Wednesday, November 16, 2005

Fran O'Sullivan: All eyes on Peters at Apec build-up

Newbie Foreign Affairs Minister Winston Peters is already stealing the Kiwi media limelight at his debut Apec outing in Korea.

Labour's Phil Goff - who will take up the critical trade negotiations portfolio from his Cabinet colleague Jim Sutton - has lost a significant media profile this time around to his replacement in foreign affairs.

Despite Goff's proposal to form a cross-party coalition with National on vital trade issues - in some respects to overcome official concerns that Peters will jeopardise Chinese free trade talks by throwing a bucket of rhetorical invective at them - it is Peters who is getting the public play so far as he embarks on a whirlwind series of bilateral meetings to introduce himself to his Asia and Pacific counterparts.

Even Sutton - who will leave the Cabinet after a major global tradefest next month - was yesterday sanguine about the arrival of a new kid on their block.

But he was also concerned enough to make sure the real game in town as far as New Zealand is concerned does not get buried by the Peters' hoopla.

"It's Mexican standoff on top of Mexican standoff" was his response to initial soundings in the trade ministers' fraternity.

The big multilateral game at this talkfest is the looming stalemate in the World Trade Organisation's Doha development round.

Already the WTO's Director-General, Pascal Lamy, is playing down expectations for the Hong Kong ministerial meeting next month after the European Union dug its heels in over United States-led demands for greater sacrifices by Europe's subsidy-enriched farmers, who get double the protection of their American counterparts.

The 21 economies from Asia, Oceania, Latin America and North America include most of New Zealand's major trade and economic partners, with that one vital omission.

The European Union.

Sutton, who despite being pushed from the Cabinet by Prime Minister Helen Clark, is still strongly enough rated by his peers to be invited into the WTO ministers' inner sanctum, was not optimistic about the chances of a grunty and ambitious statement emerging from the leaders on Saturday.

He was to take part in yet another inner-circle meeting yesterday before the major trade ministers' retreat to try to forge a strategy with other like-minded ministers to persuade Apec agricultural protectionist countries such as South Korea and Japan to liberalise protected sectors.

A senior officials' text circulated this week made the right noises but basically committed the leaders to little but empty rhetoric.

Instead, the huge bureaucracy which has sprung up around Apec is talking up issues such as capacity building and ecotech policies which do not require political leaders to suffer any political pain by stripping away protection from elite sectors and possibly face retaliation.

But the central focus of Apec in the first place is trade liberalisation - the ambitious goals of free and open trade and investment among member nations by 2010 for developed countries and 2020 for developing nations - which often gets overlooked in the efforts by officials to justify their budgets.

Already the Apec Business Advisory Council is underwhelmed by the lack of movement on the Doha Round and is threatening to kick up rough when it meets the leaders on Saturday.

Last year Abac put on ice its own proposal for a Free Trade Area of the Asia Pacific (FTAAP) in favour of making progress on the broader multilateral round.

But another year has gone by and little has happened.

In reality, the 23 Asia Pacific nations will not make much progress beyond mere rhetoric unless they can get their own protectionist members to show some leadership to the Europeans.

Abac is already suggesting it may be time to dust off the FTAAP proposal - but Sutton claims the problems are really no different from those facing the WTO.

Any deal will still involve sacrifices by protectionist countries, just different ones.

The problem is that the trade ministers are now starting to muse about fallback positions in case the Doha deal ultimately lacks substance or, worse, fails.

One potential is to scale down the WTO and form a mirror, but smaller organisation, for those countries that want to move faster and further to liberalise their markets.

Another option is to set up a new constitution for a different governance where decisions are forged by majority - or a UN Security Council type overlord - rather than by consensus among 149 nations.

It is this mind-boggling stuff that makes the role of foreign ministers seem more glamorous.

Even before Peters swept into town - dogged by a tiny media entourage - he went public in the South China Morning Post on his stance towards Asia and Asians.

The sentiment was vintage Peters: his calls to restrict Asian immigration would not be an issue when he met up with Apec foreign ministers who had far more aggressive policies.

But there were a few embarrassing faux pas, which the Post pointed out, such as not knowing the name of Lee Kwan Yew's successor as Prime Minister of Singapore, or the name of Tung Chee Hwa, first chief executive of the special autonomous region of Hong Kong.

In the grand scheme of things it was no big deal. But the Post 's delight in ridiculing its subject shows that Peters will have to build credibility in Asian circles rather than take it for granted.

Peters' dance card in Pusan is full as he juggles bilateral meetings with experienced foreign ministers such as Australia's Alexander Downer and China's Li Zhaoxing.

Downer has privately ridiculed Peters in the past. But he is a consummate professional.

Li - a diplomat with a penchant for writing poetry - is well up with New Zealand issues. But Peters is unlikely to get much joy in the short-term as he tries to bolster Chinese student numbers in New Zealand once more.

The Chinese have diversified their own education industry and are getting into the export education game themselves.

To make any movement on this score some careful strategising will be required.

It's just possible that the train has left the station - for good.

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