14th Meeting of APEC Ministers Responsible for Small and Medium Enterprises

Hon Fran Bailey MP, Chair of the 14th SME Ministerial Meeting,
Distinguished Ministers, Head of delegations, delegates,

Firstly I would like to convey apologies from Ambassador Colin Heseltine, the Executive Director of the APEC Secretariat, who is unable to attend this meeting.

I would also like to thank the government and people of Tasmania for the wonderful hospitality that we have received in Hobart. Tasmania is a place of great beauty and an economy that is clearly moving ahead.

It is my honor to have this opportunity to present, on behalf of the APEC Secretariat, an update of APEC's activities since the last Ministerial meeting held in September 2006, particularly as these activities relate to the strengthening of the Small and Medium Enterprises sector of the APEC region.

SMEs and micro-enterprises are important drivers of growth and social and economic development in the Asia-Pacific. They represent more than 95% of all enterprises and play an important role in providing jobs and generating income in our economies.

This is why APEC's efforts to promote open trade and economic cooperation seek to invigorate and to strengthen the development of SMEs.

A key priority for APEC continues to be efforts to strengthen the multilateral trading system so as to advance free trade and investment in our region.

To achieve these goals, ongoing support for the World Trade Organization remains the primary mechanism by which we aim to attain free and open trade. The current halt in DDA negotiations has posed a serious challenge for the global economy, and APEC Member Economies, accounting for half of total global trade and representing a diverse membership of developed and developing economies, has been at the forefront of efforts to find a way through the deadlock to see a successful conclusion of the round.

In another area of the multilateral trading system, the growth in the number of Free Trade Arrangements (FTAs) and Regional Trade Agreements (RTAs) are providing further mechanisms for strengthening the multilateral trading system and enhancing regional integration. Ten years ago, there were only three intra-APEC FTAs - now there are 20 and at least a dozen under development. In response to this increase APEC is working to ensure Member Economies have the tools and resources to develop more comprehensive, transparent and high-quality agreements. This has been through the development of a series of model measures that serve as a reference for APEC Member Economies in the negotiation of FTAs and RTAs. Six of these model measures were developed in 2006 and more are planned for 2007.

So long as negotiations are managed in a transparent and well planned manner ongoing regional economic integration efforts will ultimately deliver benefits to SMEs in that they help level the playing field for small and medium-size enterprises. Increasing regional economic cooperation opens new markets for SME products and services, creates new opportunities to source inputs to production and increases the sharing of information and skills.

Structural economic reform and trade facilitation are also high priority areas. APEC Member Economies are reducing behind-the-border barriers to trade and investment in order to make the international business environment less complicated and more transparent. For SMEs these structural economic reforms will create new opportunities and improve access to areas of the economy that were difficult for SMEs to be competitive in the past. Some of the most noticeable reforms will be in areas such as competition policy, public sector and corporate governance and strengthening the economic legal infrastructure.

Another important area of APECs work is in improving the human capacity and skills of people in the Asia-Pacific. This is an area that is particularly important for SME development. Supporting projects that increase cooperation between economies is a key component to our work, especially when it comes to opening markets and closing the digital divide. Ultimately, APEC's capacity building activities are working to bridge the gap between developed and developing economies.

APEC's human security agenda is particularly relevant to the business environment and SMEs. For it is typically the small businesses of our region that suffer the consequences when disasters, be these natural or man made, strike our economies. SMEs often do not have the resources to prepare for disasters and or the downturn in business that often results from such events. APEC Leaders, Ministers and Senior Officials have increased their attention to APEC's human security agenda.

However, increasing safety and security in our region has the potential to impose additional costs to business, and so APEC members along with the business sector, are working together to develop joint strategies and best practices to ensure both safety and economic efficiency.

The Fifth Secure Trade in the APEC Region (STAR) Conference that will be held in Sydney in June this year will focus on the development of effective public-private partnerships in taking a strategic risk-management approach to secure trade.

Looking more broadly at the APEC process, the increased development of government-to-business partnerships in our region is helping to reduce red tape, increase transparency and make business less complicated in a broad range of sectors.

The "Ease of Doing Business" workshop that was conducted by the SMEWG this week here in Hobart, with support from the Senior Officials' Steering Committee on Economic and Technical Cooperation and ABAC, could provide the tools to identify the ways to improve this public-private sector interaction. This was the first in a series of four capacity-building seminars on the ease of doing business in the APEC region. This workshop focused on the burdens of bureaucratic and legal requirements an entrepreneur must overcome to incorporate and register a new firm.

Trade promotion is another important element for the internationalization of SMEs. For small businesses to effectively trade across borders, the trade promotion activities of governments are particularly important. A comprehensive approach is required and this is an important part of the reasoning behind the Ministers' decision to incorporate the Working Group on Trade Promotion into the SMEWG. This poses new challenges and opportunities to streamline the work of APEC in promoting the development of SMEs.

Finally, one further area of APEC activity that is important to all APEC Ministerial Meetings, fora and committees, is the APEC reform agenda that is underway this year.

The 2006 Leaders Statement stated that reform was a high priority and that "APEC must continue to evolve in a results-oriented manner to meet new challenges and opportunities in a rapidly changing environment." Leaders therefore instructed Ministers and Senior Officials to further streamline the organization, to improve evaluation and coordination mechanisms and to develop more effective delivery mechanisms for policy initiatives.

Some of the reform areas that we will be focusing on this year include strengthening the role of the APEC Secretariat and establishing a research and analysis capability. This level of support from the Secretariat is necessary for APEC to be able to properly respond to the challenges posed by the global political and economic scenario, particularly in relation to SMEs.

I would like to commend the SMEWG and recognize the Chair for meeting this challenge and implementing the recommendations.

It is important for every APEC forum to ensure that its sectoral agenda is in line with the broader APEC agenda. If it is not, there will be a resulting perception of lack of clarity and purpose for APEC as an organization. Leaders and the people of the APEC Region expect that the work conducted here be comprehensive and deliver tangible outcomes in terms of growth and development.

This is an exciting year for APEC, and one that I am confident will deliver a great menu of results for Peru to build on in 2008.

I wish you success and hope this meeting will effectively help SMEs to expand their business and continue contributing to the socio-economic development and prosperity of our economies.

Thank you.