Editorial: Apec summit a tale of lost opportunity

Apec, which stands for Asia-Pacific Economic Co-operation, has missed a prime opportunity to pursue its founding purpose of trade liberalisation. The summit which concluded in Bangkok last night was the first significant gathering of Governments since the collapse of global trade talks in Cancun last month. It should not have been forgotten that the last time Apec came into its own as a regional trade forum the Uruguay round of multilateral negotiations was in a stalemate and at dire risk of failure.

At that time, 10 years ago, Apec was the comparatively new face of a fast-growing region. The world was taking keen interest in Asia's "tiger economies" and the fulcrum of international prosperity was said to be shifting from the Atlantic to the Pacific. The prospect of free trade around the Pacific Rim was sufficiently alarming to those who feared exclusion, notably the European economies, that they found renewed interest in bringing the Uruguay round to a fruitful conclusion.

Similar circumstances prevail now. The Doha round of global negotiations has stalled and is certain to miss its deadline of 2005, if it can be revived at all after Cancun. The Asia-Pacific region, meanwhile, may have lost some lustre in the currency crises of 1997 but it still contains the world's largest and second-largest national economies - the United States and Japan - and the rapidly rising economic power of China. Any gathering that includes these three is always capable of giving new impetus to global progress.

But leadership is crucial and since neither Japan nor China is yet inclined to take the initiative, Apec's momentum depends mainly on the US. Sadly, at least from New Zealand's point of view, trade liberalisation is plainly not a priority for the Bush Government. The President saw the Bangkok summit less as an opportunity to pick up the pieces from Cancun than as one more occasion to remind member countries of the "war on terror". That duly became the thrust of the draft communique published yesterday.

Asia is an important front for any concerted steps against terrorism. Indonesia and the Philippines in particular suffer as much as anywhere from random political violence. And Bali provides a ready example of the economic consequences. If Apec members are serious in their resolve to disarm groups that threaten their prosperity, and crack down on trade in weapons, the Bangkok summit will not have been in vain. But when anti-terrorism dominates a trade gathering to the point that only passing lip service is paid to its primary task, terrorism can claim a certain victory.

It was particularly important to New Zealand that Apec stepped into the vacuum left at Cancun. There are three routes to overcoming national trade barriers - the multilateral, or global, route, the regional route and the route of bilateral deals with trading partners. New Zealand is keen to do such deals with whomever is interested; an invitation from host Thailand is one of the few benefits the Prime Minister can bring back from Bangkok. But the best bilateral free trade agreement, with the world's largest economy, seems no closer.

New Zealand officials did well to ensure that Helen Clark, in her brief "pull-aside" with President Bush, emphasised the diversion of investment this country could suffer if Australia concludes a free trade agreement with the US and none is in prospect for New Zealand. She said the President left her with the impression the door is not closed.

But exclusive trade agreements, as Australia probably will discover, are a poor substitute for wider reductions in trade barriers. Regional agreements are better, provided they are open to the products of non-members on the same terms. Apec operates on that principle and has contributed well to the global cause. This was a moment to contribute again. For want of leadership it was a moment largely missed.