Op-ed: APEC is the sustainable engine of global growth
APEC’s 21 member economies are taking the next steps to practically address the impact of global uncertainties to keep the region on sound footing while promoting long-term growth based on free and open trade. They are propelled by the results of the recently concluded 2012 APEC Economic Leaders’ Week in Vladivostok, Russia.
At the gathering, Prime Minister Yingluck Shinawatra and other APEC Leaders revealed pathways for strengthening Asia-Pacific prosperity, emphasizing action-oriented cooperation among APEC members and stakeholders.
"Thailand is ready to play its part to ensure that APEC continues to be a sustainable engine of global growth,” Yingluck said. APEC Leaders echoed this sentiment and resolved to work collectively to restore confidence and support growth.
Russian President Vladimir Putin who hosted the gathering described this task as essential to ensuring the resiliency of the regional economy which generates over 55 percent of global GDP, almost half of global trade and around 45 percent of total foreign direct investment.
“The most important thing is that the Asia-Pacific region, as a larger region, despite well-known complications in the world economy, for the past 20 years has been growing at the quickest rate,” explained Putin. “This leading role implies shared responsibility.”
Trade and investment, and regional economic integration
Trade and investment expansion in the Asia-Pacific is central to the region’s growth, APEC Leaders concurred. While acknowledging the importance of the private sector, they noted, governments have an important role to play in guiding this process and setting the right conditions to enable businesses to flourish.
APEC Leaders agreed that member economies should lead the way by further lowering barriers and creating freer markets. Thus, they committed to reducing their economies’ applied tariff rates to five percent or less on 54 environmental goods such as solar panels, wind turbine blades and renewable energy electricity-generating equipment by the end of 2015.
By doing so, APEC will help encourage the development of clean technologies and green growth across the region.
“Next generation” trade and investment issues, including supply chain connectivity and transparency, were a focus of the APEC Leaders’ discussions. Among the tangible results was the launch of new APEC guidelines on transparency provisions in trade agreements.
At the same time, APEC Leaders reaffirmed their commitment to work towards the successful multilateral conclusion of the Doha Development Round by continuing to explore different, fresh and credible negotiating approaches. In particular, they said they remain firmly committed to advancing technical discussions on trade facilitation and other development-related issues as mandated by the 8th World Trade Organization (WTO) Ministerial Conference.
They also pledged to refrain through the end of 2015 from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing WTO-inconsistent measures.
Establishing reliable supply chains
APEC Leaders further agreed to deepen efforts to enhance supply chain connectivity.
In particular, they underscored their resolve to achieve an APEC-wide target of a ten percent improvement in supply chain performance by 2015 by reducing the time, cost, and uncertainty of moving goods and services through the Asia-Pacific region.
To help reach this target, APEC Leaders, among others steps, ushered in a more systematic approach to address existing supply chain chokepoints through targeted capacity-building.
A deadline in 2014 was set for APEC economies to complete work to make regional supply chains more reliable, resilient, safe, efficient, transparent, diversified and intelligent and therefore improve connectivity.
This can decrease costs for the region’s producers and consumers. It will also improve balanced growth and narrow the development gap among APEC members.
Strengthening food security
APEC Leaders took stock of growing challenges to regional and global food security, and the implications for the global economy.
The world population’s projected increase from seven billion at present to nine billion by 2050 means there will be a huge increase in the demand for food and water which make them strategic sources of growth and welfare, they explained
APEC Leaders noted that the Asia-Pacific also suffers from 70 percent of the world’s natural disasters, particularly floods, drought, earthquakes and sea level rise which pose a major threat to food security in the region.
To address these challenges and ensure regional and global food needs, APEC Leaders committed to increasing sustainable agricultural production, further facilitating trade and developing food markets, enhancing food safety, expanding food access for vulnerable groups and improving farmers’ welfare.
It also includes reducing price volatility, for example, by building on progress in implementing initiatives such as the Asia-Pacific Food Security Information Platform. This mechanism aggregates and shares data, research and best practices online to boost transparency and provides APEC members with the real world intelligence they need to better gauge the food security landscape and make more informed policy decisions.
Efforts in this area are being supported by APEC’s new public-private sector Policy Partnership on Food Security which provides opportunities for business to directly participate in conjunction with APEC officials, and offer their policy feedback and suggestions.
Intensive cooperation to foster innovative growth
Recognizing the importance of innovation to economic growth, prosperity and job creation, APEC Leaders advanced the development of effective, non-discriminatory and market-driven innovation policies and refined a vision of innovation cooperation and networking in the region.
APEC Leaders particularly encouraged further development of cross-border education cooperation and facilitation of exchange in education services within the region. Specific proposals put forward to facilitate the flow of students, researchers and education providers include course accreditation and quality assurance system best practice sharing and implementation, and further developing academic exchanges and joint research activities between and among universities in APEC economies,
Additionally, APEC Leaders agreed to build cooperation among government, scientists and business to promote innovation and address issues that impact specific innovative technologies, including through the newly established APEC Policy Partnership on Science, Technology and Innovation.
To support the growth and innovation capacity of small, medium and micro-sized enterprises (SMME), they also committed to continue building competitive, open and transparent business environments, assist SMME internationalization and strengthen market and financing access.
Taken together, these actions are significant steps towards achieving stronger, more sustainable and balance growth.
Ambassador Muhamad Noor is the Executive Director of the APEC Secretariat in Singapore.