THE PRESS THURSDAY, MAY 24, 1984. Against Pacic trading bloc

Press, 24 May 1984, Page 16

THE PRESS THURSDAY, MAY 24, 1984. Against Pacic trading bloc

“The idea of the Pacific Basin being a selfcontained entity is a non-starter,” the Prime Minister, Sir Robert Muldoon, recently told 400 members of the Pacific Basin Economic Council in Vancouver. The comment was important; it appears to be the strongest on record from the Prime Minister on the subject. Sir Robert has challenged the proposal, put forward from time to time, that Pacific countries form a trading group of their own. The members of the P.B.E.C. come from the richer countries of the Pacific region. Notions of a Pacific Basin community, or trading bloc, have been advanced in some of them. Prosperity, however, does not guarantee regional wisdom.

Sir Robert Muldoon has alluded to the Pacific community notion before, most recently in Honolulu about three months ago. He was generally cautious of the idea then and his Vancouver speech goes further in opposing it. His attitude makes sense. It is a logical development of his plea for an overhaul of trading and payments systems round the world. Even if his proposals on world trade are not accepted by major Western countries, his attitude on trade relations in the Pacific still makes sense. He wants fewer restrictions on international trade, not the appearance of another trading bloc. If much energy were directed to the establishment of a Pacific community concept that included major trading arrangements, comparisons with the European Economic Community would be bound to arise. Before long there could well be attempts to form a trading bloc to negotiate with the E.E.C.

The momentum of establishing special trade associations among Pacific nations would make the region inward-turning. Considerable energy would be diverted away from the object of reducing barriers to free trade round the world. As Sir Robert Muldoon said to P.B.E.C. members: “You businessmen need access to markets everywhere for exports and imports of goods and services, for investment opportunities, technology and ideas ... our interests are plainly to keep markets open everywhere.”

the Pacific community idea always had serious difficulties, especially in deciding which

States might be invited to join. Could the two Koreas be included? Would China be part of it? The Soviet Union has a long Pacific coastline, but not even the most optimistic versions of a Pacific community included the Soviet Union. The community might well become a means for the huge Japanese economy to dominate the region. Three of New Zealand’s four main trading partners — the United States, Australia, and Japan — would be included. Europe, the Middle East, and the Soviet Union, all important to New Zealand, would be excluded. The countries of the Association of South-East Asian Nations — Thailand, Malaysia, Singapore, Indonesia, Brunei, and the Philippines — have shown no enthusiasm for a Pacific trading bloc, which they see as having the potential to overshadow A.S.E.A.N. itself. They also want improved access to markets beyond the Pacific. Yet no Pacific trade group would make sense if these vigorous and expanding economies were not included. Japan’s approach to the Pacific community proposal has generally been to await the reactions of others. Australia under the Hawke Government became enthusiastic for a time. There were two main Australian approaches. One was for the establishment of something akin to a Pacific trading bloc. The other was for the development of a Pacific approach to world-wide trade through the Multi-lateral Trade Negotiations under the General Agreement on Tariffs and Trade. It was this idea that received most support. Sir Robert Muldoon has been showing disenchantment about the G.A.T.T. approach to world trade and considers that radical changes are needed. However, his proposal that the Pacific countries should strive for an improved system of international trade and payments is close enough to Mr Hawke’s proposal for there to be little to quarrel about. The Pacific region has some of the fastest growing economies in the world and is rich in resources. Countries and trading alliances outside the region seek more opportunities to invest and trade round the Pacific. A co-ordinated attitude among Pacific countries towards more liberal international trading could help to reduce trade barriers round the world.