CTI’s work program is organized around four priority areas under the 2017 APEC theme “Creating new dynamism, fostering a shared future.”
Its 2017 priorities include:
- Support for the multilateral trading system
- The Free Trade Area in the Asia Pacific (FTAAP)
- GVC Cooperation and Development
- Next Generation Trade and Investment Issues
- Environmental Goods and Services/Green Growth
- Trade Facilitation/Supply Chain/Connectivity
- CTI and sub-fora streamlining
- Cross-Fora Issues
An overview of the work of CTI and its 11 working groups, the dialogues, initiatives and achievements made so far are encapsulated in the 2016 CTI Annual Report to Ministers endorsed at the 28th APEC Annual Ministers Meeting in November 2016.
For 2017, the CTI will continue to advance the CTI-related actions as directed by Ministers and Leaders in Lima, as well as those actions outlined in its 2016 Annual Report to Ministers.
A summary of CTI initiatives and achievements in 2016 include, amongst others:
Support for the Multilateral Trading System
CTI and its sub-fora continue to exchange views during meetings, on possible contributions they could make in support of the WTO, in part in response to outcomes of the 10th WTO Ministerial Conference (MC10) held in Nairobi in December 2015. There were several proposals aimed at complementing the implementation of multilateral trade agreements.
Economies were urged to ratify the WTO Trade Facilitation Agreement (TFA) adopted in November 2014, with the number of APEC economies having notified the WTO of their acceptance of the TFA reaching 19 out of 21 as of February 2017. The TFA was ratified and became effective on 22 February 2017. CTI and its sub-fora SCCP have been implementing various capacity building initiatives on trade facilitation and the importance of these capacity building activities are expected to increase in order to help economies implement the TFA.
Efforts have also been made to ensure implementation of the Information Technology Agreement (ITA) Expansion, which was agreed upon by participating members in 2016. The ITA, which requires participants to eliminate duties on IT products covered by the agreement, was expanded to include additional 201 products which were not originally included; new products that have entered the market, and products which have evolved and have different characteristics today. Expanding the Information Technology Agreement will ultimately ensure greater access and lower prices for consumers. The implementation dates of the tariff cuts are as follows:
- First set - 1 July 2016
- Second set – 1 July 2017
- Third set - 1 July 2018; and
- Effective Elimination no later than 1 July 2019
The Market Access Group (MAG) and CTI are to conduct regular follow-ups of the implementation of the ITA Expansion.
In addition to the above, there were several proposals/projects discussed and/or implemented at CTI which aimed at contemplating the implementation of the multilateral trade agreements.
Papua New Guinea submitted a proposal to encourage the implementation of the WTO commitments on export subsidy by establishing a systematic method for information sharing and exchange, which has begun this year in 2017.
Peru organized a workshop on Fisheries Subsidies in the margins of SOM3 2016 to prompt economies’ further understanding of the issue.
In two Investment Experts Group (IEG) intersessional meetings, the IEG, under CTI, engaged in active discussion through in the area of international investment agreements (IIAs), in collaboration with external stakeholders such as the APEC Business Advisory Council (ABAC), the Organisation for Economic Cooperation and Development, the United Nations Conference on Trade Development (UNCTAD), and the World Economic Forum (WEF).
Advancing Regional Economic Integration
Achieving the Bogor Goals
In 2016, the Second-Term Review of the Bogor Goals was conducted; CTI was the major fora to implement the review. Two reports by the APEC Policy Support Unit (PSU) were discussed, and subsequently agreed upon by Senior Officials and Ministers:
The reports highlighted a slowing of the growth of trade in goods in recent years due to structural elements, such as the development of global value chains; the pace of progress towards zero tariffs slowing down after 2010, despite the substantial reduction of tariffs from 1994 to 2015; the increase of the number of non-tariff measures (NTMs) applied and its growing importance; the marked increase of trade in services, especially developing economies’ importance increasing by time; and the aggravation of perception on the business environment. The reports provide a basis to identify areas to further focus and priorities to conduct work towards meeting the Bogor Goals.
Against the backdrop of the growing importance of NTMs, as stated in the report on the Second-term Review of the Bogor Goals, projects were implemented to address this issue in 2016.
