7th Energy Ministers' Meeting

Honorable Ministers,
Excellencies and ladies and gentlemen,

On behalf of the APEC Secretariat, I wish to thank you, Mr. Chairman, and the hosts of this ministerial meeting for your meticulous preparation and the warm hospitality.

The 7th Energy Ministers' Meeting is quite timely since it is being held in the midst of the highest oil prices the global economy has ever faced. The dynamic economic and social development of this region has been powered by the sustained supply of energy.

APEC's 21 Member Economies account for 60% of global GDP, are responsible for around half of total world trade and home to 2.6 billion people. The Asia-Pacific is also the most economically dynamic region in the world having generated nearly 70% of global economic growth in the first 10 years.

In the current climate of high oil prices, increased demand, low spare production capacity and heightened long-term supply concerns, the energy sector in our region faces significant challenges. These particularly relate to mobilising private capital and international financial resources to fund the estimated US$ 5.3 trillion to US$ 6.7 trillion in energy investments required in the next 30 years (from 2002 to 2030).

The challenges are complex, multi-faceted and daunting. The policy direction should focus on measures to increase oil production, enhance the security of oil supply, improve the efficient operation of the global oil market and promote energy efficiency and conservation.

I am confident that the outcome of this Meeting will lay solid groundwork for "Securing APEC's Energy Future", as is the title of the Ministers' Joint Declaration, and will produce sensible recommendations to the APEC Leaders' Meeting to be held in Busan next Month.

Mr. Chairman,

APEC 2005 has been guided by the overarching theme of "Towards One Community - Meet the Challenge, Make the Change" and a further series of sub-themes. Guided by these themes, a number of APEC events, ranging from working group meetings through to Ministerial meetings, have been held in the course of the year. In 2005 APEC has scheduled eight sectoral ministerial meetings covering the portfolios of trade, telecommunications, small and medium enterprises, oceans, finance, energy, and mining. Each of these ministerial meetings has made notable contributions to the APEC agenda, as we move closer to achieving our core goals of free trade and investment in the Asia-Pacific.

2005 marks a significant year for the APEC process in terms of policy challenges and as an important milestone for the APEC Process. I would like to briefly report on some of the more important developments of APEC 2005, as we enter the last quarter of this year.

One of the major issues is the much anticipated successful conclusion of the Doha Development Round of World Trade Organization negotiations. As the 6th WTO Ministerial Meeting in Hong Kong is scheduled next in December this year, APEC has worked for building a collective position on essential issues. At the meeting of APEC Ministers Responsible for Trade on Jeju Island in June, Ministers made a bold commitment to introduce deeper cuts on tariffs for non-agricultural goods.

Second, another key issue for APEC in 2005 relates to efforts to build increased transparency into the development of free trade agreements and regional trade agreements, or FTAs and RTAs. We have seen the proliferation of FTAs and RTAs recently and these agreements have become an integral part of our region's undertaking to achieve the APEC Bogor Goals. At the same time, concerns have also been raised that these agreements could potentially undermine the multilateral liberalization process. Over the past two years APEC has developed a series of best practices of FTAs and RTAs for use by Members Economies in order to ensure clarity of the process of undertaking FTAs and RTAs. This year APEC members are also working towards the formulation of model facilitation clauses in relation to FTAs and RTAs.

Third, 2005 is a particularly important year for the evolution of the APEC process as it marks the mid-point between 1989, the year when APEC was launched, and 2020, the year of the scheduled completion of the Bogor Goals. As such, an important part of the 2005 work program has been the Mid-term Stocktake of progress towards the Bogor Goals. Activities that have been undertaken in support of these goals include an assessment of past achievements and the setting of a roadmap for continuing regional trade liberalization and facilitation and capacity building. The Mid-term Stocktake will be one of the most important outcomes of APEC 2005.

