The significance of the recent meeting of the 21-member Asia Pacific Economic Co-operation (APEC) forum lies in its vigorous espousal of multilateralism as the preferred means of lifting the global economy from the morass in which it finds itself. It came off barely 10 days after the landmark G-20 summit in Washington at which political leaders from developed and important developing countries agreed to tackle the common economic problems arising out of the financial secto r meltdown concertedly. The APEC meeting, though not as focussed on the financial sector as the G-20 meet was, lent considerable weight to the conclusions of the Washington summit that charted a road map for a drastic overhaul of the global financial sector architecture. APEC accounts for 41 per cent of the world’s population, almost 55 per cent of the global GDP, and 49 per cent of world trade. It has as its members such heavy weights as the United States, China, Australia, Canada, and Japan. Pointing out that the financial sector crisis originating in the U.S. home loan mortgages has long since morphed into a global economic crisis, APEC has warned against creeping protectionism. In a significant decision, the group agreed not to erect trade barriers for at least one year and pledged to advance the Doha round of trade talks.
However, despite the all-round support for multilateral trade in principle, reviving the stalled Doha round bristles with practical difficulties. After the APEC meeting. the expectation is that a framework agreement on all the contentious issues, especially agricultural trade and non-agricultural market access (NAMA), could be reached by the end of this year. However, the chequered history of the Doha round over the past seven years suggests that such hopes can be premature. For instance, in July this year the mini-ministerial meeting at Geneva broke down after the negotiating countries failed to reach an agreement over a technical issue connected with agricultural trade. Ironically, the rapid slowdown in the global economy, which open multilateral trade hopes to arrest, will itself be the biggest stumbling block to an early completion of a rule-bound trade agreement. In the U.S., growing job losses and shrinking consumption are stoking protectionism. Moreover since July the political climate has become less conducive in many other countries. As for India, the season of elections is hardly the time to push for a trade agreement.