APEC: making the vision a reality – Asia Pacific Economic Cooperation
Five years have passed since President Clinton invited leaders from the 18 Asia Pacific Economic Cooperation (APEC) member economies to meet for the first time at Blake Island, Wash. in 1993. The President’s goal in convening this meeting was to help provide APEC with a clear direction — to infuse it with a vision, making it relevant to the everyday problems of businesses doing business in the region. The APEC leaders embraced this vision, and called for a Pacific community based on shared strengths, shared peace, and shared prosperity, and have met annually to reaffirm their commitment to increasing economic cooperation aimed at sustained regional and world growth.
In the 1994 Bogor Declaration of Common Resolve, the APEC leaders agreed to a goal of free and open trade and investment in the region no later than 2010 for the industrialized economies, and 2020 for the developing economies. As a roadmap to achieving the 2010/2020 goals, APEC members have developed Individual Action Plans and Collective Action Plans. Additionally, APEC leaders set out an activist agenda for 1998 which includes — among other things — accelerated trade liberalization in 15 key sectors, a work program to promote the growth of e-commerce, and contributing to the ability of small- and medium-sized enterprises to do business in Asia. The cornerstone of APEC’s success has been active business participation. As we move forward on these new initiatives, continued business participation will be critical to ensure that the Blake Island vision becomes a reality.
APEC ‘s Origins
The Asia Pacific Economic Cooperation forum began in 1989 as an informal grouping of 12 Asia Pacific economies that saw a need for increased economic cooperation. Since then, APEC has grown into a formal institution that involves a wide diversity of economies in the region. APEC operates by consensus based on open dialogue, and with equal respect for the views of all participants. Currently, APEC consists of 18 economies: Australia, Brunei, Canada, Chile, People’s Republic of China, Hong Kong, Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, Chinese Taipei (Taiwan), Thailand, and the United States. Three more economies — Peru, Russia, and Vietnam — will become full members at this year’s APEC leaders meeting in Kuala Lumpur, Malaysia.
The APEC region is the fastest-growing economic region on earth and home to some of the world’s most dynamic market economies. APEC’s 18 member economies represented more than half of the total world income and more than 60 percent of global trade in 1996. As recently as 1980, the APEC economies accounted for less than half of trade with the United States. Over the last decade, the APEC region has surpassed Western Europe as the largest regional trading partner of the United States, both as a supplier of U.S. imports and as a customer for U.S. exports. United States trade with the Asia-Pacific economies in 1997 totaled over $1 trillion, roughly 65 percent of U.S. trade with the world. As a result of dynamic growth in the region, American exports to APEC economies, as well as imports from this region, have increased 70 percent since 1990. United States trade with the APEC economies has increased one-third more rapidly since 1980 than our trade with the world as a whole. These figures clearly indicate that the APEC region represents a vital part of U.S. economic interests.
Moving toward Free Trade
The 1997 APEC Leaders’ Meeting held in Vancouver, Canada, sent a strong message to the international community, signaling APEC’s unwavering commitment to free and open trade. Despite the emerging economic turmoil resulting from the Asian financial crisis, the APEC leaders agreed to liberalize trade in 15 key sectors. Referred to as the Early Voluntary Sectoral Liberalization (EVSL) initiative, nine of these 15 sectors were selected by the APEC leaders for early action with the aim of having market-opening measures ready for implementation in 1999. These nine sectors include chemicals, energy goods and services, environmental goods and services, fish, forest products, gems and jewelry, medical equipment and instruments, toys, and a mutual recognition agreement in telecommunications products and systems. For the remaining six sectors — which include fertilizer, civil aircraft, automotive, natural and synthetic rubber, food, and oilseed and oilseed products — leaders have asked member economies to develop proposals on market-opening measures for trade and business facilitation.
The EVSL initiative was the focal point of discussions at the June APEC Trade Ministerial meetings held in Kuching, Malaysia. Considerable progress was made in determining the tariff end rates for the first nine sectors and the general time frame for their implementation. Although many issues, such as specific import sensitivities, need to be resolved over the coming months, the United States is optimistic that APEC members will be able to finalize agreements in time for this year’s APEC meeting in November. Once these market-opening agreements become effective, U.S. companies can anticipate lower tariffs and freer trade in the region. Currently, combined intra-APEC trade in all 15 sectors represents close to $3 trillion.
APEC Harnesses Technology For the Future
In addition to increasing the pace of trade liberalization, the APEC leaders also sought to harness technologies to further economic growth and prosperity for the region. Recognizing the power of the Internet and the potential for global electronic commerce, leaders called for the development of a work program on e-commerce, which (1) recognizes the leading role of the business sector, (2) takes into account the ongoing work in other international fora (such as the the WTO and the OECD), and (3) provides a consistent and predictable legal framework that enables all APEC economies to reap the benefits of electronic commerce.
In response to these needs, an APEC Ad Hoc Task Force on e-commerce was created to begin work on developing an APEC e-commerce work program in time for the November meeting. The first phase of the task force’s work has focused on educating member economies on the various issues surrounding electronic commerce, and generally increasing members’ familiarity with this new medium. Next, the task force will move into more substantive discussions on the key elements of a work program which may include infrastructure access, building trust and confidence, and having governments become model users. Throughout the process, the business sector has played a prominent role in recommending key areas for discussion, and in maintaining the focus on concrete activities. As APEC moves forward in its deliberations, the continued participation of the business community will be critical to ensure that APEC’s e-commerce work program responds to the needs and concerns of business.
APEC Supports Small- and Medium-Sized Enterprises
APEC also aims to play an important role in preparing small- and medium-sized enterprises (SMEs) for free and open regional trade and facilitating their ability to build regional ties. Meetings of ministers charged with responsibilities for SMEs have sanctioned an action program focused on issues that provide both challenges and opportunities for SMEs: (1) human resource development, (2) information access, (3) technology and technology sharing, (4) finance, and (5) market access. The Commerce Department has coordinated the U.S. Government participation in APEC’s SME activities and has worked to expand the involvement of SMEs in APEC discussions. Our objective has been to build a public/private sector dialogue that will ensure the action program emphasizes activities that directly benefit SMEs.
The next meeting of SME ministers will take place on September 7-8 in Kuala Lumpur, providing a critical opportunity for SMEs to present their views and recommendations on the future direction of APEC’s work. In keeping with the vision set out at Blake Island five years ago, the ministers want APEC to be a vehicle that facilitates firms doing business in the region.
Getting Involved in APEC
The test of APEC’s relevance is its value to the business community. No other international organization relies quite so heavily on the direct participation of business in its activities. APEC needs business at its side doing what business does best: promoting efficiency and maximum returns, which contributes to economic growth. The Commerce Department eagerly welcomes your input and encourages your intense involvement in APEC’s work. Contact our APEC Affairs Office at tel. (202) 482-5334 for more information on how to become involved in the APEC process.
COPYRIGHT 1998 U.S. Government Printing Office
COPYRIGHT 2004 Gale Group