Asia Pacific Economic Co-operation: Past and Present Challenges
Introduction
It is my pleasure to be here at Diplomatic Academy of Chile, one of the oldest diplomatic institutes in the region. I have been informed that this fine Institute has hosted many diplomats from Asia-Pacific. Today, I am honoured to address the group of people whose interests are foreign affairs issues and, of course, the Asia-Pacific.
As Chile will be hosting APEC Meetings in four's time, confirming the importance it attaches to Asia-Pacific region and to APEC, I think it is befitting for me to share with you where APEC is today, its future and challenges lie ahead of us.
Looking back to the seventies and eighties, in terms of economic growth, the decades, no doubt, belong to Asia. The world saw a region of unprecedented dynamism and astounding growth associated with economic inter-dependence. With the eminent end of the Cold War, many Asian leaders, political analysts and academia felt that the US should not be allowed to lose its interest to the region and therefore should be kept engaged. Europe, they argued, would be more pre-occupied with its own backyard affairs - The European Union. In addition to these factors, there was growing intergovernmental interest for a regional organization to further promote economic cooperation. What might be the determinant factor for the formation of Asia-Pacific Economic Cooperation in 1989 was the proposal by Prime Ministers Robert Hawke. Thus APEC was borne in Canberra.
The Vision
The turning point for APEC was the first Informal Leaders Meeting way back in Seattle in 1993. The Leaders proclaimed their vision for an Asia-Pacific community built through economic growth and equitable development, and through trade and economic cooperation. A community that is to be based on the spirit of openness and partnership, co-operative efforts to solve the challenges of change, free exchange of goods, services and investment, higher living and educational standards and sustainable growth for all the economies in the region.
Since then, APEC has grown in substance and purpose - from mere exchanges of economic issues of common concern to commitment to the multilateral trading system and its further development through consensus building. The Leaders Meeting in Bogor, Indonesia in 1994 was APEC's second key milestone. The challenge was to translate that vision into goals - goals to strengthen the open multilateral trading system, enhance trade and liberalization in the Asia-Pacific and intensify development cooperation in the region. But the real news was the "Bogor Declaration", in which the Leaders agreed to establish free and open trade and investment in the APEC region by 2010 for developed economies and by 2020 for developing economies.
The third and final milestone took two Leaders' meetings to complete. In Osaka (1995) and a year later in Manila (1996), the Leaders added flesh to Bogor's bare bones. They agreed to a three-pillar action agenda: a mix of individual and collective steps in liberalization, facilitation, and economic-technical cooperation designed to meet the 2010/2020 goals. This "Osaka Action Agenda" and "Manila Action Plan" helped crystallise APEC's work agenda so APEC could map out a path to free and open trade and investment in the Asia Pacific region by 2020.
The agreements reached in Bogor, Osaka, and Manila still serve as the beacons for APEC's work. And those three milestones have pushed APEC process far beyond the original goals of the founders of APEC, thus fostering a process of economic cooperation with far-reaching potential.
Since those early days, APEC was already concerned with issues that matter to its community. To make itself relevant to business, APEC set yet another vital and historical decision by announcing, in Manila, that APEC meant business. To help realize this important decision, a group of prominent business representatives, APEC Advisory Business Council or ABAC, was formed to advise Leaders and Ministers and to provide insights and counsel for APEC activities. Leaders have, till today, continued to receive an annual year-end reports that are always cutting-edge, thought provoking, and very challenging for APEC officials. As much as anything, it is this APEC's very close and strong ties to business, at all levels, which sets it apart from other international and regional organizations.
Outcomes of Seattle WTO Ministerial Meeting
While the outcomes of the Seattle WTO Ministerial Meeting did little to help what APEC has been trying to achieve, and while many factors have been attributed to the failure to launch a new round, one dimension stands out and that is WTO and APEC are challenged to communicate the impact of globalisation as well as the positive effects of liberalisation.
There remains no doubt that APEC remains committed to trade and investment liberalisation and will continue to support and contribute to the Multilateral Trading System. Indeed, APEC Trade Ministers Meeting in June (Darwin, Australia) and The Leaders Meeting in November (Brunei) will provide opportunities to build political support for the WTO.
We all know that trade and investment liberalisation is good. We all know that those economies practising open trading systems fare better than the others that do not. Indeed, a recent study of 80 economies by two World Bank economists demonstrates conclusively that economic growth benefits the poor in the same proportion as it benefits the population as a whole. In effect, then, the economic growth brought by through globalization raises all boats.
However, the lessons of Seattle suggest that globalisation, or misperceptions about it, can divide people. It can be seen as marginalizing countries and people. While liberalisation is not necessarily bad, many of those on the streets of Seattle thought otherwise.
APEC faces yet another challenge that it should, first and foremost, benefit its people. This brings me to this year's agenda. The main thrust of this year's APEC theme - delivering to the community - which:
- Embody the importance of developing more open markets as well as investing in the people and businesses which operate in those markets;
- Catalyse the advancement of technology and bring APEC closer to the new opportunities brought by technology; and
- Show that, while much of APEC's work is investing in the future, APEC creates a valuable selection of 'products', which are of relevance to the wider community in their daily lives.
To be more specific, this year's priorities build upon the robust outcomes of Leader's Meetings in Auckland last year and include:
- Preserving and strengthening markets and continuing reforms;
- Continuing to advance APEC's main agenda - Trade & Investment Liberalisation and Facilitation.
