APEC leaders push free trade

Japan will start free-trade talks with South Korea, and the US will negotiate with Thailand as the leaders of 21 Asia-Pacific nations meeting in Bangkok next week try to overcome the collapse of world trade talks in Mexico.

These are among the free-trade deals likely to be discussed during the APEC forum in the Thai capital starting Oct. 20.

Leaders of APEC economies, headed by US President George W. Bush, Japanese Prime Minister Junichiro Koizumi and Chinese President Hu Jintao (胡錦濤), preside over almost half of the US$8 trillion worth of annual global trade.

The US, Japan and other major economies have switched their focus to two-way deals after WTO talks aimed at slashing tariffs and trade barriers collapsed last month in Cancun, Mexico, because of objections by poorer nations.

Free trade around the world could add as much as US$500 billion a year to the global economy, the WTO estimates.

"With the WTO situation so uncertain, organizations like APEC offer the possibility for regional trade integration," said Robert Kapp, president of the US-China Business Council, which represents Boeing Co, Motorola Inc and more than 200 other companies doing business in China.

US companies are seeking a bigger share of the Asia-Pacific market, the world's fastest-growing region.

New York Life Insurance Co, the biggest US mutual life insurer, wants to sell insurance in Vietnam and India. FedEx Corp wants to expand landing rights and ease customs rules across Asia, and Procter & Gamble Co wants standardized label rules on everything from Tide detergent to Crest toothpaste.

Bush's efforts to open markets in Asia for US companies may be sidetracked by a dispute with China over Washington's calls for an end to the yuan's peg to the dollar.

That currency policy, which US officials say fueled a record US$103 billion trade deficit with China last year, may dominate the talks in Bangkok, said Robert Hormats, vice chairman of Goldman Sachs International, and other analysts.

Bush will discuss exchange rates with Japanese and Chinese leaders during his six-day trip to Asia, reinforcing his belief that the marketplace should determine the value of currencies, an administration official, speaking on the condition of anonymity, told reporters traveling with the US president to Japan aboard Air Force One.

Other free-trade deals being negotiated by APEC nations include ones between the US and Australia, and between Australia and China. New Zealand, Singapore and Chile are negotiating a three-way deal, and the 10-member ASEAN is in talks with Japan, South Korea and China.

"As the oxygen goes out of the WTO, the wind will get in the sails of more regionalism and bilateral free trade deals," Mike Moore, former director-general of the Geneva-based WTO, said in an interview from Switzerland.

"The recent setback in Cancun of the global trade talks makes it all the more important that we continue pressing to open markets bilaterally," US Trade Representative Robert Zoellick said in a statement this month.

Zoellick will attend the APEC meeting in Bangkok.