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No game changers at Apec summit
Publication Date : 02-10-2013
Asia-Pacific Economic Cooperation (Apec) officials may drive a hard bargain to produce new tangible trade policies as the bloc’s prestigious annual summit kicked off on Tuesday amid perturbing signs in the US economy that, once again, sent jitters across the globe.
For the duration of the concluding senior officials meeting (CSOM), which will run from Oct 1 to 2, officials from the 21 Pacific-rim economies would have to show their commitment to the “Bogor Goals” of free, open trade and investment.
Upshots from the meeting, which will serve as a yardstick for the summit’s outcomes, will be submitted to the ministerial-level forum on Oct. 4 and 5 before being endorsed by Apec leaders on Oct. 7 and 8.
Officials expect no “big surprises” in the attempt to progress on the liberalisation of trade, but are aware of several contentious issues that have the potential to hurt Indonesia and other emerging economies, if not addressed properly during the negotiations.
According to documents obtained by The Jakarta Post, there are five deliverables to be discussed as first priorities of the summit. These include Indonesia’s initiative to include crude palm oil (CPO) and natural rubber on the list of environmental goods subject for liberalisation. But the success rate of such an initiative will be small.
“We’re no longer pushing the issues,” said Foreign Ministry director general for Asia-Pacific and Africa Yuri Thamrin, who is the country’s forum negotiator, on Tuesday.
“We’re taking a different approach. We remained committed to our stance that CPO and rubber are important to help alleviate poverty. There should be a new way for it to be acknowledged. The formula is still under discussion,” said Yuri.
Indonesia, the world’s largest palm oil producer and third largest rubber exporter, has championed the inclusion of the commodities on the list to other members since the first, second and third Apec senior officials meetings, but support has been insufficient.
If the green list comes into place in 2015, Indonesia fears it would become a market flooded by so-called green goods, such as solar panels produced by Apec members that have an upper hand in the business.
Another summit priority, is the US initiative to discuss barriers to trade, which includes opposition against local-content requirements implemented by several Apec members, including Indonesia.
“The local content issue is an itch for us. It’s a matter of softening it now,” said Trade Ministry director general for international trade cooperation Iman Pambagyo.
Indonesia, which holds the rotating Apec chairmanship, has several requirements for businesses to use local products for certain industries, such as oil and gas.
Economist Sri Adiningsih of Gadjah Mada University’s Apec study centre said Indonesia should focus on taking advantage of existing commitments rather than trying to push for a new agenda.
“We have not capitalised on all the commitments made at Apec. There are so many we should finish, such as improving our competitiveness, in order to reap the benefits from the cooperation and leverage our influence,” she said.
While the summit is likely to produce few benefits for domestic interest, it is crucial to help facilitate other Apec priorities such as commitments to help avoid another round of impasse in the upcoming World Trade Organisation (WTO) ministerial conference in December in Bali.
Apec accounts for about 55 per cent of the world’s gross domestic product (GDP), some 44 per cent of global trade and 40 per cent of the world’s population.
But despite the optimism, it remains to be seen whether the US is still interested in the Apec negotiations and will commit to a new level of trade liberalisation as a budget fight in the US Congress led to a shutdown of the US Federal Government on Tuesday, leaving as many as 1 million federal employees idle.
Goldman Sachs estimates a three-week shutdown could cut as much as 0.9 per cent from US GDP this quarter.