At the sidelines of SOM3, the Dialogue on APEC Towards 2020 and Beyond was held. It looked to discuss APEC’s “unfinished business” from the Bogor Goals of 2020 and post-2020 scenarios that APEC must address. The aim is to discuss and develop a post-2020 vision that identifies and anchors itself in APEC’s unique added value, particularly in redefining and reinforcing APEC’s role. A self-funded workshop on import and export licensing was held in June.
In 2015, CTI discussed and agreed to establish the APEC Trade Repository (APECTR) as a one-stop online reference tool on trade-related regulations and other information for businesses, especially for the benefit of MSMEs seeking better access to international markets. Accordingly, the APECTR was developed and launched in November 2015 with the intention to provide trade-related information, including the following:
- MNF tariff rates;
- Preferential tariff rates;
- Rules of origin;
- Best practices in trade facilitation;
- Other trade measures;
- Domestic trade and customs/regulations;
- Procedure and documentary requirements; authorized economic operators and mutual recognition agreements;
- Domestic trade repository; and
- Export-related measures
The MAG is to continuously manage the APECTR and enrich the information provided through it.
A proposal on “Permanent Customs Duty Moratorium on Electric Transmissions, Including Content Transmitted Electronically” was discussed, the proposal aims provide a basis for economies to consider a permanent status to the customs duty moratorium on electronic transmissions.
The initiative is to be implemented as a “pathfinder,” which is an infinite approach for economies to participate on a voluntary basis.
Exploring an FTAAP
The Beijing Roadmap for APEC’s Contribution to the Realization of the FTAPP (or just the Beijing Roadmap), agreed on by leaders in 2014, is one of the core initiatives related to advancing regional economic integration. The Beijing Roadmap comprises of (1) conducting the Collective Strategic Study (CSS) on Issues Related to the Realization of the FTAAP, (2) implementing capacity building on FTAs/RTAs provisions, and (3) conducting information sharing on FTAs/RTAs. The CSS comprises of the following chapters:
Chapter 1 – Overview
Chapter 2 – Review of the APEC Region’s Economy
Chapter 3 – Next Generation Trade and Investment Issues
Chapter 4 – Measure Affecting Trade and Investment
Chapter 5 – Stocktaking of Existing RTAs/FTAs in the Asia-Pacific Region
Chapter 6 – Stocktaking of Initiatives and Outcomes relevant to an FTAAP
Chapter 7 – Update of Other Analytical Work
Chapter 8 – Ongoing Regional Undertakings
Chapter 9 – Opportunities and Challenges
CTI played a major role in drafting and discussing the CSS and its accompanying recommendations. The CSS was endorsed by leaders and ministers and finalized in November 2016. In addition, the recommendations were endorsed by the Leaders as the “Lima Declaration,” by which leaders instructed officials to work towards the eventual realization of the FTAAP.
Under the 2nd Regional Economic Integration (REI) Capacity Building Needs Initiative (CBNI 2) 2015-2017, capacity building activities for various FTA/RTA provisions have been implemented in order to nurture an understanding of these provisions with a view to contributing to regional economic integration. During 2016, a number of projects under CBNI were implemented. These include:
- Existing International Investment Agreements in the APEC Region, Relevance, Emerging Trends, Challenges and Policy Options to Address Coherence in Treaty Making (2 February, Lima, Peru);
- Scheduling of Market Access Negotiations in Services Trade and Investment (27 – 28 June, Seoul, Korea);
- FTA Negotiation Skills on Environment – Phase 2 (30 June – 1 July, Da Nang City, Viet Nam);
- Negotiations of Services Chapters under FTAs with a Negative List Approach (19 – 21 August, Lima, Peru); and
- FTA Negotiation Skills on Intellectual Property, Phase 2 (29 – 30 November, Ha Noi, Viet Nam).
In 2017, more CBNI projects have been or are expected to be implemented, including those that will touch upon the following:
- E – Commerce
- Completion Policy
Under the Beijing Roadmap, CTI has been implementing a number of information-sharing activities about FTAs and RTAs. In 2016, a trade policy dialogue (TPD) on the WTO—plus aspects of recently concluded RTA and FTAs—was held on 7 May 2016 along the margins of the Second Senior Officials Meeting in Arequipa, Peru. The TPD highlighted WTO-plus outcomes in APEC RTA/FTAs. This is done with a view to building support for high quality and comprehensive RTA and FTAs as potential building blocks for the realization of the FTAAP.
