Rough sailing for trans-Pacific trade pact

US President Barack Obama speaks with Russian President Dmitry Medvedev during meetings in Singapore, site of the Asia-Pacific Economic Cooperation (Apec) summit, yesterday. Leaders of the Asia-Pacific region are considering a free-trade zone covering over half the global economy.Photo: AFP

A free-trade zone covering over half the global economy is in the works after an annual Asia-Pacific summit, but the ambitious idea looks likely to remain a pipe dream for years if not decades.
The same issues that have stalled the Doha round of global talks could bog down efforts to achieve the Free Trade Area of the Asia Pacific (FTAAP), along with domestic political resistance, analysts and officials said.
At this weekend's Asia-Pacific Economic Cooperation summit, leaders including US President Barack Obama and China's Hu Jintao pledged to "explore building blocks" of a free market covering all of Apec's 2.6 billion people.
The leaders tasked ministers and officials to report back next year on their consultations about the vast zone, which would stretch from Chile to China via the United States.
Apec's 21 members account for 40 percent of the world's population and 54 percent of its gross domestic product.
One possible starting point for FTAAP is a little-known grouping called the Trans-Pacific Partnership (TPP) involving Brunei, Chile, New Zealand and Singapore, the only existing trade pact linking both sides of the Pacific.
Obama said at the weekend that his administration would be "engaging" with the TPP, giving rise to hopes that Washington would sign on to the group and bring other nations along. Vietnam, Australia and Peru are also interested.
Singapore Prime Minister Lee Hsien Loong said the TPP was "this little nucleus, this little seed, which we hope will in time grow into a significant tree and pillar for free trade and cooperation in the Asia-Pacific".
Australia's government said it would host talks on expanding the small group "early next year", with US trade officials taking part.
Regional officials say other options include harmonising the more than 40 regional and bilateral trade pacts among Apec members, and building on existing cooperation frameworks largely focused on East Asia.
In addition, Japan and Australia are proposing alternative formulas for regional integration, including free trade arrangements.
But Apec members already agreed 15 years ago to liberalise trade and investment among developed economies by 2010 and the rest by 2020, and there is little indication that the 2010 target will be met.
Lee said the landscape may appear "messy" but the idea of an overarching trade pact should be allowed to progress gradually.
Indonesian Trade Minister Mari Pangestu said moving toward a Pacific-wide trade zone would turn Apec -- a loose grouping whose members' commitments are not legally binding -- into a new negotiating forum.
"We have difficult and sensitive issues that we face in the negotiations in Doha, and we will face the same difficulties when we negotiate an FTAAP, so for us the priority is let's solve it and conclude it (Doha) first."
The Doha round of World Trade Organization talks has been in suspended animation due to disputes between developed and developing countries over issues including farm subsidies and market access.
Chia Siow Yue, a senior research fellow with the Singapore Institute of International Affairs, cautioned against unrealistic expectations for the Pacific pact.
"Two years, three years? It's impossible because you are dealing with 21 economies with different levels of development, different cultures, different political regimes," she told AFP.
Chia said it took Asean's 10 members 40 years to achieve the cohesion they have now, which includes an Asean Free Trade Area.
"Can you imagine how long it will take the FTAAP if you have the cultures of the Pacific, cultures of North America, South America and East Asia?" she said. "There's a lot of shadow-boxing.”