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United States: future of world trade as represented by GATT and APEC will be affected by the decision on NAFTA

PETER THOMPSON: With the countdown under way for the vote on the NAFTA agreement, the future of Bill Clinton's presidency and, indeed, of world trade is hanging in the balance. Immediately after the vote tomorrow, our time, President Clinton is to cross the American continent to host the first ever summit of leaders from the Asia-Pacific Economic forum - APEC - in Seattle. As Matt Peacock reports from the scene of the summit in the city below Mt Rainier, a no vote for NAFTA would change not only the role of APEC in world trade, but may also jeopardise the long awaited conclusion to the General Agreement on Tariffs and Trade.

MATT PEACOCK: With one day to go, it will be a few votes which will send the world a message: is the United States turning inwards or is it full steam ahead for world trade liberalisation? If President Clinton loses, then he'll arrive at this first ever meeting of the Asian Pacific leaders as a lame duck President, unable to be taken seriously in the trade negotiations with Japan or the up and coming economic giant of China, and it may also cripple the chances for a successful conclusion to the Uruguay Round of GATT negotiations. And so the NAFTA vote is being watched carefully by the 15 APEC nations whose Ministers are gathering here, and despite some Asian reservations, both the United States and Australia are signalling to Europe that if GATT does collapse in any case, then it's organisations like APEC which will move to take its place.

Australia's Trade Minister, Peter Cook, still thinks though that Bill Clinton will win the day.

PETER COOK: I think Bill Clinton will probably scrape in and win the NAFTA vote, but as President of the largest economy in the world and as someone fairly early in his term, it would be a terrible blow to him not to win it, but it wouldn't be necessarily a terrible blow to APEC because the momentum for APEC is there. One has to understand that what we're doing is recognising where the trade is going and the trade is going into this region now. We're trying to develop a framework which will facilitate that. The presence of the United States has highlighted the importance of this. The personal role of President Clinton has given that an extra cache - all that is true. A domestic defeat won't necessarily impede him too much in terms of his international position, although one would not want to see that outcome.

MATT PEACOCK: It's only a few weeks away till the GATT round either makes or breaks. Would APEC become a substitute of sorts?

PETER COOK: You're right. We've only got less than 30 days now for the GATT negotiations to be completed, but if NAFTA is off the slate as far as the US is concerned, Maastricht is to one side in Europe, if the electoral reform legislation in Japan that Prime Minister Hosokawa has a mandate for is also passed by the Diet, by the 17th, we've got a clear run then at resolving the Uruguay Round with no major distractions. And I think since we've been at this seven years, our minds can be concentrated in that short time span to summon the political will to overcome the thorny issues which we know exist.

MATT PEACOCK: Regardless of the GATT outcome, it's the Pacific Rim which is becoming the hub of world trade and there's now a scramble to join APEC, with Papua New Guinea and Mexico likely to join this conference; but Chile, despite its efforts, to be excluded. The US says it doesn't mind, the ASEAN nations say yes, but surprisingly Australia is blocking its entry for now - something that Peter Cook coyly confirms.

PETER COOK: APEC is at a manageable size. We should concentrate on developing, evolving and nurturing APEC to grow it into something more significant. But we'll be part of a consensus. There's a consensus for Papua New Guinea; there's a consensus for Mexico; unfortunately, there's no consensus for Chile at this point.

MATT PEACOCK: Overhanging the specific APEC objectives, other concerns loom large in the region. China and Indonesia, in particular, resent the Clinton Administration's strengthening concerns about human rights. Japan still maintains its huge surplus and import barriers, and all are nervous about North Korea's nuclear potential. But even if APEC eminent persons' recommendations that it becomes a free trade community doesn't happen for now, Mr Cook sees substantial progress out of this week's meeting.

PETER THOMPSON: Matt Peacock in Seattle.