KEY POINTS:
Democratic victories in the United States congressional elections last week have already produced a noted change in the international political weather, as evident in the suggestion that Iran and Syria might assist a solution in Iraq, and perhaps soon there might be a White House more amenable to
multilateral efforts to combat climate change. But the same optimism is not yet possible on the third front of recent global failure: the Doha round of trade liberalisation.
The only positive element for trade is that the elections are over. There was no prospect of reviving the Doha round while candidates were campaigning for votes in the world's richest nation. Free trade is too easily painted as a threat to domestic farm products and manufacturing jobs. That is as true of Republican voters as Democrats. There is no reason to expect that a Democrat majority in both houses of Congress will be worse for prospects of trade deals, but no reason to believe they will be better either. On balance, it probably becomes more important to rescue the round before President Bush's negotiating licence from the previous Congress expires in just over six months.
But if that deadline is to be met, the deal must be substantially done by the end of the year. There is no more time to lose and no better opportunity for a resuscitation effort than this weekend when Apec leaders meet in Vietnam.
The association of Asian and Pacific states includes two of the world's largest economies, the US and Japan, and its fastest-growing, China, as well as traders as vigorous as Hong Kong, Singapore and South Korea. It represents a potential trading bloc of fearful dynamism to the rest of the world, and Apec has used that fear to good effect once before when a world trade round was on the brink of failure.
The Presidents and Prime Ministers of member states could do worse than make plans for a regional trade pact in the event that Doha is not revived, reminding the world all the while that a global agreement is by far the best for everyone. Anything less than universal trade rules are bound to exclude some competitive producers, favour some who are less competitive, distort trade patterns and leave everyone a little worse off than they could be.
It would be a sad day if Apec had to make good on its threat but even that would be preferable to the spate of bilateral free trade agreements that have been sprouting in the absence of progress at the World Trade Organisation. The Bush Administration has been doing bilateral trade agreements largely with military allies and countries of strategic significance to it. But if these are motivated by security rather than economic interests they have been nonetheless damaging to the Doha Round.
New Zealand is not on the list of nations to be offered a US free trade agreement, though it continues to plead its case for one. Winston Peters planned to press the point again with Secretary of State Condoleezza Rice at the Apec Foreign Ministers' meeting this week. But he should not give the US representative the impression that this country is more interested in a bilateral arrangement than the global objective.
The Government, in its pursuit of free trade agreements with other Apec members, has managed to keep its eye on the greater prize. In deals with Australia, Singapore, Thailand, Brunei and Chile, this country has insisted on open, equitable, comprehensive terms that can readily be extended to all comers. We should be strenuously promoting an Apec-wide pact on similar terms and doing what we can to see that Apec might again be a catalyst for a revival of Doha's hope.
