Busan versus Europe

The 21 leaders of the Asian-Pacific Economic Community have just concluded their meeting in Busan in South Korea.

Most things seems to have been on the agenda, with APEC going through the same process of deterioation through expansion that we have previously seen with the G7/G8 meetings. If you try with much, you normally succeed with little.

Apart from the obvious discussion on avian flu, the meeting was dominated by the upcoming WTO Ministerial Meeting in Hong Kong December 13 - 18.

The APEC countries together represent nearly 50 % of global trade and close to 60 % of global GDP. The great missing economic and trade power is of course the European Union, which is in fact the world's largest single entity in both these respects.

In its declaration on the trade issues, it was fairly obvious that the leaders in Busan set their sights on the European Union and its agricultural policies:

"We call for breaking the current impasse in agricultural negotiations, in particular in market access, which will unblock other key areas, including non-agricultural products and services. Unless progress is made in this area, we cannot make progress in the Round as a whole. Avoiding or compromising our ambition on this issue would mean that we would lower expectations for the Round as a whole."

To achieve agreements in Busan on this was of course as easy as it gets. But it was also to take the easy route in more general terms.

Trying just to corner the European Union while not making much of an effort to sort out the other complex issues is not necessarily the most constructive approach at this period of time.

The EU has made a substantial offer on agricultural trade, and in fact the developing countries are already exporting more of agricultural products to the Union than to anywhere else. Barriers to agricultural trade with the EU are lower than barriers to trade between the developing countries themselves.

This being said, every negotiation has to be a process in which all of the parties demonstrate flexibility.

It's already unlikely that Hong Kong will bring a break-through in the further trade liberalisation process. But neither is there likely to be a complete break-down. The risks are simply to great.

But it's far more than just agriculture that's on the table. To concentrate on that issue and that issue alone does not seem to be the most constructive thing right now.

Busan versus Europe is not a good signal.
The official website of APEC 2005 KOREA.