Media Briefing by APEC Secretariat's Executive Director
In his summary of key issues likely to be considered during the Leaders' Week, Ambassador Heseltine discussed APEC's continuing support for the WTO, efforts to better integrate the regional economy, structural reform, energy security and climate change, APEC's human security agenda and APEC reform.
The following is an extract from Ambassador Heseltine's presentation to the media:
APEC has had a very full agenda this year. We have been building on the outcomes from APEC Leaders when they met in Ha Noi last November at the 14th Leaders meeting, this one in Sydney will be the 15th Leaders Meeting.
The APEC agenda this year is very broad. If you look at the Web site you will see the huge range of activities that APEC deals with such as trade liberalization. As we continue to work towards achieving the Bogor Goals there's a very extensive agenda on trade facilitation, which is basically about making business easier and less cumbersome and less costly for business people. Then we have our Economic and Technical Cooperation program which is about capacity building, especially for the developing member economies of APEC.
We also have an active human security agenda which covers both efforts by APEC to plan or be prepared for any act of terrorism and also for pandemic disease health-related issues. And then finally there is the issue of APEC of reform - of making APEC itself more responsive and more efficient and more effective in the way it goes about its business.
It's a very large agenda and as the Australian Prime Minister said in a speech recently, much of the best work that APEC does is under the radar, in other words its work that does not necessarily make big headlines but is nonetheless very valuable. In fact, one of the Ministers at the Meeting of Ministers Responsible for Trade in Cairns, Australia, said that APEC doesn't make headlines but it does make money for business. By that she meant that APEC has done a lot to improve the business environment in the APEC Region. People and capital are moving more freely around the region and the APEC Business Travel Card is making airport facilitation for APEC business people much easier and speedier. There are much more efficient customs procedures, progress towards paperless trading, mutual recognition of standards and a whole range of other trade facilitation measures which are saving businesses in the region millions of dollars.
Another important point which I'm sure many of you aware of is that APEC is not a negotiating body like the World Trade Organization or like the UN Security Council in that it doesn't make binding decisions. It works on the basis of voluntarism and consensus, on what we call at APEC concerted unilateralism. It provides a forum for sharing experiences and developing advice and guidelines on best practice for making economies operate more efficiently and more effectively. This is important background to keep in mind when you look at the upcoming meetings in Sydney in early September.
The Leaders' meeting is the highlight of the APEC year. It's the one that is most visible and is the one that most people outside APEC focus on, but is not the only event during the year. Throughout 2007 we have had many ministerial meetings that cover different sectors of interest to APEC member economies. During this year in Australia we've had sectoral ministerial meetings on mining, Small and Medium Enterprises, transportation, energy, health and trade, and of course finance ministers quite recently. So all of these ministerial sectoral meetings consider pertinent issues relating to their sector and all of this feeds into the leaders meeting. So again I want to convey the idea that while the Leaders' meeting is a highlight and the big event of the year, there is a lot of work that goes on during the year leading into that.
The final general statement I'll make before I get on to the actual priorities is that APEC's objectives in 2007 are pretty much the same as they were when APEC was formed in 1989. There are based on what we call the three pillars of APEC:
- The first pillar is trade liberalization which is support for the multilateral trading system, the WTO and the Bogor Goals to achieve free and open trade in developed economies by 2010 and developing economies by 2020.
- The second pillar is trade facilitation which is about making business easier and cheaper for business people in the APEC region.
- The third pillar is economic and technical cooperation.
Now what are the priorities that will be focusing on - I will probably mention five or six.
The first one, and I anticipate this will be very much on the minds of Leaders when they meet, is the continuing support for the WTO and the multilateral trading system. I think all of us in APEC agree that the best trade agreement that you can possibly get is one that includes every economy or every country in the world. So the WTO for APEC member economies is still the best way to achieve our trade liberalization goals. But as you know, the current round of WTO negotiations, the Doha Development Agenda Round has met with some very difficult challenges and reaching agreement has been very difficult.
In Sydney APEC Leaders will be looking at what they can do in terms of trying to push the Doha Round of negotiations forward to achieve some progress. Just recently in early July APEC Trade Ministers met and they issued a very strong statement in support of a successful conclusion. So this will be one of the important priorities in Sydney in September. At this stage it's not clear precisely what form that statement will take, negotiations are going on in Geneva during this current period and so just precisely where APEC can fit in and what it can do I think we'll just have to wait and see. The WTO Director, Pascal Lamy, is in fact expected to be in Sydney to attend the APEC Ministerial Meeting.
The second priority for APEC and for Leaders this year relates to the fact that last year in Ha Noi when they met, leaders tasked officials and ministers to submit a study or a report to them in Sydney on how we can better integrate the APEC regional economy. This included the consideration of a free trade area in the Asia-Pacific as a long-term prospect. This report is now in the final stages of being drafted and will be submitted to Leaders in Sydney.
I think one of the things that the study has encountered as it has done its work this year is that there are many ways in which regional economic integration can be accelerated and intensified. A free trade area or free trade agreement in the Asia-Pacific is just one of the measures that can be taken and we all recognize that it is a long-term prospect. There will not be a free trade area in the Asia-Pacific in the next year or two, it is something that will take a long time to happen.
