The initiative could distract Apec members' attention from the currently deadlocked WTO talks, and yet Washington doesn't seem to be in a position to push through any new trade deal, given its own political situation at home.

The idea of a free-trade area in the Asia Pacific region has dominated discussions between Apec members over the past two days. Singaporean officials raised the initiative during a meeting of senior officials earlier this week, after Washington had floated the idea prior to the Apec meeting. The idea was also backed by Australia, Canada, Chile, New Zealand and Japan, even though Tokyo suggested that Apec expand the free-trade talks to cover non-tariff areas such as competition policy.

However, Bangkok, along with a number of developing members of Apec, rejected the initiative. First of all, they said it would distract the attention of Apec members - most of which are key members of the WTO - from the Doha Round of trade talks.

"The clock is ticking, as the fast-track authority of the US will expire in June next year. Besides, WTO members will break for vacation from December 20 to January 20, so we don't have much time left, " said an Apec official.

Besides, it is not clear how far Washington will be able to push through the initiative. To launch a new trade deal will require the approval of Congress. However, US President George W Bush does not seem to have much leverage now that the Democrats have gained control of both houses of Congress.

Asked about Washington's motives, a Thai official said: "If you ask me in my official capacity, I would say that it is part of President's Bush's international trade policy, which advocates free trade agreements with many countries. But if you asked my personal opinion on this, frankly, I don't know."

But he thought the idea was a difficult one to implement. "Is the US ready to strike an FTA with China? I think it will be a very complicated procedure."

Other officials said there were several theories floating around about US motives. One theory has it that the US is trying to adopt delaying tactics, as it may not be ready to follow the aims of the Bogor talks (in Indonesia in 1994). The Bogor goal is to open up the markets in Apec's developed nations by 2010 and in its developing nations by 2020.

The other theory doubts that the US would try to undermine the WTO talks. The timing of the proposal is reminiscent of the situation before the Apec meeting in Seattle in 1993 when Washington and Canberra were pursuing a recommendation from a group of eminent people in Apec to create a free trade community. Apec members approved the goal a few years later, but when it was first pushed forward by President Bill Clinton (when the US hosted Apec in 1993), some members treated the initiative with scepticism. It had come at a time when the Uruguay Round of talks was facing stalemate - a similar situation to the Doha round now.

However, a Thai commerce official noted the most likely scenario is that Washington is merely responding to its business sector, which earlier complained of difficulties in doing business with Asia Pacific countries which have different trade agreements and trading standards. Although a study commissioned by the Asia Pacific Business Advisory Council suggests that the Apec free trade area will be very difficult to implement and might not be viable in the short term, Washington has to cater to the US business sector demand by raising the issue at the Apec meeting.

However, some Apec officials believe that if Apec decides to adopt the FTA initiative, it would erode the organisation's "credibility". If this happens, Apec members would be seen as making a U-turn from the long-standing aim to realise the Bogor goal in 2010, which is only three years away.

Another Thai official said that to turn Apec into a free trade area would completely change the forum from its loose and non-binding structure - the core concept of Apec since its inception - in which agreements are treated as voluntary, into a organisation bound by legal agreements. Trade agreements would certainly be subject to legal scrutiny and penalty clauses. The question is whether members want to see Apec turn into this kind of organisation or not.

At the end of the day, officials decided to tone down the initiative. Proponents are asked to study an ambitious set of initiatives for the FTAAP, for leaders to discuss in 2007. They agreed to a statement that leaders instruct senior officials and ministers to conduct further consultations on a possible FTAAP as a long-term goal, as opposed to the WTO which is a short-term goal and the Bogor goal as a medium-term goal.

However, officials said that such agreement was not the end of the story this year. "Of course, we don't know how Apec leaders will react to this initiative if President Bush raises the issue at the leaders' meeting," said one.

The initiative is likely to return when Australia, which supports the FTAAP, becomes Apec host in January next year. "We will not be surprised if it's the case. Any host country likes to proffer initiatives," another Apec official said.

Jeerawat Na Thalang

The Nation

Hanoi