- The Washington Times - Tuesday, November 14, 2000

HONOLULU President Clinton and 20 Pacific Rim leaders begin a two-day economic summit tomorrow whose modest agenda reflects the shrunken ambitions of a grouping once thought to be the world's next powerhouse.

Appropriately, the oil-rich sultanate of Brunei, the smallest member of the Asia Pacific Economic Cooperation (APEC) forum, will host this year's summit, which may end up being more significant for the side meetings Mr. Clinton conducts with Chinese President Jiang Zemin and Russian President Vladimir Putin than for anything achieved during formal sessions on globalization, expanding e-commerce across the Pacific, and software piracy.

"In the last several years, APEC appears to have bogged down," said Edward Lincoln, a senior fellow at the Brookings Institution and a former State Department economic analyst in Tokyo under Ambassador Walter Mondale.

"About the most that they are going to do in a big sense is put in a fairly strong statement advocating hard work to get a new global free-trade round started," he said. "That's not a lot."

Last-minute talks among APEC trade ministers showed divisions in reaching even that fairly modest goal.

After two rewrites, APEC ministers settled on a compromise that would call on the World Trade Organization (WTO) to reach an agreed agenda for a new round of trade talks by 2001 the date the United States originally hoped the round itself would begin.

But developing countries within APEC remain suspicious of U.S. and Western demands to include labor rights and environmental standards in the new round of talks, fearing they will be used to discriminate against lower-wage countries.

Mr. Clinton's subsequent trip to Vietnam this week and the possibility shelved for now that he would make a stop in North Korea have combined to largely overshadow the Brunei get-together. Many within the organization are already looking beyond this week's gathering to the precedent-setting 2001 summit in Beijing.

Mr. Clinton himself initiated the idea of an annual APEC leaders' summit in 1993, and he backed an ambitious plan a year later to establish an Asian-Pacific free-trade zone among the region's advanced economies by 2010. The organization boasted some of the world's fastest-growing economies and an emerging economic powerhouse in China.

But the Asian financial crisis of 1997 and 1998, and rising doubts in Japan and elsewhere about the value of APEC have robbed the organization of much of its momentum, analysts say.

A 1998 proposal to lower tariffs in key market sectors among APEC countries has faltered, and a number of APEC countries have bypassed the organization in seeking bilateral free-trade deals and currency cooperation in smaller groupings. Much of the U.S. focus in recent months has been on getting China and Taiwan into the WTO.

The meeting also comes with the U.S. presidential elections in limbo and Mr. Clinton a lame duck in his last few weeks in power. Administration officials contended last week that the APEC gathering can still prove productive despite the uncertainties over the next U.S. government.

The business of the presidency goes on, the business of America goes on, National Security Adviser Samuel R. Berger said.

U.S. officials also said APEC's apparently modest agenda could pave the way for broader market-opening initiatives that the United States supports but many APEC nations in East Asia still resist.

For example, according to Gene Sperling, Mr. Clinton's national economic adviser, any expansion in e-commerce and sales and marketing conducted over the Internet leads inevitably to discussing how to move the goods and supply the services sold.

"If there is no airline liberalization, then e-commerce between different countries will be meaningless in areas where actual goods have to be transported," Mr. Sperling said.

While the United States and Australia push a broad trade liberalization within APEC, host Brunei has turned to Malaysian Prime Minister Mahathir Mohammed perhaps East Asia's best-known skeptic of U.S. and Western economic influence to voice the concerns of APEC's developing countries at the summit. Brunei officials say they would rather have help from APEC's most advanced members to train their work forces for the new information economy than discuss ambitious trade-opening proposals.

Mr. Mahathir has said he will raise the dangers of globalization at the APEC formal sessions this week.

"Developed countries consider globalization as something good, but it may not be for us," he told reporters last week.

Even more intriguing has been the reluctance of Japan in recent years to sign on to U.S. efforts to push Pacific Rim countries to open their economies to world markets. In addition to balking at the 1998 trade-liberalization accord, Japan has been exploring its own bilateral trade deals with Singapore and South Korea and has also begun talks with South Korea, China and group of Southeast Asian nations over a coalition to defend Asian currencies against attacks from international financial speculators.

Mr. Lincoln of the Brookings Institution said Japan's recent policy may be tactical, designed to prod the United States and the WTO into a new round of global talks. But, he added, it could be something more.

"There has always been a tension between being a Western country or being an Asian country. For the last 50 years, it has been the Western side that has won out, and Japan has pursued a global trade and finance policy," he said.

"In the last year or so, there does seem to be some ascendancy of the more regional Asia crowd in the Japanese government," he added.

Mr. Clinton was scheduled to meet with Japanese Prime Minister Yoshiro Mori privately during the summit as well as with South Korean President Kim Dae-jung. A primary topic of conversation in both meetings will be coordinating policy toward North Korea and how far and fast to go with normalizing U.S.-North Korean relations.

APEC, founded in 1989, comprises Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam.

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