
The APEC meeting also showed why East Asia finds it so difficult to find the political common ground necessary for regionwide trade agreements along the lines of those in North America and Europe. China and Korea both took the opportunity to massage nationalism by attacking Prime Minister Junichiro Koizumi of Japan for his shrine visits. While APEC may provide an opportunity for bilateral talks, its achievements in Pusan were scant - some rote statements about cooperation on that now perennial issue, terrorism, and the new one, bird flu, on which no one can disagree.
 
While broad-based East Asian economic cooperation makes slow progress, bilateral free trade agreements continue to sprout. APEC itself, with its so-called "open architecture" approach to trade liberalization, gives an imprimatur to these deals, which are slowly but surely undermining the fundamental principle of the WTO - nondiscrimination. The bilateral agreements are driven more by political interests - mainly those of the United States and China - than by economics. In theory they might stimulate broader trade liberalization, but in practice create confusion and new categories of special interests.
 
Over in Dhaka the previous week, the South Asian Association for Regional Cooperation was no more successful. India-Pakistan rapprochement should have been a good platform from which this postponed meeting could make progress. But all the smaller members fret about what they see as India's overbearing attitudes. Normally diplomatic, Prime Minister Manmohan Singh of India ruffled feathers by talking about the danger of "failed states," apparently a reference to Nepal and Bangladesh rather than to the failed states within India's borders.
 
Retribution for India came with the demand from the smaller members that in return for admitting Afghanistan, an "observer" category would be created that would allow China (and Japan) to attend - a sure way of diluting Indian influence.
 
SAARC has been making some progress toward negotiating a free trade area. But the obstacles are many, including India's pursuit of bilateral deals. Regional trade in South Asia is minimal, mostly for political reasons, and cooperation on vital issues like water and transport are also bedeviled by politics. Thus, hopes that the region continue the rapid progress it has made - from a low base - toward being a global player will depend more on what happens to the WTO than to SAARCs snail's progress.
 
If there is a silver lining in Pusan and Dhaka, it must surely be the realization by China and India of the overriding importance of WTO if their own outward-oriented growth is to continue. Both could best show up the European Union's obstructionism and their own commitment to the WTO by being prepared to offer greater trade liberalization in other areas, like services and manufactures. Asia needs to stop talking and offer leadership.
 
 
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