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APEC meeting of senior officials has ended, without an agreement on comprehensive tariff cuts

MONICA ATTARD: A special meeting of senior officials from the 18 APEC nations has wound up in northern Japan with two fundamental issues unresolved. Over the past two days officials overwhelmingly endorsed the zero tariff regime for the Asia-Pacific and the abolition of all export subsidies. But no formal commitments were given. From Sapporo in Japan, John Shovelan reports that finding the necessary APEC consensus is proving more difficult than some delegates thought.

JOHN SHOVELAN: At the end of a two-day session, APEC officials have failed to reach agreement on the two most fundamental issues confronting the 18 nation trade grouping. The principles of whether any sectors should be quarantined from tariff cuts and how to measure a country's progress towards eliminating trade barriers have been shunted off to committees.

Korea, backed by Japan, China and Taiwan, has baulked at the principle of 'comprehensiveness'. Korea has a highly protected agricultural sector. Japan, too, has effective tariffs of 1000 per cent on its rice market and both countries would like to be able to avoid opening up agriculture to free trade. Officials say the arguments in the meeting are a re-run of the debate leading up to the GATT agreement where the north Asian countries opposed opening up agriculture.

As a primary producer, Australia stands to either gain or lose the most. Australian officials say they are still confident, by November when the leaders meet in Osaka, there will be agreement on the principle of comprehensive coverage. They claim the overwhelming majority of APEC nations are also demanding this principle. They argue the Bogor declaration was a deliberately unqualified statement that meant no sectors were to be excluded from slashing protection.

Australia is demanding a clean and straight-forward statement with no loop-holes. The Japanese included in their discussion paper, a principle that was unacceptable to Canberra, calling for flexibility and differential treatment of economic sectors. Officials say the United States has now agreed in principle with the concerted unilateralism approach being pushed by the APEC chair, Japan. Each country would create their own plans to cut protection levels.

The United States initially opposed the idea, seeking a more structured approach with a timetable and clear targets for reduction. Officials now say the US delegation is willing to accept the Japanese plan providing it's stiffened up with 'guidance and discipline'. How much discipline sovereign nations will accept from APEC is another unresolved issue. At the end of the two days of talks, an official said, 'Nothing has yet been signed off, but countries weren't trying to avoid the free trade declaration their leaders laid down last year.' John Shovelan in Sapporo for PM.