The Asia-Pacific Economic Cooperation (APEC) forum is not a negotiation-based, tariff-busting body like the World Trade Organization (WTO) but it has embarked on plans that unwittingly put the heat on members to free up trade and investment, officials say.

Among them is a review process launched this year for so-called individual action plans - the key mechanism in which the 21 member economies make pledges to liberalize trade and investment.

For the first time this year, independent analysts and business leaders have been allowed to join government officials in reviewing the unilateral tariff and other liberalization plans of members.

Japan and Mexico are the first economies to be reviewed under the new system, which emphasizes transparency.

Next year, at least seven economies - Australia, Canada, China's Hong Kong Special Administrative Region, the Chinese mainland, South Korea, New Zealand and Thailand - have volunteered to come under scrutiny.

"This is another bold attempt by APEC to prod members to achieve the Bogor goals," APEC Executive Director Alejandro de la Pena said.

"While the WTO involves reciprocity whereby one member does not move to cut tariffs if the other does not agree to do the same, we in APEC do it voluntarily through co-operation but yet striving to make it an effective and efficient process."

In 1994, five years after it was formed, APEC leaders committed at their annual meeting in Bogor, Indonesia, to tear down their trade and investment barriers by 2020 for developing economies and 10 years earlier for those already developed.

APEC, which operates by consensus, has since become the primary regional vehicle for freeing trade and economic co-operation.

It controls nearly half of global trade with a combined gross domestic product of more than US$18 trillion.

Aside from launching the new review system for trade liberalization, APEC leaders meeting in Mexico this week are expected to adopt a "Pathfinder" programme allowing some member economies to move far ahead than the others in some areas of liberalization.

The leaders are also expected to launch another bold plan - to slash by 5 per cent transaction costs in the Asia-Pacific region over the next five years.

"This trade facilitation action plan is going to save the region billions (of dollars) of money in hidden costs and help cut red tape," De la Pena said.

"We would prefer to roll the red carpet for businesses rather than having them entangled in red tape."

Among areas where business costs would be cut are port charges.

Another plan for possible adoption by APEC leaders is opening up trade in the key information and communication technology sector.

"It will involve both on the physical side like computers and telecommunication equipment as well as on the services side involving telecom firms, Internet services and intellectual property rights," De la Pena said.

But Asia-Pacific business leaders are not content with these liberalization plans, calling instead for more decisive action by APEC leaders at the Mexico talks where issues on terrorism will overshadow those on trade.

"Priority is needed to regain the momentum for trade liberalization in areas where the greatest gains for the greatest number is possible," according to a report prepared by the APEC Business Advisory Council (ABAC) for APEC leaders.

ABAC is APEC's business arm.

APEC groups Australia, Brunei, Canada, Chile, the Chinese mainland, China's Hong Kong Special Administrative Region and Taiwan Province, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Thailand, the United States and Viet Nam.

(China Daily October 24, 2002)