Trade Meeting Opens With a Spat

KUALA LUMPUR, Malaysia — A bitter row between the U.S. and Japan over trade got a major trade conference off to a mudslinging start on Friday.

A Japanese ministerial spokeswoman said the U.S. side was possessed by an “evil spirit” after the top American trade official accused Japan of trying to buy the votes of other Asian countries with $30 billion in “aid.”

It was an inauspicious beginning to the annual meeting of the Asia-Pacific Economic Cooperation forum (APEC), which is due to be joined by President Clinton, Secretary of State Madeleine Albright and other Pacific Rim leaders over the weekend.

While most attention has focused on the controversial policies of the conference host, Malaysian Prime Minister Mahathir Mohamad, the main official business of the sessions is an Asia-wide trade liberalization package with steep tariff reductions in nine industries.

With most of Asia in deep economic trouble and leery of opening its markets further, this has put the U.S. and Japan on a collision course.

U.S. officials berated Japan again late Friday, accusing it of jeopardizing this year’s meeting by refusing to lift politically sensitive tariffs in the forestry and fisheries industries. They linked Japan’s position on tariffs to its recent offer of $30 billion in economic aid to the region.

“Japan has gone around the region offering assistance in the form of money to countries willing to back away from the [trade] initiative,” said visibly frustrated U.S. Trade Rep. Charlene Barshefsky.

“That is terribly disturbing and destructive,” Barshefsky added later.

Japan’s response was equally harsh.

“Even though you have an evil spirit, please do not consider that other people also see the world in such an evil way,” said Mikie Kiyoi, a spokeswoman for the Japanese Foreign Ministry, in denying Barshevsky’s charges.

Japan, in turn, accused the Clinton administration of endangering the region’s fragile economic condition by pushing market-opening measures down the throats of countries too weak to open their borders further.

That position got strong support from Mahathir, who told an APEC trade fair Friday that “weakened economies cannot be expected to shoulder the same level of commitments to liberalize their market as the stronger ones.”

Mahathir, an outspoken critic of Western-style capitalism, also wants APEC to support greater regulation of the unruly global financial system that he blames for impoverishing his nation. Earlier this year he imposed capital controls to stabilize the battered Malaysian currency.

As host of this year’s event, Mahathir will have numerous opportunities to push his anti-globalization mantra. But it remains to be seen how influential he will be, given international outrage over his harsh treatment of former deputy prime minister Anwar Ibrahim, who was fired and imprisoned in September after challenging the prime minister’s isolationist economic policies.

Anwar, a charismatic politician who was Mahathir’s longtime protege, has since been put on trial on charges of subversion and sodomy, a crime in this predominantly Muslim nation. His trial, which was recessed Friday until after the APEC meeting, is expected to last until next year.

To express their displeasure, President Clinton and Canadian Prime Minister Jean Chretien have declined to meet Mahathir outside the regular APEC summit. Secretary of State Albright has said she will try to meet Wan Azizah, Anwar’s wife, a move that is certain to upset the host government.

Rafidah Aziz, Malaysia’s minister of international trade and industry, warned her country’s APEC guests to keep their criticisms of Malaysia’s domestic politics to themselves.

“This APEC meeting is not about minding somebody else’s business,” she said. “It’s about minding APEC’s business.”

But even in a country such as Malaysia where the government keeps a tight rein over the media and its critics, it is difficult to keep everyone’s mind on APEC.

The White House is scrambling to put together a contingency plan in case a U.S. military attack on Iraq prevents President Clinton from attending. And Indonesian President B.J. Habibie is also wondering whether to stay home to attend to an escalation of violence Friday on the streets of Jakarta.

Whoever shows up will be confronted with the the U.S.-led effort to get APEC to sign on to a package that will accelerate the removal of barriers, including tariffs, in nine sectors including energy, toys and telecommunications. This measure is designed to move APEC toward its goal of a regional free-trade zone by 2020 for all countries.