APEC Priorities and Activities for 2005

1. It is my pleasure to be here today and to brief you on key topics concerning Korea's APEC year and their relevance to PECC. As you are already generally aware of APEC's activities, I will be concise. I will invite questions at the end of my presentation if there are other areas of APEC's work that you would like to discuss.

2. This year is hosted by the Republic of Korea. As a founding member of APEC, Korea has contributed to the development path of APEC. Now as a host of APEC 2005, Korea has set an ambitious plan to move APEC forward in building a regional economic community. This program of activities includes the Mid-Term Stock-Take and discussions of APEC reform. Looking at the the year ahead it is important to take a moment to look at the evolution of APEC in a historical context to better appreciate the challenges we face, and what we expect of the APEC process in the months and years ahead. These topics lie within PECC's purview, so I will make a few quick observations and then focus on what APEC is planning in the year ahead.

3. Since 1989, APEC has remained dynamic, evolving and changing almost with each passing year. To simplify, one could break this history down into a series of phases. In the first phase we were inventing APEC, and this really took off in 1993 when Leaders became involved, resulting in the vision of APEC community and the Bogor Declaration. This was followed two years later by the by the Osaka Action Agenda. In 1997, when the Asian Financial Crisis hit, APEC entered a period of uncertainty, as members wrestled with their own immediate financial problems, and collectively Early Voluntary Sectoral Liberalisation objectives did not meet expectations. By 2001, APEC had realized that advancing our goals of mutual economic prosperity depended on ensuring confidence and stability while responding effectively to other or new threats such as terrorism and health threats.

4. In recent years the world has witnessed the rapid process of globalization and growing interdependence. The current situation is not the same as 15 years ago with both the internal and external environment having changed radically. These changes have posed enormous challenges to APEC. In terms of external challenges there have been changes such as the proliferation of FTAs and RTAs in APEC region and as the APEC process reaches its mid term, there is increasing need to show credible progress to outside stakeholders. In relation to internal challenges, many issues could be named. These challenges include the need to enhance reform; ensure financial sustainability; and non-trade concerns such as human security related questions. As we have identified in 2005, key internal issues also include taking stock of the progress in relation to the Bogor Goals that were set by leaders in 1994 and mapping out a future course of actions, if any.

5. Against the backdrop of taking stock of the APEC process, the overarching theme and priorities of Korea have been moulded and endorsed by all Member Economies. APEC's theme for 2005, as announced by Korean Foreign Minister Ban in Santiago last year, is "Towards One Community: Meet the Challenge and Make the Change." Korea, as host of APEC 2005, plans to continue efforts to build an integrated economic community in the Asia-Pacific region. Underpinning this year's theme, three sub-themes were identified. These are: Renew the Commitment to the Bogor Goals; Ensure Transparent and Secure Business Environment; and Build Bridges over Differences.

6. To further elaborate, the following seven elements were selected as APEC 2005 Priorities. I would like to further elaborate each priority area to make these clearer:

7. First and foremost, APEC's priority for the year is in advancing freer trade. APEC will render strong political support for the WTO to produce an early and meaningful outcome in its DDA negotiations. The 6th WTO Ministerial Conference, or MC-6, is scheduled for December 2005 in Hong Kong, China. It is important to note that MC-6 will take place shortly after the 13th APEC Economic Leaders' Meeting (AELM) in Busan. There is great anticipation in the APEC process as Member Economies look to the Leaders' Meeting and Ministers Meeting in Busan, as well as the Trade Ministers' Meeting on Jeju Island in June, as well as other opportunities that are being coordinated with the APEC Caucus in Geneva, as timely opportunities for APEC to contribute to the WTO DDA talks. It is hoped that these APEC contributions will help WTO members reach agreement on the modalities of WTO DDA negotiations.

