Apec: From Lofty Trade Talk To Apple Bans And Moths -- Old Barriers Are Falling As 15 National Leaders Gather In Seattle For Historic Forum, But New Concerns May Turn It Into A Tug Of War

When a thousand politicians, policy-makers and economic planners gather in Seattle this week for the Asia-Pacific Economic Cooperation forum, they likely will invoke the sweep of world history and proclaim an era of progress and prosperity built upon unfettered international trade.

Somewhat closer to the ground, Bill Bryant will be looking at a portion of that trade and wondering just how unfettered it is. More precisely, Bryant will be pondering the sex lives of bugs and wondering just how far a male moth's sexual antennae reach.

He will, in other words, be trying to sell apples to Japan.

Bryant is an international trade consultant whose Seattle company specializes in analyzing and negotiating trade barriers. For 22 years, people like Bryant have been trying to disprove Japanese contentions that American apples are dangerous, that they contain pests potentially hazardous to Japan's apple orchards and that they therefore not be allowed into Japan.

International trade, when spoken of by high officials, sounds like a grand affair, and for much of the past 40 years, it has been. Urged on by the United States, the world has experienced an unprecedented period of trade liberalization and economic growth.

Countries separated by centuries of ethnic, ideological and cultural differences have been united under the banner of economic development. Nowhere has this been more evident than in the countries represented at this week's APEC meeting. Barriers to trade, travel and investment fall, it sometimes seems, daily.

But the grunt work of trade expansion, of opening markets, is often numbingly mundane and is more likely to be accomplished by bureaucrats and technicians than world leaders.

Especially now, as countries strip away formal trade barriers such as high tariffs and low quotas, informal barriers called technical standards have emerged as mighty trade weapons, even if they take the form of tiny moths.

"Technical standards are the last moats countries can dig around themselves," Bryant says. "Japan's moat is about the size of the Pacific Ocean."

Japan and the United States have the world's two largest economies. Their combined economies are five times larger than the 13 other APEC economies combined. Each is the other's largest overseas trading partner. If they have problems with one another, APEC, by definition, has problems.

APEC has problems.

It's a new organization that doesn't yet know what it is, trade specialists say. And many of its diverse members want it to be very different things.

The Seattle meeting, heightened by the first Asia-Pacific summit meeting tacked onto it, could well turn into a tug of war between those like the United States who want APEC to grow and those like Japan who want it to go slow.

The Japanese-U.S. relationship, which officials on both sides call the most important bilateral relationship on the planet, was built over the long period of Japan's postwar reconstruction. But it has faltered in the past decade. The inability of either side to do anything about Japan's persistent trade surpluses has frayed tempers on both sides of the ocean.

Just this month, President Clinton raised the specter of Japan rushing into Mexico to sweep up pieces of U.S. trade lost in the prospective ruins of a defeated North American Free Trade Agreement.

This might not cross the diplomatic line that separates Japan bashing from normal politics. But, in the polite words of Masaki Saito, Japanese consul general in Seattle, "His making Japan as some sort of threat is not contributing to the relationship."

Not much that happens these days does contribute to the relationship.

"You can talk in general about the problems, but in order to solve it, until you get down to particular problems with particular commodities, you won't solve it," says Tom Mathison, a Wenatchee Valley apple grower.

LONG, INVOLVED PROBLEMS

The particular problems of the particular commodity of apples are long, involved, and at times comical. They are also illustrative of what has emerged as a potent new form of trade barrier affecting everything from automobiles to baseball bats. They differ from fights over other products mainly in the length of the fight to overcome them.

Rufus Yerxa, a deputy U.S. trade representative, summarized the difficulty of trade negotiations in a speech last year:

"If Moses had been a trade negotiator, his negotiations with the Lord would have lasted 10 years. And today we would only have five commandments."

As officials of 15 Pacific Basin countries gather to debate "economic cooperation" at scattered venues around the Puget Sound area this week, it is worthwhile to consider apples.

Washington apple growers will produce about 12 billion apples this year worth close to $1 billion. They will export about a fifth of the crop around the world, but none to Japan.

The United States shipped some apples to Japan with its occupation forces after World War II, but there had been no serious attempt to sell apples to Japanese consumers before the U.S. Department of Agriculture started studying the possibility in 1969.

Hal Moffitt, a senior research entomologist with the Agriculture Research Service, a USDA agency, was one of the scientists assigned to study what it would take to get apples into Japan.

Moffitt and others concluded Japanese quarantine restrictions were not an insurmountable obstacle, but that there was little or no market.

Japan had enough apples of its own. Apples were dropped in favor of cherries.

The USDA and cherry growers began campaigning to export cherries to Japan in 1971. The first shipments were approved in 1978, which everybody involved considered a speedy resolution.

As progress began to occur with cherries, some Washington growers decided to resume work on apples.

The Japanese listed a maggot, a fly, two moths and a borer and one type of bacteria as potential problems.

