Pacific Rim economies are debating whether to change the informal Asia-Pacific Economic Cooperation forum so that it can negotiate a sprawling free trade zone, Japanese officials said Monday.
The potentially major change for the 21-member APEC, formed in 1989 as non-binding forum to promote regional trade and investment, would open the possibility of a Pacific-wide trade pact encompassing 44 percent of global trade and more than half of the world's gross domestic product.
The idea faces resistance from some member economies that want to strike free trade deals independently, although overall delegates are demonstrating an openness to it, said the Japanese officials, who requested anonymity because of government rules. Indonesia and the Philippines have said they are cool toward the concept _ known as the Free Trade Area of the Asia-Pacific _ preferring to think of it as a much longer-term goal.
Experts have also said it is an unrealistic objective given the huge variation among the 21 member economies, which range from tiny Papua New Guinea to China and the United States, the world's two biggest. Given APEC's non-binding nature, some have said any trade treaty would have to be forged in a parallel structure.
Still, the idea of an APEC free trade zone, first floated by the U.S. at the 2006 summit in Hanoi, Vietnam, has gained momentum as a way to harmonize the proliferation of bilateral and regional free trade pacts within the region and amid frustration with stalled World Trade Organization talks.
The week of meetings in Yokohama, just south of Tokyo, will culminate in a weekend summit attended by President Barack Obama, Chinese President Hu Jintao, Japanese Prime Minister Naoto Kan and 18 other leaders. Foreign and trade ministers are due to meet Wednesday and Thursday, although U.S. Secretary of State Hillary Rodham Clinton will not be attending.
The annual APEC summit is being held against a backdrop of tension over currencies and territorial disputes that could overshadow its official agenda. Host Japan is embroiled in spats with big neighbors China and Russia over disputed islands.
Those topics will likely be discussed in bilateral meetings between ministers and leaders later this week, but APEC's official agenda is strictly economic. One goal is to draw up an overarching economic growth strategy for APEC members that emphasizes innovation and is compatible with efforts to protect the environment.
During the week, developed nations within the group also will be evaluated on their progress toward reaching APEC's goal set in 1994 in Bogor, Indonesia, to achieve free trade and investment by 2010. Developing nations were given until 2020.
But the new free trade proposal is likely to get the most attention.
According to a draft of APEC's final communique obtained by The Associated Press, the leaders will agree to take "concrete steps toward realization of Free Trade Area of the Asia-Pacific." It doesn't give a timeframe.
Officials said it was far from clear whether the leaders would reach any sort of agreement on converting APEC into a body capable of negotiating a binding trade treaty.
As steps toward creating a Pacific-wide free trade zone, the leaders are expected to endorse possible smaller regional free trade pacts, including the Trans-Pacific Partnership, which the U.S. and five other countries _ Australia, Malaysia, Vietnam and Peru _ are negotiating to join. It currently consists of four small economies: Brunei, Chile, New Zealand and Singapore.
Decisions about whether to join the Trans-Pacific Partnership are up to each country, but any trade deal involving the mammoth U.S. economy would be a turning point for APEC, Japanese officials said.
Host Japan is pushing the Pacific-wide free trade zone proposal, even while it debates whether to join the Trans-Pacific Partnership. Business leaders are urging the government to join or face losing competitive advantage to rivals such as South Korea _ although farmers are strongly opposed to slashing protective tariffs.
"Our country should join the negotiations as quickly as possible, while the door is still open," Masahiro Yonekura, chairman of Keidanren, Japan's biggest business lobby, said last week.
While the non-binding nature of APEC has raised questions about the forum's effectiveness over the years, some participants say its informal nature makes it an easier place for candid discussions.
"APEC is more about the opportunity for leaders to meet and it is actually a better forum than many of the ones that we have because we are not negotiating," Mari Pangetsu, Indonesia's trade minister, said in an recent interview.
Associated Press writers Malcolm Foster in Yokohama and Jim Gomez in Manila contributed to this report.