Clark questions Apec's Asia-Pacific relevance

By JOHN ARMSTRONG political editor

The Prime Minister has questioned Apec's effectiveness in breaking down barriers to free trade, saying ahead of this year's summit that the Pacific Rim grouping has "run out of some steam."

The timing of her remarks will cause consternation among officials, some of whom predict that next week's meeting in Brunei will deliver a strong call for the resumption of stalled trade talks through the World Trade Organisation.

But Helen Clark's comments reflect the growing view that the 11-year-old organisation is grappling to stay relevant, despite the firm free-trade sentiments expressed in last year's Auckland communiqué.

Apec analysts argue that the 21-member group is increasingly overshadowed by the work of the World Trade Organisation and mushrooming regional trade blocs in Europe and the Americas.

Helen Clark noted yesterday that some Asia-Pacific countries were now working in smaller groups to forge bilateral or trilateral free-trade pacts to break down tariff and investment barriers, rather than becoming "paralysed" by stalled across-the-globe multilateral negotiations.

She cited the New Zealand-Singapore free-trade agreement, endorsed by Parliament this week, and attempts at similar deals with Hong Kong and Chile.

"We felt Apec had run out of some steam. Perhaps some countries should get down and work in smaller groupings to show what could be done if you put your mind to it," she told the Institute of Directors in Wellington.

In 1994, Apec leaders agreed to establish regional free trade and investment by 2010 for developed member economies and 2020 for developing ones.

But Helen Clark yesterday referred to those targets as "giddy expectations" and said there was frustration at the lack of progress.

She raised diplomatic eyebrows in June when she predicted Apec "won't get any steam this year" because the tiny oil-rich sultanate of Brunei was too small to provide leadership and make progress.

However, yesterday she described the draft communiqué to be signed off by leaders next Thursday as "better balanced."

She said the last National Government had single-mindedly focused on one aspect of Apec's agenda - trade liberalisation - but this year's communiqué reflected Labour's desire for more emphasis on dealing with disparities in wealth and knowledge, skill development and social safety nets.

"It feeds into that broader debate about globalisation. Is everyone going to benefit from this or is globalisation just going to be a contributor to growing divides within societies and internationally?"