APEC 2004 - One Community, Our Future: A Commitment to Sustainable Development

Honored Senior Officials and Delegates:

I am pleased to extend Chile's warmest greetings to all of the participants in the First Senior Officials' Meeting of the APEC 2004 year, hosted in our capital city of Santiago.

Chile is the second Latin American economies in the Forum to chair and host APEC. This honor coincides with the tenth anniversary of our full membership in APEC.

We admit with modesty, but also with pride, that this is the most important foreign policy event in our nation's history, and each Chilean man and woman is determined to make it a success.

As a small economy, we are meeting this challenge with creativity, in accordance with our limited human and economic resources. We are grateful for the support of APEC's Secretariat and the active participation of all of the Organization's member economies.

Throughout the coming year, we cordially invite you to take a closer look at our country and to enjoy getting to know our people, our land and our culture. This is no ordinary year for us. We are celebrating the hundredth anniversary of the birth of our great poet, Pablo Neruda, winner of the Nobel Prize for Literature, who established a bridge between Chile and the Asia-Pacific region during his life and through his work.

Thus, our APEC 2004 year will serve as a showcase for our country within this community, as a nation which looks toward the Pacific for its development.

Our indigenous peoples called Chile "the place where the world ends." Yet today we feel that this is the place where the new world is beginning, the world of the Pacific Basin -- an enormous market with vast potential for the expansion of trade and investment among entrepreneurs with a vision for the future. The dynamism of this expansion is closely tied to the leadership and decisions emanating from this Forum. The discussions to be held during 2004 are therefore highly important to us, as a country resolutely open to the world.

APEC has played a significant role as a driving force behind successful economic development on both the regional and global levels, and we want it to continue playing this role with energy and determination.

Through active dialogue, we can enhance the ability of our Economic Leaders to respond to the private sector's needs and requirements, and thus promote increased trade and investment among our member economies.

The new approach to relations inaugurated in Bangkok last year among our Leaders and ABAC members will be reinforced during our presidency. We are confident that this will lead to greater benefits for the people of our economies and for the entire Pacific community. We also plan to expand the dialogue between our Economic Leaders, Ministers and ABAC members and other relevant entities, such as the Small and Medium Enterprises Forum.

Chile's hosting of APEC in 2004 comes at a time of favorable economic prospects for the region. The economies most acutely affected by the Asian financial crisis are now experiencing a strong regenerative cycle. And while fiscal stimuli were the initial platform for recovery, ongoing increases in both the volume and value of exports are currently serving as the engine of economic development. Without fear of excessive optimism, we can state that even better times are expected for the Pacific Basin.

Although the economic forecast for 2004 is strongly positive, we cannot dismiss anxieties about some areas of weakness in the global economy. Significant among them are the threat of terrorism, the SARS epidemic, and currently the bird flu and the lack of substantive advances in the Doha round. These problems and challenges remind us of our position as members of a community whose destinies are profoundly interlinked, and thus of the importance of seeking collective responses within APEC to address these issues.

Since Chile joined APEC in 1994, we have regarded this organization as a vitally important partner in confronting the challenges arising from globalization. Chile is basing its prosperity on the liberalization and facilitation of trade and investment, and we recognize that the rising interdependence of Asia-Pacific economies, as well as the improvements in living standards we have enjoyed, are the result of our expanding commercial interchanges.

Currently, international trade in goods represents 65% of our GDP, one of the highest proportions in the world. This is the concrete result of the strategic direction adopted by Chile during the mid-1970s, as it opened its economy to trade and investment.

Chile's numerous trade agreements with a range of countries have enabled our country to achieve unprecedented growth in recent years. During the 1990s, Chile ranked fourth among the countries with the world's highest growth rates.

Chile's decision to pursue economic and financial openness was based on the conviction that for a developing economy, rapid and sustained growth is a necessary -- while not sufficient -- condition for the achievement of social equity. However, in order to enjoy a dynamic increase in trade, a nation must have good partners. The APEC member economies are our partners.

Four APEC members -- the United States, Mexico, Canada and the Republic of Korea -- have already concluded free trade agreements with Chile, as we work to become one of the area's most open and internationalized countries. This effort has endowed our citizens with substantial economic and social benefits, which we would like to see extended to the other countries of our subregion, through more active participation in the dynamic trade flows with Asia-Pacific economies, thus expanding commercial and investment opportunities in both directions.

The slogan for APEC 2004 adopted by Chile, "One Community, Our Future," signals that in spite of our great diversity in cultural, social and political matters and our differing levels of development, APEC's member economies must work together as partners to advance toward a community based on sustainable development. The future handed down by each of us to the coming generations will depend on this effort.

APEC members have achieved highly impressive results in recent years. As an economic forum, the organization has made a significant contribution by encouraging its members to adopt policies aimed at trade liberalization and openness, while also implementing strategies for economic and technical cooperation.

Chile shares with other APEC members the vision and objectives set forth by our Economic Leaders in Bogor and Osaka, and we will expend our most concentrated efforts to move this process forward during 2004.

Our country believes in open regionalism and supports the multilateral trading system. APEC has played an important role in reducing barriers and facilitating the growth of trade and investment in the region. The resulting increase in commercial exchanges and investment has placed all APEC members, including Chile, in an excellent position to benefit from the greater opportunities which are now unfolding.

Under the main heading of "One Community, Our Future," Chile has identified a number of priorities for 2004:

I would now like to speak briefly about each of the subtopics corresponding to the priorities mentioned above:

"A Commitment to Development through Trade and Investment"

APEC provides leadership on many of today's global economic issues. Our advances in opening regional trade have made a notable contribution to the growth of the world economy, and APEC has become a catalyst for the liberalization of global trade.

