Clinton claims win on tariffs

David Thurber

Monday, Nov. 25, 1996 | 11:59 a.m.

SUBIC BAY, Philippines -- President Clinton won a victory on the trade front today by persuading Pacific Rim leaders to accept 2000 as the year for cutting tariffs on information technology.

The communique ending the 18-government summit went beyond the language recommended last week by ministers and partially met U.S. demands for loosening restraints on the global market in computers, semiconductors, software and telecommunications gear.

But it hedged by speaking of "flexibility" and of "substantially" eliminating tariffs -- caveats meant to appease poorer nations that fear their high-tech industries will be swamped by cheaper imports if all trade barriers come down at once.

This enabled opponents like Prime Minister Mahathir Mohamad of Malaysia to say he too got his way.

The deadline "is not binding. That means it depends on the abilities of countries concerned to open up their markets," he told reporters. "We feel that if we are not ready we will not have to submit to the deadline."

But Clinton called the pact "a big deal" and a boost for jobs in the U.S. information technology industry, which is a $100 billion-a-year export business.

"Imagine if we went to zero tariffs in the entire world, what that would mean to America and for exports in higher-paying jobs," he said in remarks to U.S. Embassy staff before leaving for Thailand.

He said information technology is "to the 21st century what highways and railroads were to the 19th century."

The statement read by Philippine President Fidel Ramos called for "the conclusion of an information technology agreement" by the World Trade Organization that would "substantially eliminate tariffs by the year 2000," but recognized "the need for flexibility" in the WTO negotiations.

The United States, backed by Japan, Canada and Australia, had wanted all tariffs on computers, software, semiconductors and telecommunications abolished by 2000. Malaysia led the objectors.

When Washington failed to get its way in pre-summit talks last week, U.S. negotiators insisted they were satisfied nonetheless with the wording that was adopted. But Clinton clearly wasn't.

U.S. officials said he warned Ramos, this year's host of the Asia-Pacific Economic Cooperation summit, that the meeting would be judged a failure unless it took a stronger line on information technology.

U.S. officials said Ramos, along with Japanese Prime Minister Ryutaro Hashimoto and South Korean President Kim Young-sam, came to Clinton's support and a new draft was put together over the weekend.

The APEC summit is the high point of efforts by the world's largest economic region to become a free trade area by 2020.

But the difficulties arising from the diversity of the member-economies are obvious from disagreements like the one about information technology.

So the host country tries to keep the summit chatty and informal. This year the dress code was tieless barongs, the flowing white traditional shirts of the Philippines.

Against a tropical backdrop of sea and palm trees, Clinton and leaders from Asia and the Americas sat down in the former officers' club of what was once the biggest U.S. military base in Asia, and is now a duty-free port and engine of the blossoming Philippine economy.

Ramos had called the summit the Philippines' "coming-out party," but it was also, in a sense, the coming-out party of an anti-APEC movement that believes free trade will enrich the powerful at the expense of the poor.

Some 6,000 left-wingers drove a convoy of vans, cars and jeepneys -- homemade buses modeled on World War II jeeps -- to Subic Bay to press their claim that the meeting will enrich the powerful and weaken the poor.

But police stopped them well short of Subic by stalling trucks along the road, creating a huge traffic jam. It was the first time an APEC summit has generated large-scale protests.

About 26,000 troops and police were on guard in Manila and Subic. On Sunday, the United States repeated its warning of last week about unspecified threats to its diplomats,

APEC's members are Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, South Korea, Taiwan, Thailand, and the United States.