Full steam ahead with the Auckland challenge

By Vernon Small

deputy political editor

Asia-Pacific leaders have issued an "Auckland challenge" to the other half of the world to come to the free trade party.

Prime Minister Jenny Shipley yesterday delivered the forum's official declaration in the Auckland Museum, flanked by President Bill Clinton and the other leaders at the summit, stressing the need for further trade and economic reform in Apec's second decade.

One of the key themes of New Zealand's year in the chair was lifting support from a sceptical public for free trade, but the conference has seen clear signs that the battle is yet to be won.

US Trade Representative Charlene Barshefsky outlined the problem with a warning that public opposition was the greatest threat to the world's multilateral trading system.

"Unless that public support is regenerated, I think the World Trade Organisation is going to face tough sledding in the years ahead," she said.

President Clinton also warned of the need to put "a human face" on the global economy.

The final declaration gave a nod towards the importance of a social safety net, and recognised that the income and wealth gap between and within countries was a threat to social stability.

Previous declarations had assumed that a rising tide of growth would lift all economies in the region.

The leaders backed a three-year round of global trade talks, to be launched at the November meeting of the WTO in Seattle, and called for the removal of food export subsidies.

International Trade Minister Lockwood Smith said the commitment to a new global round was the meeting's biggest achievement, but export subsidies were the single biggest trade issue for NZ. While the benefits were some years off, it was important to get the world to put the abolition of the subsidies on the agenda.

Federated Farmers president Alistair Polson agreed there would be no immediate gains from the move to scrap export subsidies. But he said their eventual removal would be a huge boost to New Zealand farmers.

He was less enthusiastic about Apec's decision to back interim sector-by-sector tariff reductions pending a broad-based agreement.

Leaders also approved a shift in focus from issues at the borders - tariffs and customs - to matters beyond national borders. New guidelines for the bond market will also be developed, as will measures to increase the transparency of corporate governance and competition rules.

After a push by Mexico, hard hit by the currency and banking crises, the leaders in talks on the final day agreed to develop a set of banking standards for the region.

In country-to-country talks, New Zealand announced a free trade agreement with Singapore and a scoping study of a similar deal with Chile.

But the meeting's greatest legacy is likely to be two issues that were officially only "in the margins" - the East Timor crisis and the China-US summit that reopened talks between the two super-powers.