APEC plan maps out hard-to-swallow demands for Japan

Kyodo News, 16 October 1998

TOKYO, Oct. 16 (Kyodo)—Japan looks set to face pressure to liberalize trade at the Asia-Pacific Economic Cooperation (APEC) summit scheduled for Nov. 17-18 in Kuala Lumpur, a draft document obtained Friday shows.

The draft, prepared in working-level consultations ahead of the APEC summit and obtained by Kyodo News, sets a target of removing tariffs on fishery products by 2005, a move to which Japan has expressed strong opposition.

In forestry products, another area Japan has shown reluctance to liberalize, the document calls for the elimination of tariffs on paper and pulp in 2000 and on timber in 2002.

The draft presents targets for eight of nine areas covered by APEC's so-called early voluntary sector liberalization plan—environmental products and services, energy, fisheries, forestry, toys, jewelry, medical goods, and chemical products. Telecommunications is the ninth area.

Early voluntary liberalization is expected to be high on the agenda at these meetings.

Japanese officials say Japan cannot accommodate early liberalization in fishery and forestry products because of political sensitivity, namely strong opposition from competing domestic industries.

Japan would also like to put off discussions on fishery and forestry products until the next round of negotiations of the **World Trade Organization** (WTO). The WTO will be starting talks on agricultural trade in 2000.

Exporters of fishery and forestry products such as the United States, however, are arguing for a one-package approach, calling for pledges for early liberalization in all the eight areas.

Japan at this moment is isolated, a Japanese government official said.

The draft also calls for tougher demands on industrialized nations than on emerging economies in reducing tariff rates for certain products as well as allowing for some flexibility, such as an extension of the target year to achieve liberalization.

The draft cites a reduction in the tariff rate on jewelry to 5 % or lower by 2005.

For those chemical products with a tariff rate less than 10 %, the rate should be reduced to zero by 2001. If the rate is higher than 10%, it should be reduced to 5% or lower by 2004, the document says.

The document projects the elimination of tariffs on toys by 2005, on environmental goods by 2003, on medical goods by 2001 and on energy by July 2004.

In these areas, Japan has already shown willingness to either remove or reduce tariffs.

The APEC groups Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, South Korea, Taiwan, Thailand and the U.S.

Russia, Peru and Vietnam will become APEC members at the November meetings.