"In 1974 we sat around a table and we raised $100,000 to work on the science issues," recalls Mathison, the Wenatchee grower. "Some growers said you'll never get anywhere until you address it on a political level. We decided to treat it as a scientific issue and go ahead on that basis."

Over the next 10 years, the industry and the USDA successfully demonstrated and the Japanese agreed that the maggot, the fly and the borer were not problems.

The bacteria, called fire blight, and one of the moths, called the lesser appleworm, were not deemed serious problems and were neither much studied nor discussed.

Attention focused on a common apple pest known as the coddling moth. Moffitt in 1984 submitted his first tests of a treatment program for the moth, but even as he was doing the test, he told a reporter:

"We just might never satisfy answers to their technical questions. You can always ask questions you can never get answers to."

ALL PLANS REJECTED

A year later, that was exactly what had happened. Various inspection regimes had been proposed to the Japanese. All were rejected.

Japanese scientists insisted apples be sprayed with methyl bromide to kill any potential moths. U.S. scientists insisted methyl bromide would destroy the apples.

Apple growers met with Reagan administration trade officials and asked them to intervene. They were told to try to meet the Japanese demands.

Sid Morrison, then the congressman from central Washington's apple-growing region, says the apple growers lacked numbers and importance.

"We didn't have the political strength to push ahead of semiconductors and automobiles," he says. The result was a revolving set of negotiations.

"The Japanese would develop a protocol. The USDA would agree to it. Then they'd come up with a new one. . . . With the science, it's like statistics. Sometimes you can squeeze whatever you say in whatever direction you want."

The USDA developed a plan to put harvested apples in cold storage, then fumigate them to ensure any moths would be killed. They presented their plan to the Japanese Ministry of Agriculture, Forestry and Fisheries in June 1986.

Tests of the plan and further negotiations led the Americans to believe the treatment program would be acceptable.

By early 1988, large-scale tests confirmed the treatment program worked. Americans submitted the test results to the Japanese and also included data on fire-blight bacteria, which the Japanese had begun to raise as an issue.

Fire blight infects apples on the tree and, if it infects them, kills them. It is not, trade negotiator Bryant says, known to be a "post-harvest problem in mature, symptomless" apples. In other words, if an apple lives long enough to be harvested, it doesn't have fire blight.

FIRE-BLIGHT TREATMENT

That winter the Japanese accepted the proposed treatment for the coddling moth, but said they also wanted an additional treatment for fire blight.

In May 1989, more data was sent to Japan asserting fire blight was not a problem.

There was no response until December, when the Japanese said they needed more data on fire blight and also on the second moth, the lesser appleworm.

They also stipulated that any fruit shipped to Japan would have to be grown in an orchard surrounded by a 500-meter buffer zone, essentially eliminating half of the orchards in Washington.

The next summer Bryant met with Japanese officials in Tokyo to draft an outline of final requirements. One of the Japanese negotiators had been posted in Brazil, where Bryant attended high school. They would frequently ignore their interpreters and speak directly to one another in Portuguese.

The meeting, dealing mostly with fire blight, went well. Lesser appleworm was barely an issue. Bryant was so enthused at the end of the meeting he unveiled a Japanese figure called a daruma.

Darumas are colorful wooden dolls said to derive from the legend of a 12th-century Buddhist monk who prayed so long and so hard his legs fell off. They are weighted at the base and bounce back like a child's punching bag when pushed. They are often used in contemporary Japan by politicians to indicate persistence.

Following tradition, a political candidate will paint in one of the daruma's eyes when a campaign begins, then paint in the other when he wins.

Bryant painted in the first eye at that meeting in the Japanese agriculture ministry in August 1990.

The August meeting was followed by a government-to-government meeting in October at which the outline was revised to include growing Japanese concerns on the lesser appleworm. A working draft was submitted to Japan in December.

Moffitt says lesser appleworms are plentiful in the Western United States, but mainly among wild hawthorne plants at higher altitudes. He kept insisting to the Japanese that there was nothing in the experience of Northwest growers or in the scientific literature to indicate they were a problem.

Proving a negative proposition is difficult in any circumstances. Proving one that has never been studied because no one ever suggested the need to do so is even more difficult.

POTENTIALLY SERIOUS

The Japanese based their concern about lesser appleworms on a 1971 article, which in turn alluded to earlier assertions that the lesser appleworm was a potential serious problem.

Those earlier assertions, when Moffitt finally tracked them down, turned out to be from a journal article written in 1908.

"This does have its humor, which is fortunate," Moffitt says. "Otherwise it would just be depressing."

In spring 1991 Moffitt set up traps in Washington orchards designed to catch lesser appleworm moths, which had never been seen in the orchards.

Unfortunately, the traps - baited with female moth pheromone, a sexual stimulant - caught half a dozen of the moths.

NO WAY TO CONFIRM

Moffitt speculates the moths were drawn from the foothills outside the orchards by the traps.

There is no way to confirm or refute this. The Japanese insist they want a fumigation program for lesser appleworms, which Moffitt and other U.S. scientists insist don't exist in the orchards.