On 25 August 2016, the SOM Dialogue on RTA/FTAs was held in the margins of SOM3.
Global Value Chains
CTI has been implementing the APEC Strategic Blueprint for Promoting Global Value Chains Development and Cooperation (GVCs Blueprint) agreed by leaders in 2014, including projects and initiatives related the nine (9) work streams which are:
Work Stream 1 – Addressing Trade and Investment Issues that impact GVCs (United States);
Work Stream 2 – APEC GVCs and TIVA Measurement (China, United States);
Work Stream 3 – Realize the critical role of trade in services within GVCs (Australia);
Work Stream 4 – Enable developing economies to participate in GVCs (Indonesia, China);
Work Stream 5 – Assist SMEs to benefit from GVCs (Korea);
Work Stream 6 – Improve the investment climate for GVCs development (Japan);
Work Stream 7 – Adapt effective trade facilitation measures (Singapore);
Work Stream 8 – Enhance resiliency of GVCs (Japan); and
Work Stream 9 – Integration of Public Private Partnership and Dialogues in Work Plans.
In relation to work stream 9, CTI had agreed in 2015 that all lead economies should encourage and integrate public private partnerships and dialogues in their work plan activities.
Next Generation Trade & Investment Issues
Manufacturing-related services were designated as a Next Generation Trade and Investment Issue in 2014. In 2015 the Manufacturing-related Services Action Plan (MSAP) was endorsed by the ministers. As of 2017, further work is envisaged towards the review of the MSAP in 2018.
CTI has also been discussing and implementing issues related to Digital Trade—a potential Next Generation Trade and Investment Issue. In 2016, two trade policy dialogues on digital trade were held in order to enhance a better understanding of the current situation and the notion of digital trade among economies. In order to further advance the work on digital trade in 2017 and beyond, building on the work carried out this year, the United States proposed the “Next Steps for Advancing Work on Digital Trade in 2017” at the 2016 CTI3, which includes continuing robust trade policy dialogues with industry and other stakeholders, the development of a digital trade work program, sharing experiences and effective practices, and the establishment of targeted capacity building programs to expand and promote digital trade in the region. CTI agreed with the proposal.
Based on this, a Trade Policy Dialogue is schedule for CTI2 in May 2017 to discuss “Identifying Building Blocks for Facilitating Digital Trade.”
Environmental Goods and Services/Green Growth
Intensive work was done in 2015 to implement the leaders’ commitment to reduce applied tariff rates on the 54 products in the APEC List of Environmental Goods (the EG List) to five per cent or less by end of that year. It was done in accordance with the agreement reached in 2012 in Vladivostok. Updates were compiled and published on the APEC website in January 2016. Each economy agreed to publish detailed implementation plans, which serve to enhance transparency for business and other stakeholders on tariff reductions under the EG List. CTI continues to monitor the progress of implementing this commitment, with a view to realize its full implementation.
CTI has also been implementing the Environmental Services Action Plan (ESAP), endorsed by Ministers in 2015. As an initial part of Phase I, a survey was conducted by the PSU on Regulatory Measures in Environmental Services on various regulatory aspects of environmental services in APEC economies that are classified under CPC Code 94. Further steps to implement the ESAP are envisaged in 2017, including studies and policy dialogues to build and enhance common understanding of the role of a wider range of environmental services.
Contribution to MSMEs’ Integration into Global Regional Markets
Support for micro, small and medium-sized enterprises (MSMEs) has been a priority for APEC. This support is very important from the viewpoint of promoting inclusive growth and maximising the benefits of trade and investment liberalization and facilitation. CTI has been supporting this process through various initiatives and projects related to MSME’s internationalization. This includes:
- Promoting the participation of MSMEs in global value chains (GVCs)
- Contributing to the implementation of the Boracay Action Agenda
- Promoting E-commerce to globalize MSMEs
- Supporting industry initiatives
- Making a compendium on methodologies for SMEs internationalization
Advancing the Services Trade Agenda
In 2016, CTI discussed and advanced a number of issues related to services trade. Under the leaders’ instruction to develop a strategic and long-term APEC Services Competitiveness Roadmap (ASCR) in 2016, CTI served as a core forum in the drafting process of the ASCR. Regarding the implementation of the ASCR, the Group on Services (GOS) under CTI will monitor the progress, as mandated by Senior Officials.
