3rd APEC Secure Trade in the APEC Region (STAR) Conference

Ambassador Kim Jong Hoon, 2005 SOM Chair,
Ambassador Benjamin Defensor, Chair of CTTF,
Director General Kim Won-Su,
Distinguished delegates,
Ladies and Gentlemen,

It is a great honour for me to speak on behalf of the APEC Secretariat at this important gathering. At the outset, I would like to extend my deep appreciation to the Government of the Republic of Korea for the excellent preparation of this event.

The STAR Conference is one of the most significant events in the early part of APEC's busy annual calendar. Faced with unprecedented terrorist actions, APEC has set a clear priority to enhance the safe flow of goods and people by improving measures to protect ships and aviation.

In 2001 APEC Leaders met in Shanghai, China one month after September 11, and described international terrorism as "a direct challenge to APEC's vision of free, open and prosperous economies, and to the fundamental values that APEC members hold." APEC Leaders have also shown firm commitment and unity in combating international terrorism to promote trade and a secure environment.

To coordinate APEC's broad counter-terrorism agenda, the APEC Counter-Terrorism Task Force, or CTTF, was established in 2003. The role of the task force is to identify and assess regional counter-terrorism needs, coordinate capacity building and technical assistance programs, and cooperate with international and regional organizations on counter-terrorism issues.

This year, the CTTF has a new Chairperson, General Benjamin Defensor. Appointed by the President of the Philippines, he is a 4-Star General and former Chief of the Armed Forces of the Philippines with wide expertise on counter-terrorism issues. I am sure that with his leadership the CTTF will continue to accomplish the sensitive tasks requested by Leaders and Ministers.

It is crucial to deal with terrorist threats for a secure and stable business environment in the APEC region. First and foremost, there is the tragic human cost as lives are cut short and families devastated by death and injury. Then there is the tremendous economic cost as productivity is lost, business confidence plummets and the costs of repairing the damage reach amounts that would have been unimaginable in the past. Increases in insurance costs alone can be crippling for many industries.

Looking at some specific figures, research by the International Monetary Fund has estimated that the loss of US output resulting from terrorism-related costs could be as high as 0.75 per cent of GDP or US$75 billion per year. A study by the RAND Corporation in January this year estimated that if a commercial aircraft was shot down in the United States by a terrorist using a shoulder launched rocket, the total direct and indirect cost of this single incident could be as high as US$15 billion.

Across a broad range of sectors, APEC is already undertaking a number of counter-terrorism initiatives to ensure such damage is not inflicted upon the regional economy in the future. I will give you a few examples:

First, capacity building support is essential for the successful implementation of improved counter terrorism measures in all Member Economies. APEC Counter Terrorism Action Plans are one of the useful means used to identify where assistance is required in the region. These are prepared by Member Economies and provide a concise checklist of measures already undertaken as well as those which require further attention.

This year, the CTTF will undertake a rigorous cross-analysis of these Counter Terrorism Action Plans. The ultimate goal is to use APEC's extensive sectoral expertise to develop a regional set of concrete needs to which donors could respond. To enable Member Economies to better meet their needs and improve counter-terrorism capacity, APEC has also opened lines of communication and encouraged closer interaction with international financial institutions.

The Asia Development Bank Cooperation Fund for Regional Trade and Financial Security Initiative has been established with the support of APEC Member Economies. This will enable economies to obtain funding to undertake counter-terrorism related capacity efforts to enhance airport and seaport security, as well as to combat money-laundering and terrorism financing.

The second key area to the success of this regional cooperation is to enable the private sector to provide input to the policy development as well as policy implementation processes. At last year's STAR Conference in Chile, concerns were raised by the business community on the potential additional costs generated by increased security related measures. These concerns were then presented for consideration by Ministers at their November meeting and were incorporated by APEC Ministers in their 2004 statement. The STAR Conference is significant for enabling the voice of business to be heard in policy development.

This year's APEC STAR Conference gives us an excellent opportunity to exchange views on the relationship between improved regional security and the imperative of ongoing trade facilitation. Participation in the panels on Maritime and Aviation security measures will be particularly beneficial and we all look forward to a great deal of frank and open discussion.

Thank you.