APEC: What's in it for them? - Hawaii News Now - KGMB and KHNL

APEC: What's in it for them?

By Howard Dicus

HONOLULU (HawaiiNewsNow) - We already know what we in Hawaii want from APEC: a heightened world awareness that Hawaii is a swell place to summit, and lots of tax revenue from hotel room sales. But what do the attendees want? What are their objectives?

What's in it for them?

Each country comes with its own interests at heart, and in some cases their interests are at odds with those of fellow APEC members. About two dozen major corporate CEOs are also coming, each looking for new business.

U.S. government and business leaders want more opportunity to sell U.S. goods and services in nations around the Pacific Rim, because in a slow U.S. economy it's overseas business that's keeping American companies prosperous.

"It's time for an aggressive trade agenda," said Tom Donahue, president of the U.S. Chamber of Commerce, who is here in Honolulu for the summit, to a sympathetic audience in Washington, D.C., last week.

The United States wants as many countries as possible to join something called the TPP. It stands for Trans-Pacific Partnership, and it's a framework for freer trade among the nations that sign on to it.

Korea, Colombia and Panama have done so. Australia, New Zealand, Singapore, Malaysia, Brunei, Vietnam, Peru and Chile are also TPP partner nations, and all held talks with U.S. officials at a conference in Lima, Peru, the week before last.

"We have great momentum heading into another busy season for trade," says U.S. Trade Representative Ron Kirk, who is also here for the APEC meetings.

Great momentum sounds great, but the great challenge is that many countries still provide tax breaks or other financial assistance to their home-grown industries, so they can undercut imports from America or anywhere else.

U.S. officials are also concerned about unsafe or unhealthy products made in other countries and sold to Americans, and Kirk says for the first time they are pushing for trade agreements that include "good regulatory practices."

The Washington bureau of China's Xinhua news agency reported over the weekend that the White House would focus on "regulatory cooperation and convergence" and quoted Kirk as saying, "We really want meaningful outcomes."

China itself is girded for fresh pressure to make its manufacturers produce safer, healthier products, something its own domestic consumers are also beginning to ask for.

Japan and China

China and Japan may hope to use APEC as a convenient opportunity for talks on the sidelines about the issues they jointly face. In Cannes, France, last week, Japanese Prime Minister Yoshihiko Noda confirmed he and Chinese President Hu Jintao will meet this week while both men are in Honolulu. They met in Cannes but only for about five minutes.

Japan's Kyodo News Service said the two men agreed to "deepen their mutually beneficial strategic partnership." Japan has been feeling a little better about China lately because China provided assistance after the March 11 earthquake and tsunami.

But Chinese officials are still upset about an incident several months ago in which a Chinese boat captain was arrested after colliding with a Japanese boat in waters that China claims as its own. Anti-Japanese sentiment in China could impede progress on trade.

Japan and America

Don't expect Japan to agree to whatever free trade agreement Washington wants. Japan's leaders face protectionist pressure from opposition politicians, who held a demonstration in Tokyo, one holding a sign that said, "Japan is not America's plaything." Some members of the ruling party joined the protest, according to a Tokyo television station.

The Japanese government estimates that more than 10 trillion yen in export sales if Japan doesn't join TPP, but the farm lobby says Japan will lose 8 trillion yen if it does join, by losing the 778 percent import tariff on rice.

Farmers, 4 percent of Japan's work force, contribute only 1 percent to Japan GDP, but wield considerable political influence. The average Japanese citizen wants rice growers protected when other countries like it or not.

Taiwan and China

Taiwan President Ma Ying-jeou isn't coming to APEC, but a former vice president is. "I'm looking forward to meeting Hu on the sidelines of the APEC summit," Lien Chan said, according to a report from the Taipei correspondent for Agence-France Presse.

Taiwan and mainland China have been cooperating on business in recent years. Taiwan is a huge investor in Chinese corporations - $100 billion at least - and its own manufacturing is important to China. Taiwan is the world's largest maker of semiconductors.

The two governments broadly agree on trade but haven't agree on a dispute arbitration mechanism, according to a Friday report from the Taiwanese state news agency CNA.

Captains of industry

Not only heads of state but also heads of corporations are here for APEC meetings. Google, General Electric, IBM, Caterpillar, Wal-Mart and other companies are sending their CEOs or at least their Asia division presidents.

They have the usual concerns about trade tariffs and subsidization of home-grown industries, but also new ones. Google has experience with Chinese officials controlling access to data, and opposes any future requirement that it put a data center within a particular nation's borders. This is also an important issue for multinational banking institutions.

Other nations, other concerns

Taiwan, Australian and the Philippines plan their own offline talks this week. Philippine President Benigno Aquino III is focused on food and energy security. Aquino is also the only head of state will speak to a meeting of 300 CEOs, the Manila Star reported. The Philippine economy has been sluggish in recent years, and it probably doesn't help that U.S. companies that have invested in the Philippines complain of corruption in the judicial system. But close cultural and economic ties between the Philippines and the United States - one in five Hawaii residents are at least part Filipino - suggest more investment in the future.

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