Economic integration is crucial to the future prosperity of the APEC region. We must therefore work to establish an open, equitable and transparent trading system. Success in negotiations for the Doha Development Agenda will be closely linked to the strengthening of capacity-building efforts.

Worthy of mention in this area is the Capacity Building Group workshop scheduled for this SOM I, involving OECD and World Bank specialists.

APEC has demonstrated the necessary resolve to embark on the Doha Development Round. We cannot now permit the multilateral trading system to fail. Our economies´ work within the WTO will be crucial for APEC during 2004. If the Doha Round does not deliver results that are acceptable to all, the smaller economies will have lost their best vehicle for progress toward sustainable development.

However, APEC must also address new and significant trends in world trade, such as the rising number of bilateral and regional trade agreements. Chile supports the strengthening of the efforts initiated in Khon Kaen, Thailand, which were recently analyzed by the PECC at its Annual Meeting in Brunei Darussalam.

Achieving consensus in this area can give us a useful tool for strengthening integration schemes and ensuring effective compliance with the Bogor Goals. With respect to free trade agreements and their impact on trade liberalization processes among APEC members, we must reflect on the viewpoint of the private sector within APEC, as represented by ABAC. The members of this council have indicated that the number of these accords and the enthusiasm behind them pose serious challenges to the trade liberalization process originally envisioned within APEC, raising the question of whether the time has come to reexamine the voluntary nature of the Forum's commitments.

We wish to work with all of the Forum's member economies and with ABAC to develop a more productive peer review system for the Individual Action Plans (IAPs), in order to make the midterm review mechanism a more effective tool for assessing APEC's contribution to the WTO process and the Bogor Goals.

We must also fully implement the transparency standards agreed upon by the Economic Leaders, while continuing to work at the CTI level to put trade facilitation measures into effect during the year.

Protecting our communities from terrorism is a vital requirement for sustained economic growth and stability. Since the threat of terrorism is collective in nature, it calls for a collective response.

APEC has expended great efforts to achieve concrete results in the creation of a secure and favorable business environment. We are grateful for the work of the Counter Terrorism Task Force, and we call upon the business community to actively support capacity building programs as well as efforts to provide access to essential technologies to the developing economies, in order to maintain their economic growth and generate a secure environment for business within the APEC region.

The Second STAR Conference, to be held in Viña del Mar this Friday and Saturday, represents an initiative on Chile's part to achieve progress toward these objectives. It will particularly focus on the development of capacity-building programs to support implementation of the commitments adopted in response to the threat of international terrorism, along with financing alternatives for specific measures to promote secure trade in the region.

Access to knowledge and its effective management will be key factors for our economies' progress toward economic development and integration.

Education represents a strategic tool in the fight to eliminate poverty and to generate new opportunities for our populations.

The adoption of English as a business language within APEC will offer an important opportunity to integrate young people as well as microenterprises and small and medium-sized businesses into the trade flows which have transformed our region. We must encourage the use of English on a massive and global scale in order to link people together in their diverse economic activities, developing a long-term plan to equip our entrepreneurs and our populations in general with this useful tool.

This initiative is presented as a logical continuation of the commitment made in Brunei Darussalam in 2000, to triple our communities' Internet connectivity levels by 2005.

Without a significant effort in this area, which must be undertaken by the business community and our governments, the lack of a common language will remain a barrier to trade.

During our APEC year, Chile will also promote a more digitalized economy by supporting expanded efforts to teach mathematics and sciences, as well as the English language, to the young people of our region.

"Opportunities for Entrepreneurial Expansion"

We must expand and strengthen the opportunities for microenterprises and small and medium-sized businesses in the APEC region. The central aim of this dynamic sector is no longer the establishment of best practices, but the creation of a sense of community that will help them take the lead in meeting the rising demand for goods and services.

During the coming year, Chile will undertake special efforts to identify new financing options for small and medium-sized businesses, in order to help them to participate more effectively in the overall flow of trade within APEC.

"Growth and Stability: Keys to APEC Integration"

The recovery of the world economy has improved the outlook for higher growth in our region. Chile is quite optimistic about the prospects confronting APEC today. However, this optimism must not lead us into complacency. We must continue to work with determination, and in coordination with ABAC, to ensure that our members maintain balanced fiscal and monetary policies, in pursuit of financial stability and sustainable development. We are confident that our Finance Ministers will hold productive discussions in this area during the year, as they seek to provide a stable macroeconomic environment for economic development.

"A Commitment to Sustainable Development"

This year, with activities such as the First Meeting of Ministers Responsible for Mining, the Third Tourism Ministerial Meeting and the Oceans Strategy Meeting -- this last to be held on Easter Island -- we aim to strengthen APEC's commitment to development through the rational use of natural resources

The present year will be a crucial period for the multilateral trading system, and thus also for APEC.

Chile's Presidency coincides with what is expected to be the last phase of the Doha Round. APEC can -- and must -- redouble its efforts in support of the successful conclusion of these negotiations.

Chile is currently committing its greatest energies to the pursuit of this aim, which will only have a favorable chance for success if we work together within APEC to achieve it. This Forum has long served as an advocate for the liberalization and facilitation of trade and investment, and we must remain consistent with this standpoint and this history.

Chile is a country willing to take risks. We support a more active role for businesspeople within a revitalized APEC that has room for all while maintaining its capacity for effective action. At the same time, we must not lose sight of this Forum's objective, which is no more and no less than improving the quality of life for the inhabitants of our member countries and economies.

This will be a very dynamic year, characterized by great challenges, but I am confident that with the effort and dedication of every one of us, we will continue to make progress toward the fundamental objectives we have all been aiming for, the objectives which have guided this Forum during all of the years of its existence.

Thank you very much.