comparable trade liberalization and bind those reduced rates of protection, provided that the rest ofWTO offered ta reciprocatesuch liberalization, Such a strategy would avoid the need to consider turning APEC into an discriminatory trading bloc, while countering US concerns about unilateral It would also remove reduction of the sectors. the need for concern about the EU, or others. "free-riding on APEC participants. This approach could make it possible for the USA to be involved effectively in APEC's trade and investment facilitation from the outset. At the same time, it can maximize APEC's potential to ensure a global response to the reduction of traditional trade barriers, through its growing collective influence in the WTO and other multilateral forums. Notes
1.A concern about non-participa advocate that APEC be transformed into a discriminatory arrangement, granting benellis ade liberalization only to those which "reclprocated' these reforms (Bergsten 1994).
2.Elek et al ll995) sets out a detailed and lengthy political problems which would which would allow need to be overcome to negotiate a APEC wide agreeme Article 24 ofthe GATT/WTO discriminatory trado liberalization under 3. See, example, the reservations a Japanese ministrs on agricultural reform and their wlsh to defer decisions on agriculture as long as possible as repartid in The Australian
4.By contrast, if any regional gmup of Economies wished to discriminate against producers would need to make a binding commitment to all of these from other econom matters in order to meet the conditions of Article 24, allowing exemption from the non discriminatory MFN principle of Art e 1 of the GATTAWTO could make sense rar APEC governments 5. Bora and Findlay (1996) po out tha negotiate all reductions traditional border barriers to trade in the WTO, which specifically designed to deal with 1hese issues. That division of ellort, wnuld allow APEC to concentrate on trade and investment facilitation, in which this new protess is expected to have its comparative advantage for achieving results 6, These concerns are not founded on elther economic logic or on pragmatic po considerations Recent analysis and modelling by the World Bank (1994) demonstrates that the gains to APEC econmmies from discriminatory trade liberalization would be lower than same extent of liberalization on an MFN basis, Nevertheless, he gains fro discriminatory liberalization is sometimes advocated by those who believe that benefits of liberalisation APEC economies must be denied to APEC's trading partners nless they reciprocate, order generate a positive response. They argue that th "leverage required to persuade the European Union and others to enter negotiations ion can only be generated by discritnination against thern global libera The World Bank analysis clted above also indicates that such leverage would egligible. While APEC participants would ga substan more from MFN e effect of either MFN discriminatory liberalization on beral e EU would be qulte minimal. Seeking to obtain such leverage by an attempt to seek Congresslonal cal cost.