But there are many other practical measures that can be taken which will accelerate the process covering trade and business facilitation, cooperation on behind-the-border issues, structural reform and greater integration of financial markets and this is something that finance ministers looked at a few weeks ago when they met in Australia. There are many sectoral areas such as communications and transportation where we can do more to intensify the process of regional economic integration. I expect the study and the decision by Leaders on what to do next will be important aspects of this year's meeting.
The third priority area I'll mention is that of structural reform or what we call behind-the-border issues. This is one of the areas that APEC can make some real gains for our economies and for our business people, particularly as this relates to the area of domestic structural economic reform. Business people in the region keep telling us that yes, reducing tariffs is extremely important, but it's not enough on its own if we want to generate more efficient and effective business.
What we need to do is look at what goes on inside regional economies, what we call behind-the-borders, to contrast with tariff issues which happened at the Borders. These are things that happen in the economies themselves and they touch on a whole range of issues including regulatory reform, competition policy, corporate governance, public sector governance, and the strengthening of legal infrastructure. The question might well be asked as to the importance of these action as these might well be issues that economies should attend to on their own.
A recent study that was done in the Australian National University highlights the potential value of these reforms. While this was theoretical research, it found that if we had comprehensive structural reform in the APEC economies under evaluation, this could be worth something on the order of US$107 billion per annum in additional income to these economies; so US$107 billion per year in additional income for these APEC economies.
Now, as I say, this was theoretical research but I think it does give an indicator of the value and importance of this sort of work. Even if we had a successful outcome on the Doha Round of WTO negotiations there are very important and huge gains to be made, but the modeling work there suggests that would be to the order of something like US$30 billion. Still a very important gain, but if you look at this other figure of US$107 billion, which admittedly is a long term objective, it gives you an idea of why business people are telling us that they would like to see these reforms.
The fourth area that I'll mention, which is something that has come to prominence this year, is that of energy security and climate change. The whole issue of clean development and sustainable development, the environment and climate change. APEC has been looking at these issues over the years but I think this is the first time that APEC Leaders have put it right up to the top of their list of priorities.
APEC accounts for something like 60% of world energy demand and this is expected to double by 2030. Two or three of the world's largest emitters of greenhouse gasses are APEC members and we also have several major energy producers. As such I think the APEC group of economies is very much at the centre of world interest in the climate change issue.
The Chair of the APEC leaders' meetings this year, Prime Minister Howard of Australia, has said that he would like to see APEC leaders help design a new approach to climate change that would include all major emitters. He mentioned a number of principles that this could be built on it including respect for the fact that each economy or each country has different circumstances. Their energy sources are different, their resource endowments are different and of course they have different development needs. Developing economies will see themselves as having quite different needs from the developed wealthier economies.
The second principle is reliance on practical and cooperative action on emissions reduction. The third area is the development of a more bottom-up approach to national commitments rather than having commitments imposed from the top, perhaps a bit like the way Kyoto has done, but something which comes from the bottom-up from individual economies.
I think it's in this area that APEC, with its approach of concerted unilateralism and voluntarism, can act and play a very important role in building aconsensus, as part of a global framework, and based on what individual economies can do and what contribution they can make. Because it's not a negotiating forum with binding rules, one would hope that it would be more convenient and easier to build a consensus within APEC which could then contribute to the work that is being done on climate change in other international organizations.
The fifth priority, I'll just mention this very briefly, there will be further consolidation of APEC's human security agenda which, as I mentioned earlier, includes such things as preparation for or mitigating the effects of a possible terrorist incident in the region. It also involves preparedness in the event of a pandemic illness or disease like bird flu and other things that are on people's mind. This is a relatively new issue for APEC, it has been around for a few years but not so long, and it remains one of our important priorities.
The sixth priority area that I'll mention, the last, are measures to strengthen APEC's institutional base. This is what we call APEC reform, so that if APEC is to continue to be able to deal with these big and evolving challenges we have to make sure that the organization is well set up to do that. So we've a number of measures this year to strengthen the Secretariat where we are now.
We appointed a Chief Operating Officer this year for the first time and we are endeavoring to professionalise or bring in greater professionalisation of the staff of the Secretariat. We are looking at a fixed term Executive Director. I am the Executive Director for this year because I am provided by the host economy and it is an annual rotating position. But there is a feeling among many APEC economies that, like other regional organizations, we should have an Executive Director who is there for a period of say five years or whatever is agreed so that we can properly and effectively and professionally manage the APEC Secretariat.
Another important area this year is to set up within the APEC Secretariat, a policy support unit. I believe this will be considered and presumably will be approved during Leaders' Week. At this stage we do not have the capacity to do any sort of analytical research, but following proposals, mainly by Japan and Australia, the funding will have to come from APEC Member Economies, we will set up in 2008 what we call a policy support unit which is effectively a research analytical unit in the APEC Secretariat. So that will be quite an important change and it will increase the capability and the capacity of the APEC Secretariat to better support member economies.
So they are the six main priorities for this year. As I said at the beginning, there are many other issues which will be referred to and will be covered in both the ministerial statement and in the leaders statement, but what I have tried to do is just highlight the six which will be the key ones we are putting a lot focus on this year.