APEC Russia 2012 Outcomes: Integrate to Grow, Innovate to Prosper

Russia hosted APEC for the first time since its accession in 1998. Vladivostok’s Russkiy Island on its Pacific coast was the venue for the 20^th APEC Economic Leaders’ Meeting.

Given the instability of the global economy, the key challenge for APEC members was to restrain protectionism while advancing towards the implementation of the Bogor Goals of free and open trade and investment in the Asia-Pacific region.

To accomplish this, the following priorities for APEC’s work in 2012 were adopted: trade and investment liberalization, regional economic integration; strengthening food security; establishing reliable supply chains; intensive cooperation to foster innovative growth.

I. Trade and investment facilitation, regional economic integration

In 2012, APEC focused on strengthening regional economic integration, enhancing foreign direct investment flows and advancing trade and environmental cooperation. Economies continued to address next generation trade and investment issues to strengthen FTAs/RTAs and take concrete steps towards the realization of a Free Trade Area of the Asia-Pacific.

APEC has also taken additional measures to reduce unnecessary barriers to trade by advancing regulatory convergence and coherence in order to achieve objectives such as stronger regional economic integration, product safety, supply chain integrity and environmental protection.

Noticeable progress was made by Finance Ministers in 2012 on advancing fiscal sustainability, developing treasury systems and domestic strategies for financial literacy in APEC economies.

Key outcomes:

• Strengthening transparency of the trading environment. The APEC Model Chapter on Transparency for RTAs/FTAs was endorsed in 2012 and recognized as a valuable input in APEC’s aspiration for achieving the Bogor Goals and facilitating further convergence of RTAs/FTAs in the region;
• Promoting green growth. In 2012, APEC developed and endorsed the APEC List of Environmental Goods that directly and positively contribute to green growth and sustainable development objectives;
• Contributing to liberalization of trade in services. The Action Plan on Statistics on Trade in Services was endorsed providing for an overarching framework for APEC’s work to improve the collection and quality of services statistics in the region;
• Enhancing stability of investment environment and protection of investments. In 2012, APEC made further steps to enhance mechanisms for dispute avoidance and resolution by developing a guidebook on best practices on the dispute resolution mechanism;
• Advancing structural reforms agenda. It was agreed to submit a mid-term assessment report in 2013 to track progress of the implementation of the APEC New Strategy for Structural Reform;
• Ensuring long term fiscal sustainability. Concrete steps were agreed to be taken to make sure the region’s public finances are sustainable in the long term, while also acknowledging the need to support members’ recoveries.

II. Strengthening food security

On various occasions in 2012, including the Meeting of APEC Ministers Responsible for Food Security in Kazan, Russia, APEC economies reaffirmed the importance of ensuring regional and global food security.

The APEC agenda focused on elaborating measures to raise agricultural production and productivity, promote trade and food markets development, enhance food safety and quality, improve access to food for vulnerable groups, ensure sustainable management of marine ecosystems and to combat illegal, unreported and unregulated (IUU) fishing and associated trade.

Key outcomes:

• Achieving sustainable agricultural growth by creating an enabling environment to encourage increased public-private partnerships in different spheres, including in the field of foreign direct investment and dissemination of best practices on responsible agricultural investment;
• Raising  productivity in agriculture by adopting innovative agricultural technologies, including biotechnologies, significantly increasing long-term investment into agricultural research, strengthening of research institutions and innovation centers in APEC economies, and developing interaction among them through regional network;
• Establishing and developing food markets and countering protectionism by effective monitoring to enhance their transparency and predictability and to mitigate food prices volatility, developing food markets infrastructure, improving the operation of food supply chains and reducing post-harvest losses;
• Strengthening the partnership of the public sector and business circles in addressing the issues of food security, including cooperation within the framework of the Policy Partnership on Food Security – their inaugural meeting was held in 2012 in Kazan, Russia;
• Supporting the activities conducted by the Food Safety Cooperation Forum, improving domestic systems on food safety control and harmonizing domestic regulations on food safety and international standards, and enhancing the capacities on preventive control measures;
• Developing dialogue and cooperation on improving access to food for vulnerable groups, exchanging best practices in this field, including best practices on social and school  feeding;
• Elaborating recommendations on sustainable management of marine ecosystems, enhancing bilateral and multilateral cooperation on combating IUU fishing and associated trade, developing interaction and exchange of information on IUU fishing with regional fisheries management organizations, and improving management and sustainable aquaculture practices.

III. Establishing reliable supply chains

APEC economies reaffirmed their commitment to achieving an APEC-wide target of a ten percent improvement in supply chain performance by 2015.