- Developing human resources with particular emphasis on capacity-building
- Focusing on and supporting SMEs, the backbone of many of the APEC economies; and
- Strengthening work in the areas of information and communication technology
Strengthening Markets and Facilitating Business
Amid growing signs of economic recovery throughout the region, APEC Leaders and Finance Ministers continue to explore ways to accelerate the recovery process and meet longer-term challenges. The cooperative growth strategy the Finance Ministers have adopted has yielded in stabilizing financial markets and improving the economic outlook. They however stressed the need for continued financial and corporate restructuring in the crisis-affected economies.
Under the umbrella of strengthening markets, APEC will strengthen markets by providing greater transparency and predictability in both the corporate and public sector governance, by enhancing the role of competition to improve efficiency and broaden participation by enterprises and by improving the quality of regulation together with the capacity of regulators to design and implement policies for sustainable growth. Also receiving APEC focus and strong attention is works that promote legal infrastructure and SME, new business development, and assist members that wish to implement APEC's menu of options for investment liberalisation.
The APEC business sector reminds us regularly that APEC trade facilitation exercises are as important as trade and investment liberalization. Trade facilitation, the second of the 3 pillars of Osaka Action Agenda, contributes substantially to efforts to strengthen markets and enhance market access. Most notable of facilitation activities is in the area of Custom and Standard Harmonization. The committee entrusted with implementing these initiatives is also vigorously working on Paperless Trading, which would be implemented by 2005.
These actions have already resulted in significant cost savings for exporters and importers. It should come as no surprise that business strongly welcomes these efforts and the benefits and cost savings they will bring to doing business in the APEC region. Officials are now working on a set of non-binding principles of Trade Facilitation together with implementation plan that would assist policy makers in formulating and implementing trade and investment measures that are pro-business.
Making APEC Matters More
To address concern on impact of globalization and benefits of trade liberalization, APEC is enhancing its outreach activities to its own community and has proposed to come up with one stop information channel. As a first step, APEC Secretariat is redesigning its website to ease access to wide-ranging information already available on the website. There will be a new and improved window in the web site to facilitate information for business and a publication on APEC's achievements.
To fulfil Leaders and Ministers' instruction for a more user-friendly and informative Individual Action Plan, APEC has made good progress on this project and will finalise it by October this year. In addition, Senior Officials are also looking at ways to enhance business participation in APEC process. We are encouraged to have this year one member economy voluntarily opened its IAP peer review to members of ABAC.
Very briefly, on the SME one of the key APEC priorities this year and important engine of growth for APEC economy, a Ministerial Meeting to be held this June in Brunei, will focus mainly on Strengthening Markets and Entrepreneurs. Four of the specific topics that will be addressed are:
- Human Resources development
- Information and Communication Technology
- Financing SMEs, and
- Strategic Alliances between SMEs and Large Firms.
New Opportunities
One of the sub-themes of this year's APEC Meeting addresses the issue on new opportunities taking into account the vital importance for knowledge-based economies and the potential, for business, of information and telecommunication technology. The E-Trade Fair and the E-Commerce workshop held in conjunction with the SME Ministerial will help SMEs grasp how to harness the huge potential of these sectors and the revolutionary impact they have on doing business, affecting everything from production and sales to servicing and advertizing. In a real sense, it is the Internet and the new technologies, which can help SMEs, reach a much broader market, leapfrogging the confines of local consumer markets.
The Blueprint for Action on Electronic Commerce sets out the broad themes for cooperation on electronic commerce within APEC and specific activities to be carried out on an APEC-wide basis. Leaders and Ministers, last year, reiterated the importance of continuing work on e-commerce in cooperation with the private sector and Ministers have directed officials to develop directive data and indicators of e-commerce uptake in APEC economies, initiate work on consumer protection, and develop an APEC-wide plan to support the use of e-commerce by SMEs.
APEC means more to its community
To provide greater coherence and relevance to the community, it is important that APEC matters more to the community. I believe strongly that it already matters to the community - our challenge is to publicize why that is so in a way, which those living in our economies can best, understand.
APEC is also concerned with a very new but nonetheless real phenomenon - the digital divide. As the world economy moves further toward this post-modern age of advanced technology, there is a fear that some will be left behind. It would be sadly ironic if a creation designed to bring the world closer together, the Internet, instead ends up leaving some even further behind. The challenge for APEC in its economic and technical cooperation and capacity building work will be to realize this potential in such a way that everyone benefits.
Efforts to ensure APEC is addressing issues of community's concern are not confined to the annual Joint Ministerial Meeting. Other ministerial meetings such as the Fourth Energy Ministerial and Education Ministerial concluded a while ago have addressed issues that would benefits the people and the environment they live in. The Telecommunication, Tourism and Trade Ministers Meetings too will be good opportunities for Ministers to underscore these concerns. All the outcomes of these Ministerial Meetings would collectively add up to as deliverables of our Leaders when they meet later in November in Brunei.
Youth participations are not forgotten. There are many activities being planned throughout this year. APEC Science Festival will bring young scientists from APEC region to Singapore in June for education exchanges and interaction. Brunei is hosting Youth Arts Exhibition coinciding the Leaders and Ministers Meeting. Chile's participation is very much welcomed. Similarly, Korea will be hosting APEC Youth Skills Camp in Ulsan in September. Thailand is organising APEC Youth Networking in July.
I want to conclude by saying that the future of APEC is very good. The confidence shown by future hosts including Chile in 2004, the opportunities it has provided our leaders/ministers to interact and know each other, discuss issues of bilateral and regional concern aside APEC main agenda makes APEC matters more.
Thank you.