APEC ECONOMIC LEADERS' DECLARATION

Shanghai, China
21 October 2001

Appendix 1

Shanghai Accord

I. BROADENING THE APEC VISION

Globalization and the New Economy have transformed the global and regional economy significantly since the Bogor Goals, bringing forward extraordinary opportunities as well as challenges. APEC's vision needs to reflect these changes. While trade liberalization is at the core of APEC agenda, Leaders also agree that the Bogor Goals need to be placed within the context of an updated and expanded vision that addresses trade and investment liberalization and facilitation and economic and technical cooperation in an integrated manner to maximize the benefits for all economies in the region. One of the greatest challenges to materialize such a vision is to intensify the collective and individual actions that economies take at domestic and international levels on reforms and capacity building across a range of areas.

The strategic goals of the Finance Ministers' Process should also be reflected in a broader vision for APEC, given the important role of sound macroeconomic policies, good economic governance, stable financial systems and greater economic interaction have in improving prosperity for the region.

II. CLARIFYING THE ROADMAP TO BOGOR

• Broadening and updating the OAA

  Leaders applaud the work done this year on the Osaka Action Agenda (OAA), and recognize its importance in reflecting APEC's accomplishments and ability to respond to changes in our regional and global situation. Leaders agree that the OAA should be broadened to reflect fundamental changes in the global economy since Osaka, such as the development of new economy including through the implementation of relevant aspects of e-APEC Strategy, and Strengthening the Functioning of Markets. Leaders direct Ministers to follow this up. Officials should present an interim report at the 2002 Meeting of Ministers Responsible for Trade (MRT) and a full report at the 2002 APEC Ministerial Meeting (AMM) on their recommendations with regard to broadening the OAA.

• Adopting a pathfinder approach in advancing some APEC initiatives

  Leaders reaffirm that those economies ready to initiate and implement a cooperative arrangement may proceed to do so, consistent with the Bogor Declaration. Leaders encourage the development of such "pathfinder initiatives' and agree that in adopting such an approach, APEC principles of voluntarism, comprehensiveness, consensus-based decision-making, flexibility, transparency, open regionalism and differentiated timetables for developed and developing economies should be observed. Use of 'pathfinder initiatives' based on a group of members piloting the implementation of the initiatives, will invigorate progress towards the Bogor Goals and provide a framework to encourage broader participation through enhanced capacity building programmes. Leaders also agree that these initiatives should be transparent and open, with clearly defined objectives and framework for implementation to encourage the broadest participation by other APEC members when they are ready to join.

• Promoting the adoption of appropriate trade policies for the New Economy

  Leaders recognize the importance of adopting appropriate trade policies to reflect the new context and encourage the development of the New Economy. As part of this effort, Leaders instruct officials to undertake by mid-2002 an exchange of appropriate trade policy information, such as information on the status of liberalization of services, and adherence to tariff and intellectual property regimes. On this basis, economies may develop targets by the Ministerial Meeting in 2002. In this exercise, account should be taken of the implementation of relevant recommendations endorsed in the e-APEC Strategy. Given the diversity among member economies, Leaders agree that the development of the New Economy would also involve developing and implementing concrete capacity building programs to improve performance.

• Follow up on the Trade Facilitation Principles

  Leaders instruct Ministers to identify, by Ministerial Meeting in 2002, concrete actions and measures to implement the APEC Trade Facilitation Principles by 2006 in close partnership with the private sector. The objective is to realize a significant reduction in the transaction costs by endeavoring to reduce them by 5% across the APEC region over the next 5 years. Leaders also instruct Ministers to explore the possibility of setting objective criteria on trade facilitation, taking fully into account the diversity among the members as well as progress achieved in respective economies so far. Leaders also agree that assistance programmes to help build the capacity of developing economies in trade facilitation is particularly important.

• Adoption of transparency principles

  Leaders recognize the importance of transparency in economic governance. In this regard, APEC has developed, menus of options and principles in different areas that contain transparency provisions. Leaders direct Ministers to pursue the implementation of APEC's agreed transparency principles, taking into account economies' specific circumstances and report on the progress in their IAPs in 2002 and thereafter. Leaders also underline the importance of well-targeted assistance to help the developing economies make progress towards greater openness and transparency. Leaders note the importance of cooperation on e-government for achieving this objective.

III. STRENGTHENING THE IMPLEMENTATION MECHANISM

• Strengthening the IAP Peer Review Process

  Leaders welcome the decision by Ministers to strengthen the Individual Action Plan (IAP) peer review process, and encourage member economies to volunteer their IAPs for peer review on the basis of the new approach. Leaders also agree that upon completion of such a review cycle, involving all volunteer economies, a mid-term stocktake of the overall progress towards the Bogor Goals should be undertaken in 2005.

• Strengthening Ecotech and capacity building efforts

  Leaders recognize that in addition to promoting sustainable development and narrowing disparity, Ecotech helps to enable all member economies to achieve prosperity through activities that both directly support trade and investment liberalization and facilitation and strengthen the competitiveness of our economies. Leaders applaud the efforts undertaken this year to update the OAA Part II and call for greater integration of Ecotech efforts with all APEC priority goals. Leaders underscore the need to give a strong impetus to ensuring the effective implementation of various Ecotech initiatives, especially crosscutting issues such as human capacity building.

  Leaders recognize the importance of substantially enhancing the profile of Ecotech and improving the coordination and management of Ecotech activities of all fora. In this context, Leaders welcome the review to be undertaken on the mandate and role of the SOM Subcommittee for Ecotech (ESC), and look forward to early progress. Leaders also recognize the need to encourage the incorporation of the priorities of micro, small and medium enterprises throughout the APEC agenda.

  Leaders agree to further develop Ecotech Action Plans (EAPs), as an instrument to gauge and encourage Ecotech activities, drawing from the experience and lessons learned in the pilot phase. Leaders also call on all members to take part in this exercise on a voluntary basis. Leaders agree that APEC should strengthen ties with bilateral, multilateral, and private funding entities with a view to minimizing duplication and maximizing the delivery of capacity building programs. Leaders instruct Ministers and officials to intensify Ecotech activities and report the progress to the Ministerial Meetings next year.