APEC CEO Summit 2004

This year's CEO Summit attracted over 400 business leaders from across APEC, and more broadly from the Americas, Asia and Europe. Summit participants debated key issues facing the world, in parallel to the official meeting of APEC Economic Leaders, and they were addressed by many of the APEC Leaders who broke away from their own discussions to join in the lively series public-private sector discussions.

The 2004 APEC CEO Summit, with the theme "Succeeding in a Global World: New Challenges for Business", took place 19-21 November, in Santiago, Chile, on the margins of the APEC Economic Leaders Meeting. Unseasonal precipitation a few days earlier had crowned the Andes with snow, creating a majestic backdrop for this climax of Chile's year as host of APEC, and gave guests a taste of Chile's spectacular natural beauty.

Participants in the CEO Summit heard presentations from, among many others, President Ricardo Lagos of Chile, President Hu Jintao of China, Prime Minister Lee Hsien Loong of Singapore, Prime Minister Abdullah Badawi of Malaysia, Prime Minister Helen Clark of New Zealand, Prime Minister John Howard of Australia, President Susilo Bambang Yudhoyono of Indonesia, and President George W Bush of the United States.

In addition to getting to hear first-hand of Leaders' visions for the world, these influential figures from business also joined in panel discussions and did some power networking. And if networking with fellow corporate executives was not enough, they also joined many of Chile's elite for a state dinner with the assembled APEC Leaders and Ministers.

So, what do so many private and public-sector leaders talk about for three days? Summary reports of many of the sessions are available at www.apecceosummit2004.com and let us look at a few highlights here.

The Future of the Global Trading System
One prominent topic was "The Present and Future of the Global Trading System and Asia Pacific Regionalism", and the expert panel presented three compelling but dramatically different visions of how best to advance trade liberalization.

Stuart Harbinson, a Director in the World Trade Organization (WTO), argued for the importance of members maintaining their commitment to advancing ongoing WTO negotiations and strengthening the WTO as the institution to oversee the global trading system. He expressed concern that the proliferation of bilateral FTAs - as many as 300 by 2007 - are undermining the WTO negotiations, and argued that only a multilateral round could consolidate and rationalize these FTAs. He also asserted that what some have called a failure in Cancun was actually an important turning point. In Cancun, less-developed members adopted more assertive positions, which in the long run is critical to the sustainability of the WTO and the world trading system. Not only was this a positive development in itself, but the July package agreed in Geneva was better than anything that had been on the table in Cancun, and it had broader support.

Australian Trade Minister Vaile articulated the importance of competitive liberalization, as the sensitivities and levels of development of members affect how fast they are prepared to liberalize. Efforts to negotiate new trade agreements represent countries' desire to adopt a flexible, pragmatic approach in which they are not bound to move at a pace dictated by the slowest and most conservative. Minister Vaile stressed, however, that this approach leaves richer countries with a serious responsibility to help others with capacity building and ensure that poorer countries are not left behind.

The third approach was that of a Free Trade Area of the Asia Pacific (FTAAP). A study of this idea had been recommended by the APEC Business Advisory Council (ABAC), and Fred Bergsten of the Institute for International Economics and ABAC Chair Hernan Somerville argued this case. Bergsten argued that the risks and market distortion of an FTAAP would be far less than those associated with a network of poor-quality preferential trade agreements, that an FTAAP could reinvigorate APEC liberalization and facilitation agenda, and that the perceived competitive threat of an FTAAP would force the EU and other WTO members to redouble their efforts and reaffirm their commitment to the WTO.