To establish the most efficient network of supply chains, it was decided to continue discussions with all stakeholders on possible alternative transportation routes in the region. Diversification of routes can have a significant economic effect in terms of lower transportation and transaction costs, thereby reducing the price of goods for consumers and creating new jobs in related industries.

Due to vulnerability of economies to natural and man-made disasters, importance was attached to taking preventive measures, raising the level of emergency preparedness and resilience, and strengthening scientific and technical cooperation in this area among APEC economies, communities and businesses. Support was expressed for strengthening of public-private partnerships, elaboration of common standards for emergency early warning systems in cross-border transportation, and further development of cooperation to enhance emergency preparedness and response among crisis management centers (CMCs) in APEC economies.

The need was emphasized to establish stricter control over movement of bulk and liquid cargo and dangerous goods and materials, including by the means of wider exchange of information and capacity building of local and regional sub-suppliers of transportation and logistics services.

Further optimization of customs procedures in APEC economies was recognized as an urgent task.

It was decided to further discuss the issues related to technological improvement of supply chains in order to make them “greener”, more developed, efficient and “smart”.

It was stressed that terrorism is a serious threat to economic growth, security, stability and reliability of supply chains in the APEC region. Therefore, the commitment to the APEC Consolidated Counter-Terrorism and Secure Trade Strategy was reaffirmed.

IV. Intensive cooperation to foster innovative growth.

In 2012, APEC economies coordinated efforts on practical implementation of the APEC Growth Strategy through adoption of policies that foster an enabling environment for innovative growth. Common measures were elaborated to encourage cultivation of innovations, maintenance and development of high-tech investment, enhancement of cross-border networking of innovation centers, universities, research institutions, cooperation in the field of science and technology, and identification of possible areas of scientific and commercial cooperation. Further fostering of regional innovative integration is vital for improving local scientific and technological capabilities and narrowing the growing gap in the innovation capabilities among APEC economies.

Key outcomes:

• The Policy Partnership on Science, Technology and Innovation was established as a unique dialogue platform bringing together all interested parties and expanding the role of business and academic circles;
• The Innovation Technology Dialogue was created to discuss issues related to pre-commercialized technologies and to share the prospects of development of relevant markets;
• Deeper educational cooperation and cross-border trade in education services among APEC economies was recognised as a key to promoting human resources development, bridging the development gap, enhancing regional competitiveness, and achieving sustained economic recovery and development;
• The meeting of chief science advisors from APEC economies was scheduled for 2013 to network and discuss scientific issues important to the region, thus reinforcing science relations at a senior level across the Asia-Pacific region;
• Special attention was paid to the issues of human capital in APEC economies, including the support for sufficient life-long investment in heath and healthy lifestyle;
• Further active economic involvement of youth and women across the APEC region was recognized as crucial for innovative economic development and business expansion.

V. Other key initiatives:

Strengthening energy security

A commitment was affirmed to continue work on enhancing stability, efficiency, predictability and transparency of the energy markets in APEC economies.

The importance of raising the share of natural gas in the APEC energy mix was agreed as a means to transition to a low carbon economy, since natural gas is the most widespread environmentally clean fossil fuel. The task was set to study prospects of shale gas production and its impact on the environment, and market opportunities of this and other types of alternative fuels.

It was stressed that to strengthen energy security it was necessary to make constant investments in energy infrastructure, including gas liquefaction capacities.

The significance of nuclear power as a clean source of energy was emphasized, as well as the need to strengthen security of nuclear power plants and raise the relevant standards.

Energy security is closely related to raising energy efficiency, reducing power-intensity and developing low carbon economies. Therefore, APEC members will continue to lower their aggregate energy power-intensity by 45 percent by 2035 while elaborating an APEC Action Plan on green growth. The need was stressed to take into account the recommendations of the APEC Innovation Technology Dialogue on Nanotechnologies for Energy Efficiency and to fulfill the task that was set at the 2011 APEC Transportation Ministerial Meeting, to develop energy efficient means of transportation, including public and railway transport, and to develop cars running on gas and electricity in order to reduce dependence on oil and green-house gas emissions.

Fighting corruption

Since corruption feeds illicit trade and undermines security while creating serious obstacles for economic growth, a firm commitment was made to fight corruption in the interest of transparency in the APEC region. This is also to ensure the safety of citizens and facilitate the development of economic and investment cooperation among APEC economies. A goal was set to ensure openness in the work of public authorities, to reduce, where possible, administrative restrictions envisaged by the domestic legislation of APEC economies and to strengthen legal measures aimed at fighting bribery.

The contribution of the APEC Business Advisory Council to the fight against corruption was noted. The role of public-private partnership was stressed in elaborating a code of conduct for the private sector and measures to fight corruption, including strengthening of the ethical norms of interaction among governmental structures, commercial structures and other participants in business communication.