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Amy Chew

EIGHTEEN of the world's most powerful economies. Forty per cent of international trade. Two billion people. Gross output of US$12 trillion.

  That is the potent mix that could give rise to the biggest free-trade zone the world has ever seen - one stretching from the Himalayas to the Andes and from New Zealand to Canada's Arctic wastelands.

  Welcome to Jakarta where the 18 Asia-Pacific Economic Co-operation (APEC) countries meet to discuss Vision 2020, a proposal drafted by the APEC Eminent Persons Group (EPG) - a grouping of economists, industry captains and academics to create a free trade zone by the year 2020.

  Although the top leaders, such as US President Bill Clinton, Chinese President Jiang Zemin, Japanese Prime Minister Tomiichi Murayama, and South Korean President Kim Young-sam, will not arrive until the weekend, the haggling, debating and horse-trading will be carried out today and tomorrow in Jakarta.

  This is where the 18 trade ministers will meet to discuss the EPG report.

  The real political showcase - the Leaders Summit - takes place on Tuesday in Bogor - a quiet, rural town about an hour's drive by highway from the Indonesian capital.

  If accepted, the EPG plan will be implemented in phases with tariff-cutting starting in 2000, according to each country's stage of development.

  Developed nations may complete their cuts by 2010, newly industrialised economies by 2015 and the rest by the final deadline of 2020.

  APEC groups Australia, the United States, Canada, Mexico, Japan, China, Hong Kong, Taiwan, South Korea, Indonesia, Brunei, the Philippines, Malaysia, Singapore, Thailand, Papua New Guinea and New Zealand. Chile will become the 18th member at Bogor.

  At their first meeting in Seattle last year, leaders of APEC, set up in 1989 at the initiative of then-Australian prime minister Bob Hawke, said they had formed a loose-knit economic community and a 'voice for the Asia-Pacific in world affairs'.

  This time around, the meeting could pave the way for the institutionalisation of the grouping.

  The proposal is expected to face a rough passage.

  A major APEC sceptic is Malaysian Prime Minister Mahathir Mohamad, who will be at Bogor. He skipped last year's meeting in Seattle, saying Malaysia was concerned APEC was moving too fast.

  Mr Mahathir sees APEC as diminishing his own idea, the proposed East Asian Economic Caucus, grouping major East Asian economies of Japan, China and South Korea with booming Southeast Asia but excluding the United States.

  China, which is battling to re-enter the General Agreement on Tariffs and Trade (GATT) and become a founding member of the World Trade Organisation which replaces it on January 1, is also expected to voice reservations.

  The Chinese are reportedly concerned over the designation of its economy as a developed one.

  In Singapore, on Wednesday, Mr Jiang said APEC members should 'follow the principle of consensus and incremental progress' which some observers interpret to mean that an agreement was unlikely.

  However, on the same day, a compromise was being put together in the Indonesian capital to try to lock in China's backing for a regional free-trade pact at the APEC group leaders' summit next week, diplomatic sources said.

  The plan is based on a single goal of 2020 for all of APEC's 18 members to complete tariff cuts instead of a phased-in introduction, ranging from 2010 for developed countries like the United States, Japan and Australia to 2020 for developing countries like Indonesia and Thailand.

  Besides China, some other APEC members appear to have their own agendas at the biggest and potentially most far-reaching talks to be held in Indonesia since the 1955 Asia-Africa conference in Bandung.

  Fresh from the defeat of the Democrats in elections to the US Congress, Mr Clinton hopes the summit will pave the way for a free trade zone that would be a commercial boon and promote stability in a volatile region.

  South Korean officials said Mr Kim would seek participation by APEC members in a US-led drive to end the long-running dispute over a secretive North Korean nuclear development programme.

  For long-serving President Suharto, a 73-year-old retired general, the summit is a chance for Indonesia to shrug off a nagging image problem, due mainly to human-rights abuses, and emerge on equal terms with leading world economies.

  The Indonesians have left nothing to chance.

  The government has gone to great lengths to ensure security with more than 16,000 soldiers and police in April launching 'Operation Cleansing' to rid Jakarta, home to more than 10 million people, of suspected criminals of all types.

  This week, more than 100 young Indonesians, recruited from universities all over the country, could be seen stationed at every corner of the centre eagerly tending to the delegates.

  Unsuspecting victims of the Indonesian Government's efforts to create an impression are the capital's transvestites, who claimed they were brutally cleared away from their regular central city haunts by security forces as part of a pre-APEC cleansing operation.

  Despite their protests, it will be long after Tuesday, when the APEC leaders emerge from their closed doors to tell the world their decision, that they will be allowed to roam free again.

  President Suharto and his aides know they are standing on the doorstep of a historic agreement that could rewrite the meaning of trade and commerce forever. And more than 3,000 foreign journalists are there to catch every last word and nuance.



All eyes focus on Jakarta showcase