In relation to the ASCR, on the basis of a proposal by Korea, works related to developing a set of non-binding principals for domestic regulation of the services sector is to commence in 2017.
In addition, discussions are currently being held on a proposal to develop indicators for measuring the regulatory environment of the services trade of APEC economies.
Strengthening Comprehensive Connectivity and Infrastructure
CTI and the Subcommittee on Customs Procedures (SCCP) continued to review the progress made on various initiatives to improve supply chain performance, including capacity building work to improve economies’ ability to prepare for implementing the articles included in the WTO Trade Facilitation Agreement (TFA).
Following the Capacity Building Plan to Improve Supply Chain Performance, which was agreed upon in 2014 to advance the systematic approach to the SCFAP, five projects funded by the APEC Supply Chain Connectivity sub-fund—through targeted capacity building to implement the TFA—are being implemented. These 5 projects are:
- Advance rulings
- Expedited shipments
- Release of goods and
- Electronic payments
A series of meetings of the APEC alliance for Supply Chain Connectivity (A2C2), an advisory group consisting of supply chain and customs experts from the public and private sectors, were held in 2016 in Lima, Peru.
Assessment of SCFAP I and establishment of SCFAP Phase II
The Supply Chain Framework Action Plan (SCFAP)—initiated in 2010 as a five-year action plan to implement the APEC-wide goal of achieving a 10 per cent improvement in supply chain performance in terms of reduction of time, cost, and uncertainty of moving goods and services through the Asia-Pacific region—concluded at the end of 2015. In order to review the progress achieved from 2010 to 2015, and to identify more possible improvements to supply chain performance, a final assessment of the SCFAP was conducted in 2016. This activity fomented the establishment of the Friends of the Chair (FOTC) on Trade Facilitation in 2016 to carry out related technical work.
The assessment and work carried out by the FOTC on Trade Facilitation led to the development and finalization of the suggested Framework for the Phase Two of Supply Chain Connectivity Framework Action Plan 2017-2020 (SCFAP Phase II), which was endorsed by the leaders in 2016. In 2017, further works are currently being carried out by the FOTC on Trade Facilitation and CTI, in order to implement SCFAP Phase II, including the development of a framework to monitor progress (targets and indicators) and developing action, plans corresponding to the respective choke points as identified in the SCFAP Phase II.
Expanding Regulatory Cooperation and Advancing Regulatory Coherence
CTI’s key contribution to regulatory convergence and cooperation continue to be done through the implementation of the APEC Regulatory Cooperation Advancement Mechanism on Trade and Related Standards and Technical Regulations (ARCAM) established by Ministers in November 2010. Since its inception, CTI has addressed the issues of:
- Interoperability standards for Smart Grid (2011);
- Self-regulation in advertising (2012); and
- Electric vehicle standards (2014)
In 2016, CTI agreed to select sustainable materials management (SMM) as a topic for the 4th ARCAM dialogue. The SMM is a systematic approach to using and reusing materials more productively over their entire lifecycles, from the point of resource extraction through material recycling or final disposal, to reduce environmental impacts, conserve resources and reduce costs. SMM will add to APEC’s efforts to address investment and services issues in the environmental sector through improving regulatory coherence among APEC economies. As a first step of the related work under ARCAM, the United States, as lead economy, launched an APEC-wide survey to collect more information on APEC members’ regulatory and/or official definitions for key SMM-related terms.
Promoting Innovative Development, Economic Reform
CTI endorsed a self-funded project on “Advancing Big Data Applications in Trade” by Chinese Taipei at CTI2 in 2016 and a workshop was held on 6 October in Chinese Taipei. It was suggested that APEC should continue to collect case studies on big data applications and that APEC member economies could cooperate with each other to strengthen the success of big data in trade promotion and facilitation, as well as the advancement of global chains.
Interaction with ABAC
In 2016, CTI and its sub-fora delivered outcomes consistent with ABAC’s 2015 recommendations. The highlights include:
To Support the Multilateral Trading System
Enable a Free Trade Area of the Asia Pacific
- Advance the New Services Agenda
- Build and Strengthen Global Value Chains
- Accelerate Investment Liberalization and Facilitation
- Accelerate Green Growth
- Accelerate Infrastructure Development
- Strengthen Supply Chain Connectivity
- Promote the Digital and Internet Economy
- Enhance the internationalization of MSMEs
- Build Innovative and Adding Activities in MSMEs