8. APEC will also renew its commitment to the Bogor Goals as it conducts its Midterm Stocktake (MTST) from which we expect a roadmap for future work plans will be developed. APEC members will also be continuing specific work as outlined under the Shanghai Accord and Santiago Initiatives. Under these initiatives, APEC continues to emphasize the importance of Trade Facilitation and Capacity Building, taking practical steps in many fields such as customs, business mobility and standards. Not only are APEC members making progress in their own economies, but APEC is setting a positive example for others in the global multilateral trading system.

9. This year, APEC will institutionalize its work on anti-corruption. A new task force has been created to develop a work plan to advance APEC's anti-corruption agenda. Korea is taking the fight against corruption very seriously and will share its experience and provide leadership in this area as APEC host in 2005.

Sharing Prosperity of the Knowledge-based Economy: Protecting Innovation and Expanding Digital Opportunity

10. This element covers a broad range of topics related to the Knowledge-based Economy (KBE) and enhancing APEC's agenda on innovation, science, technology. Key areas include continued work to improve Intellectual Property Rights (IPR) protection across the region, advancing the Brunei Goals of expanding access to the internet, and promoting policies that promote the growth as well as share the benefits of the digital economy.

11. Human security will remain a top priority in 2005. APEC members will continue efforts to fight terrorism, to mitigate health threats such as HIV/AIDS and avian influenza, to improve response capacity following natural disasters, and to explore ways to enhance energy security. Recent experience has taught us that such measures are essential for assuring the kind of safe and stable environment in which commerce can flow and our community can flourish.

12. APEC 2005 will continue work in these important areas, both to ensure that APEC's benefits are enjoyed as widely as possible, and to better integrate and tap the huge under-employed resource represented by these segments of our societies.

APEC Reform

13. APEC reform will be a critical topic in 2005 as it builds on initiatives started last year and works in concert with APEC's Midterm Stocktake. APEC will look at the core questions of coordination and institutional organization, as well as its financial sustainability and its longer term goals and structure.

14. APEC's efforts to build economic community enjoy the best prospects of success if they are built on a foundation of mutual understanding and a growing sense of cultural community. As host, Korea has introduced the Promotion of Cross-Cultural Communication as a priority in recognition of its importance in achieving the ambitious economic and political community-building goals that APEC has set for itself. As one practical measure that will add to the promotion of cross-cultural communication Korea is examining the possibility of holding an APEC film festival in 2005.

15. SOM I in Seoul launched an ambitious APEC agenda for 2005. This first meeting of the year saw APEC fora develop work plans building on previous work accomplished, incorporating new guidance from Leaders and Ministers, together with consideration of the themes and priorities set by Korea. A few highlights from SOM I include:

16. In direct response to ABAC's call for APEC to reinvigorate it's core trade liberalization, facilitation and capacity building agenda, SOM I took up The Santiago Initiative that had earlier been announced by Ministers. Senior Officals elaborated the work that fora and members will undertake as part of this initiative. On a related track, SOM, CTI and many CTI sub-fora continued working to support and advance WTO DDA negotiations, particularly in the area of trade facilitation where APEC has had comparative advantage. It is also encouraging that one particular liberalization priority for APEC this year is support for the WTO Services negotiations. SOM took steps to initiate work this year on the Midterm Stocktake, the Symposium of which will take place in May on the margin of SOM II. .

17. It was also notable that SOM endorsed an APEC Strategy on Natural Disaster Preparedness and Responses. Senior Officials empowered the SOM Chair to coordinate APEC members in times of emergency like the tsunami disaster which swept over the Indian Ocean at the end of last year. The meeting also established a virtual task force to advance work in this area and Senior Officials addressed various human security issues including those relating to energy and health security. The 3rd annual Secure Trade in the APEC Region, or STAR Conference, took place immediately before SOM I and addressed maritime and aviation security topics.

18. SOM also reached consensus that APEC should address issues of efficiency and financial sustainability of APEC. The SOM Chair established Friends Of the Chair Group, or FOTC, to examine in detail issues relating to APEC Reform. The FOTC consists of 8 members and operates 3 subgroups focusing on Efficiency and Coordination; Financial Sustainability; and Continuous Reforms. The Group is expected to make a progressive report at SOM II and final report at SOM III.