Fourth, the ongoing task of confronting terrorism in our region remains one of the major issues for APEC in 2005. The recent attacks in Bali have again brought home the importance of vigilance and preparedness in dealing with the terrorist threat. The social and economic damage caused by terrorist strikes is enormous and APEC leaders, ministers and officials continue to devote significant time and resources to strengthen our capacity to protect our people and trade. We anticipate that Leaders will pay particular attention to the ongoing work of the APEC Counter Terrorism Task Force and the other counter-terrorism efforts taking place around the APEC process.

Fifth, the threat of an Avian Influenza pandemic is shaping up to be considerably important for APEC this year. The prospect of millions of fatalities around the world if, or perhaps, when the bird-flu mutates and is transmitted between humans is of great concern to our region. Preparations are underway for the implementation of collective action emergency response strategies to deal with health threats that have the potential to cross borders at will and cause incredible damage. These include pandemics and emergencies such as Avian Influenza, SARs and HIV/AIDS.

In addition to the areas that I have already mentioned, the 2005 APEC year will make significant progress in a number of other trade related areas. These include the institutionalization of anti-corruption measures in the APEC process, the introduction of strengthened action plans for counterfeiting and intellectual property piracy, secure trade, economic and technical cooperation and cross cultural communications. In this pivotal APEC year, the APEC process is also undertaking a review of our practices and the financial sustainability of our activities. This reform will enable greater efficiencies in the work and output of the APEC process. As part of this process Senior Officials have addressed three issues: ensuring financial sustainability, strengthening Ecotech activities and enhancing the efficient coordination of APEC activities. Thanks to hard work by the Senior Officials, Member Economies have reached consensus to increase their contributions from 2007, to empower the Ecotech Committee and to strengthen the project approval process.

Mr. Chairman,

I would now like to take a moment to look at the ways in which the APEC process has become increasingly attuned to energy related issues. As we become more aware that any energy supply disruption will harm our regional prosperity and growth, APEC fora have been placing renewed emphasis on the importance of sustainable energy strategies. In particular I would like to draw your attention to the outcome of the APEC Finance Ministers Meeting held in Jeju last Month, which addressed a number of issues that are also relevant to this meeting.

The concerns raised by Finance Ministers were in relation to the risks of sustained high energy prices on economic growth and development in APEC economies. In this context, ministers noted the "importance of adequate investment in oil production and refining capacity, as well as technology transfer for energy conservation and developing renewable energy sources."

Ministers also "welcomed recent actions to reduce demand-distorting subsidies and urged continuation of these efforts." APEC Finance Ministers also took note of the discussions at the G-8 and ASEM meetings and called for the dialogue between the oil producing and consuming countries to be strengthened through forums such as the International Energy Forum and the G-20.

Finally, Mr. Chairman,

I wish to turn to the excellent work of the APEC Energy Working Group or EWG. Since its inception in 1990 the EWG has addressed a wide range of issues to ensure regional energy sustainability. The EWG has played a catalytic role in successfully completing a large number of APEC projects that have made great contributions to APEC economic and technical cooperation program. From 1993 to 2005, the EWG completed a total of 125 APEC-funded projects, with a total value of around US$7.55 million. According to the APEC Secretariat's analysis, of the APEC-funded projects that were undertaken by the APEC's eleven working groups last year, the largest percentage of these were proposed and conducted by the EWG and Human Resources Development Working Group. These accounted for 13% of the total number of projects, and 13% and 12% respectively of the total value of Operational Account projects.

From this year, APEC capacity building projects may also be supported through the newly created APEC Support Fund. This serves as a flexible funding mechanism to meet the needs of APEC developing economies. Certainly, the EWG could harness this new financial system to support the work of energy cooperation.

I sincerely hope that the EWG will continue to play a vital role in taking the broad-based approach which was developed under the APEC Energy Security Initiative, or ESI, and the CAIRNS Initiative and APEC Action Plan to Enhance Energy Security that enhance the ESI.

The APEC Secretariat will continue to support the EWG and the Energy Ministers' Process the fullest of our capabilities.

Thank you.