By Eva Cheng The recent Osaka heads of government summit of the 18 nations in the Asia Pacific Economic Cooperation (APEC) group was widely hailed as a success. While the meeting achieved little of substance, it revealed a major conflict of interest over trade in agricultural products. The meeting was supposed to work out concrete implementation measures for the "free trade" principles agreed to a year ago in Bogor, Indonesia. The US pushed hard throughout the last year for the market opening benefits to be exclusive to APEC members, to formalise members' undertakings and to disallow exemptions. The Osaka declaration hardly touched on these issues. Several parties said after the meeting that APEC undertakings were mere "moral commitments". Demands for exemptions for agricultural products from Japan, China, South Korea and Taiwan, (reportedly the Philippines also) still stand, and the Osaka meeting allowed more time for the parties to iron out their differences. The meeting has delivered a package of vague and largely cosmetic "down payment" market opening measures primarily by China and Japan, and reaffirmed the Bogor principles and timetable for freeing up trade (15 years for the poorer members and 25 for the rich). The implementation measures were deferred to next year's APEC meeting in the Philippines. China's "down payment" measures were:
- to cut tariffs on more than 4000 of its 6000 imported items and to lower the average tariff of all imports from the current 36% to about 22%;
- to remove non-tariff barriers on 170 items; and
- to "deregulate" foreign exchange transactions for foreigners.
Japan agreed to bring forward, by two years, tariff cuts on 697 items which it had already agreed to under the General Agreement on Trade and Tariffs (GATT). The tariff cuts promised by other APEC members were even less specific. Japan, Chile and Australia offered to speed up tariff cuts previously promised under GATT — but did not say by how much and on exactly what items. Agricultural production seems to pose the biggest obstacle to agreement in APEC as it divides the "First World" members (US, Canada, Australia and New Zealand) — all big food producers — from the rest.
Colonial heritage
The colonial experience of all Asian countries — with the exception of Japan and Thailand — irreversibly destroyed their self-sufficiency in food production. Most of their economies were structured to produce a narrow range of cash crops — for example, sugar cane, pineapples and bananas in the Philippines and rubber in Malaysia — or raw material production. This made their economies dependent on the imperialist centres. With the crucial help of capital intensive machinery and biotechnology, strategically critical staple foods have, for some time, been produced in the imperialist economies on a massive scale. This allows efficiencies and yields that are unmatched by traditional farming in the Third World. Moreover, the multinational corporations which control these products are often powerful enough to hold down the prices of such products for long periods so as to outbid competition from mostly small-scale and debt-ridden farmers in various Asian economies. The recent partial industrialisation of the four "Tigers" — South Korea, Taiwan, Hong Kong and Singapore — and to a lesser extent the ASEAN nations has further increased their independence on food imports. Though never formally colonised, Japan has been very conscious of being self-sufficient in food and has put up high barriers to imports. Its rice market was eventually forced open in 1993 by the US-led Uruguay round of GATT. This was part of US pressure to correct its long-standing trade imbalance with Japan, a record US$59 billion in 1993 in Japan's favour. Tokyo cannot afford to turn a deaf ear to opposition to the market opening up from the electorally strong farming sector. The state-run system in China depresses procurement prices for agricultural products to subsidise industrial goods. This has long undermined its food self-sufficiency. Matters have been made worse by a fast growing population and the pro-capitalist reforms since 1978, which have led to the fast disappearance of farmland in favour of more profitable developments. Many Asian nations have used tariffs as well non-tariff measures to protect their partially disabled agricultural sectors. But "free trade" formations such as GATT and APEC — spearheaded by the imperialist economies — are trying to dismantle these protective measures, not only for agriculture but in
all sectors. The establishment of GATT in 1945, targeted manufactured goods. The imperialist countries tried to extend the coverage in 1986 to agriculture, services (to allow big capital to run critical sectors such as telecommunications, media and banking), investment (to allow the free flow of capital to buy up strategic assets or even entire sectors) and intellectual property. Over the last nine years GATT has been converted from a trade agreement into a free-standing institution, the World Trade Organisation (WTO).
Recolonisation
Though formed in 1989, APEC became active only after WTO was formed, serving more and more as the Asian (excluding south Asia) arm in the WTO's global "free trade" push. Both WTO and APEC are powerful vehicles of the imperialist drive to economically recolonise the Third World. The US has particular clout to push this agenda in north and south-east Asia because of the high dependence of this region on the US for military "protection" as well as an export market. The conflict in APEC demonstrates that the food sectors are of great strategic importance to the dependent countries as well as the imperialist exporters. Further dependence on food imports will make the former increasingly vulnerable while failure to expand market efficiently will worsen the existing problems of over-production at the imperialist centres. This is particularly important to the US because of the dramatic decline in many of its industries since the World War II as enormous resources were used to support its massive war machine. European countries' measures to support their farm exports with subsidies to counter the price crash from a world wide oversupply in the 1980s prompted the US to introduce similar "export enhancement" programs in 1985. Washington is currently spending about US$10 billion a year on direct export subsidies. Even though these subsidies run totally against the "free trade" gospel preached by the US, it is extending this export subsidy program in Asia even though it rejects some APEC nations' demands to delay opening their food sectors. With Asia consuming 22% more of US food products last year (worth US$24 billion out of a total US export of US$53 billion) and Canberra's desire to generate A$40 billion a year from "free trade" in the region, more contention can be expected in APEC.