Clinton urges Asia to stay on reform path

PUBLISHED : Monday, 13 September, 1999, 12:00am
UPDATED : Monday, 13 September, 1999, 12:00am

United States President Bill Clinton has warned of a worrying, growing sense of complacency towards reforming the global financial infrastructure because of the earlier than expected Asian economic recovery.

'I think that's a mistake,' said Mr Clinton, giving a spirited rallying call to international business and government leaders yesterday in Auckland for the reform and restructuring process to go on.

The need to further strengthen markets will be one of the core themes of a joint declaration expected to be endorsed by leaders of the 21-member Asia-Pacific Economic Co-operation forum today.

In a keynote speech on the sidelines of the Apec summit, Mr Clinton said the objective should not just be to recover from this crisis, but ensure Asia never has to suffer such a dramatic economic and financial collapse again.

'We've been seeking new ways to help the international system moderate the cycle of boom and bust in much the way that individual economies have learned to do so since the Great Depression,' he said, explaining the work of the international financial stability forum on which Hong Kong sits.

'I just want to urge you all to keep this progress on course,' he said.

An early draft of the Apec leaders' joint communique calls for more open, transparent and well-governed markets, greater transparency and predictability in corporate and public sector governance, lower compliance costs and enhanced competition.

'Strong financial systems are fundamental to achieving robust, open and growing economies,' the draft says.

'We are encouraged by the progress to strengthen the international financial system and we support on-going efforts to improve crisis prevention and crisis resolution, and to enhance counter-party and other forms of risk management and improved transparency of highly leveraged institutions,' says the statement leaders are expected to sign today.

This year's Apec summit has provided regional leaders and ministers with a timely opportunity to prepare a joint stance to take into the forthcoming next round of global trade negotiations under the World Trade Organisation, due to be launched in Seattle on November 30.

On Friday, Apec's trade ministers - whose economies represent about half the world output - broadly agreed what kind of form and direction they wanted the WTO negotiations to take.

Mr Clinton said: 'When we get to Seattle, we should then try to make Apec's agenda the world's agenda.' Apec countries want a maximum three years cap placed on negotiations to prevent foot dragging.

They also want negotiations to be approached as a single package, as opposed to tackling different sectors on a piecemeal basis as the US originally demanded contrary to Japanese and other protests.

Apec members want the WTO negotiations to broad-based and include comprehensive negotiations on industrial tariffs, in addition to already mandated discussions on services and agriculture.

This would include a deal on removing export food subsidies and unjustifiable prohibitions and restrictions scrapped - something the European Union, with its many farm subsidies, may find hard to stomach.

To keep the information superhighway free of tolls, Apec members will seek a permanent moratorium on electronic-commerce duties within WTO. Plus, an agreement to improve openness in government procurement.

Within Apec itself, leaders are expected to agree to implement eight voluntary steps towards more competitive air services, and commission a study to identify further possible measures towards air services liberalisation.

Apec's own liberalisation process has been clearly overshadowed by the WTO during the Auckland summit and a host of political matters.

Business leaders met with Apec national leaders yesterday to express their concerns that they should not forget the looming deadline to fulfil their 1994 Bogor pledge to completely free up their respective economies to trade and investment to fellow members.

Developed economies within Apec agreed a 2010 deadline, and developing economies 2020.

Philip Burdon, chairman of the Apec Business Advisory Council, said he had received assurances from leaders they saw Apec running in parallel with the WTO agenda, not simply as a lobby group to the WTO.

Mr Burdon said: 'It is still the ambition of the Apec leaders to continue to respect the Bogor goals.' Hong Kong Trade Development Council chairman Victor Fung said: 'One of the things of particular focus for next year is to see how developed economies' individual action plans are fairing, given that we will only be 10 years away from 2010 when they have to reach those goals.'