19. The SOM established an Anti-Corruption Task Force to develop and coordinate implementation of APEC's Anti-Corruption agenda. The TOR of the Task Force has been endorsed and a symposium on Anti-Corruption will be held in September. Senior Officials also agreed on a revised TOR for the Economic Committee accommodating a structural reform agenda. They also revised and adopted the mandate of the Counter terrorism Task Force. Regarding the agenda of culture, the SOM agreed to establish focal point networks for cultural cooperation.

20. Since the first SOM addressed a substantial agenda, we now have a long list of intersessional works that is being undertaken before SOM II and the MRT. In addition to this the issue of financial sustainability will be discussed at the upcoming BMC. Preparation is also underway for the FTA dialogue which will focus on how to apply the best practice guidelines for FTAs/RTAs. Members will also consider the elements to be included in the MRT statement.

23. As unique tri-partite organization comprising Government, academia and business circle, PECC has played a critical role with respect to APEC's primary work areas since even before APEC was established. PECC has provided intellectual content and constructive criticism in areas such as trade and investment liberalization and facilitation, as well as input for initiatives concerning financial markets and the work of Finance Ministers. The active participation of PECC representatives at every Senior Officials Meetings is highly appreciated and signifies the closest partnership between our two forums. Indeed, APEC has benefited from PECC's high quality analysis that has assisted policy debates and discussion at both the regional and individual economy level.

24. To go in details, the PECC Trade Forum has successfully focused on specific issues such as agriculture, competition, services, and trade facilitation in their relevant contexts. These include the WTO, APEC and particularly Regional Trading Arrangements. Secondly the Finance Forum has concentrated on helping to enhance and sustain financial stability as well as economic dynamism in the region. Finally, the Community Forum aims to identify and promote opportunities for partnerships and may also facilitate their implementation.

25. Now, I wish to touch upon a few practical expectations from PECC's activities. Considering that PECC's core mission is to help identify new options for policy makers, to give business a forum to present their views on opportunities and challenges in the development of these partnerships and to help progress its research agenda, PECC has made many important intellectual contributions to APEC over the years.

26. PECC has already produced a paper on the Midterm Stocktake, or MTST. There are divergent views on how to take stock and map out APEC's future development. In my view, the exercise of the MTST should be forward-looking rather than concentrating too much on the past. We need to recognize the reality of APEC's operational modality based on voluntarism, flexibility and consensus. Innovative thinking is required to determine whether and how to carry out future peer reviews. Consideration should also be given not only to the Bogor goals but also to the period beyond these 2010 and 2020 goals.

27. The issue of APEC Reform is an important topic to discuss today. This may be seen as a perennial favourite topic, but the situation for both APEC as a forum and for APEC Member Economies is a constantly shifting field. We have already noticed different interpretations of reform, depending upon the given situations and divergent ambitions of each member. In my view, the reform agenda should comprise three large clusters of issues such as policy reform, institutional reform and financial reform. All of these are inter-related and cross-cutting and they can not be dealt with separately, but in holistic manner. I sincerely hope PECC will contribute ideas, feedback, and perspective to this important issue.

28. In closing, I acknowledge the significant financial constraints facing both PECC and APEC. At all levels, including as a forum, in Member Economies and at the Secretariat APEC it is taking these issues seriously and taking appropriate action. As a partner, I hope that PECC will also devise workable mechanisms to deal with this similar challenge. Added to this we are also faced with serious challenges relating to how we design APEC's future course and whether we continue dialogue on liberalization and facilitation or develop a robust foundation for a true regional community. To overcome these difficulties, it is imperative that we reinvent ourselves to remain relevant and add value. As a vital intellectual contributor to this grand process, I hope you will rise to the challenge of helping us to visualize and articulate the kind of community towards which we will strive, and help us to articulate which steps might help us get there.

Thank you very much.