Even if they did, the Americans said, the fumigation treatment for coddling moths would kill the lesser appleworms as well.

That winter U.S. and Japanese government negotiators met again to draft the final export standards. According to minutes of the meeting, U.S. officials thought all outstanding issues, including a schedule for on-site inspections in 1992 by Japanese scientists, were resolved.

The inspectors never arrived.

U.S. officials asked why not. Japanese officials said unresolved issues remained. U.S. officials pointed to the minutes of the winter meeting. Japanese officials said they had never signed the minutes.

The argument continued for more than a year.

Finally, this spring the U.S. ambassador to Japan, Michael Armacost, sent a cable to Washington saying the apple problems were political, not scientific. He asked U.S. Trade Representative Mickey Kantor to intervene.

Kantor and Secretary of Agriculture Mike Espy co-signed a letter threatening U.S. action against Japan if the apple issue was not resolved. This summer, the Japanese relented. They agreed by letter to allow American apples from the 1994 crop to be exported to Japan, provided all technical concerns were addressed.

Kantor and Espy hailed this as a breakthrough. Politicians congratulated themselves. Apple growers celebrated.

Moffitt, the chief scientist on the problem for more than 20 years, was less impressed.

"The agreement is contingent upon Japanese certification that all technical problems have been resolved. That's exactly where we've been since 1969," he says.

Bryant, the trade negotiator, says the agreement "has holes big enough to drive a freight train through."

The daruma still has one blank eye.

ANNUAL BOOK

The U.S. trade representative annually publishes a book detailing foreign-trade barriers. The book covers purported barriers in 45 countries, many of them in less than a single page. The section on Japan in the current book is 19 pages long.

At various times in the past decade, Japanese officials or industrial leaders have argued that the U.S. desire to sell wood products to Japan was a ruse so that the Americans could more easily burn Tokyo to the ground, that long-grain American rice could not be digested by short-grain-habituated Japanese stomachs, that American beef didn't have enough fat in it and that American baseball bats had too much aluminum in them.

Japan is certainly not the only country to rely on technical standards to protect its markets. The United States, to name just one other, has similar protections. In fact, the USDA prohibits importation of Japanese apples for reasons that sound startlingly similar to the reasons the Japanese offer for prohibiting American apples.

Saito, the Japanese consul general here, says Japan has as much cause for complaint as the United States.

"This is a typical example of U.S. unilateralism," he says, citing the Clinton administration's fondness for boisterous trade threats.

MUCH LESS ATTENTION

The U.S. prohibitions have received much less attention, mainly because the Japanese have never tried to ship apples here. Japanese apples routinely sell for $4 to $5 per pound and nobody thinks many Americans, used to paying one-fifth that much, would pay that price.

And, U.S. officials argue, the U.S. requirements have been clear and unchanging. The Japanese requirements amount to what one grower calls "the pest of the month club."

The case of apples, the Japanese say, is purely a scientific problem. Once the United States answers the scientific questions, American apples will become as Japanese as American baseball. The science is a smoke screen, the Americans say, and after 22 years, a particularly transparent one. The issues here are political, they say, owing to nothing more complicated than the political strength of Japan's farm lobby.

There are already apples in Japan. That, Americans say, is most of the problem. The technical prohibitions against American apples are silly in some cases, resolvable in all, they say.

"Every country has a right to establish standards, but this had less to do with scientific safety concerns than to provide some protection to their growers," says one U.S. official.

"Apples are textbook, classic, Japanese Japaneseness," said Clyde Prestowitz, a former U.S. trade negotiator. "Classic Japaneseness," which is to say, very different from classic Americanness.

UNDERSTATING A PROBLEM

To say that a problem is merely scientific or merely political is to understate it in either case. Problems between the U.S. and Japan are not "merely" anything. The trade debates illuminate, as they often do between any countries, fundamental differences of culture, economics and history.

Just in the case of the apples there are conflicts between a country with big farms and one with little farms. There are 85,000 apple growers in Japan. The United States produces twice as many apples with 3,500 growers.

The U.S. apple industry is highly mechanized. Apple-processing plants are automated, computerized industrial outposts.

In Japan, says Jon Jenni, an agricultural trade officer in Tokyo: "A farmer might have four cattle, some barley, some rice and 10 apple trees. A lot of the fruit is wrapped individually on the tree. Each piece of fruit is almost given a name. "

The result of the American system is lots of pretty good apples at very low prices. The result of the Japanese system is a few great apples at very high prices.

The benefit of almost every sort of trade protection is narrow, aimed at a particular class of producers, in this case Japanese apple growers. The cost of almost every sort of trade protection is broad, borne by the general class of consumers, in this case everybody who pays $5 a pound for Japanese apples.

This isn't to say Japanese consumers have complained. In fact, consumers in Japan have historically sided with producers in order to preserve a way of life, which is what almost all trade disputes are about - one country wanting change, the other resisting it.

When change is the defining characteristic of a region, which it is in the Pacific, conflict is never far away. This is why many observers think there is great need for an organization like APEC and little chance that it will accomplish very much very soon.