Balancing Trade and Security through Increased Cooperation within the Asia Pacific Region

Mr. Ricardo Lagos Weber, APEC SOM Chair 2004.

Dr. Elías Bluth, Vice Minister of Defense of Uruguay and Chair of the Inter American Committee Against Terrorism of the Organization of American States

Ambassador Mario Artaza, Executive Director of the APEC Secretariat

Mr. Hiroyuki Minami, Chair of APEC´s Counter Terrorism Task Force

Distinguished Moderators and Speakers;

Senior Officials and representatives of member economies of the Asia Pacific Economic Cooperation.

This morning, I join our SOM Chair in welcoming all our APEC colleagues to Chile and also all our national participants to this Conference. I am honored to have the opportunity to be with you and proceed to open the Second APEC STAR Conference, a priority activity within the APEC Chile 2004 Work Plan which will endeavor to respond, in a timely and goal oriented manner, to the expectations set forth by our Ministers and Economic Leaders on the theme of Security and its relationship with Free and Open Trade within the world´s most dynamic region.

The economies of the Asia Pacific Rim represent the driving force of the world's economic and commercial future. Through the establishment of a rich and diverse Asia Pacific community, Chile believes that APEC Member Economies can effectively continue to achieve impressive economic growth while lowering protectionism.

APEC is a diverse community. Our realities and characteristics are different, the threats that we face and the measures required are also varied. Last October in Bangkok, our Leaders gathered to combine our diverse strengths to meet the challenges facing our region. In line with APEC's theme for the Thai Year, "A World of Differences: Partnerships for the Future", it was agreed that strong partnerships are vital in order to achieve the goals set out in Bogor.

To realize our APEC common vision amidst the rapidly changing international environment, our Leaders agreed to strengthen partnerships not only to liberalize and facilitate regional trade and investment, but also to protect our peoples and societies against threats to their security. By taking effective steps, as we will be embarking as of today through the Second APEC STAR Conference, we are fulfilling our tasks so that we may realize the APEC vision, established by Economic Leaders in 1993, of "achieving stability, security and prosperity for our peoples". That is our ever present goal.

In Bangkok, our Leaders agreed that transnational terrorism and the proliferation of weapons of mass destruction pose a direct and profound challenge to APEC´s vision of free, open and prosperous economies.

It was agreed to dedicate APEC not only to advancing the prosperity of our economies, but also to the complementary mission of ensuring the security of our peoples.

The Second APEC STAR Conference is a tangible example of how APEC is contributing to the ability of its members to deliver improved access to wealth and social progress, while bearing a role for security led initiatives.

Chile is a committed partner in APEC's on-going work towards confronting through effective means, the threat posed by terrorism to our communities in all their diversity. We strengthen partnerships by increasing and better coordinating our counter terrorism activities, where appropriate, through effective collaboration, technical assistance and capacity building.

We are seeking to increase cooperation between APEC with the Counter Terrorism Action Group of the G-8; The United Nations Security Council's Counter Terrorism Committee; the Organization of American States; ASEAN, International Financial Institutions dealing with Capacity Building Programs; the International Maritime Organization; the OECD Financial Action Task Force; and other relevant international, regional and functional organizations.

The leading theme for the APEC Chile 2004 Year is "One community, Our Future". This central theme is guiding APEC's work and is supported by a series of sub-themes which will direct the activities and outputs of APEC Working Groups and Forums.

By "Sharing Benefits through Better Practices", we are effectively protecting the regional community from the threat of terrorism. This is crucial for safeguarding sustained economic growth and stability. APEC aims to protect its member economies without jeopardizing the efficiency of trade flows. APEC members should continue to share information and develop capacities which will enable the region to balance economic prosperity with security.

APEC has historically been regarded as an exclusively economic and trade organization, with its primary targets focused on trade and investment liberalization and facilitation. However, at various points in APEC's history, questions have been raised about the organization's capability to play a constructive role within the region on a range of political and security issues.

Community building in a very broad sense constitutes an important function for APEC. In the long term, the peace, stability and prosperity of the region can only be assured if we confront in a cooperative manner, the threats such as global terrorism posed upon APEC member economies. APEC today is establishing not only a community geared towards opening markets and creating opportunities for our stakeholders, but is also advancing towards the establishment of a secure region. For community building it is essential to build confidence. Chile has been making efforts in this direction especially with its neighbors in the Latin American region, and is prepared to share its capacities and experiences. Chile is currently a non-permanent member of the United Nations Security Council, and the country fully understands that under the current process of globalization, with growing and almost unlimited interdependence, one of the most compelling challenges we have is to increase international cooperation in order to find common solutions to common problems.

In the international debate about security, there has been a long running discussion about the relationships between economic change and the degree of resultant stability or instability in the security environment. Moreover, the concept of security has been extended to include ideas of economic security, environmental security, food security, as well as concerns with international crime, illegal migration and various health threats. Today the challenges we face are more complex and continue to evolve. Security threats affect us in different ways according to our own realities.

However, it seems clear that the tragic events of September 11, 2001 will have a lasting economic, political and strategic resonance within the APEC region.Although APEC does not deal directly with political or security issues, the organization is increasingly regarded as an important source of regional stability. Such stability is fundamental for economic development. At this point, we clearly need to find a balance between security concerns and open trade to achieve our common goals of prosperity.

A clear example is the need to balance the costs associated to increased security with our goals to reduce transaction costs within the APEC Region by 5% by the year 2006, through the APEC Trade Facilitation Action Plan. Although this efficiency improvement is anticipated to stimulate an additional increase in trade of around US$ 280 billion, we must be able to identify if increased security measures will allow developing economies to benefit from these reductions. Growing costs may represent a heavy burden on smaller economies and also could become a barrier to trade with a strong impact on SMEs.

Although there are bright spots in many APEC economies in specific sectors, the economic outlook has been darkened by anxieties over global economic weaknesses and threats posed by terrorism as well as the SARS epidemic and, most recently, the avian flu. These challenges underline how our respective destinies are inextricably linked and how important it is that we find collective responses to common dangers.

Sixteen APEC Member Economies are members of the Asian Regional Forum (ARF), a multilateral process that is building bridges across the Pacific in order to counter the threats of transnational terrorism. It may be appropriate for those ARF members to seek the consensus from the process in order for those APEC member economies who are not part of the system, to participate actively as Observers or Full Fledged members, so that a true Trans Pacific Partnership may be realized through the active participation of APEC within the ARF

APEC has gone to great lengths to achieve tangible outcomes with regards to creating a secure business environment. We value the work undertaken by the Counter Terrorism Task Force and look forward to a more profound relationship between the public and the business sector, in programs designed to build capacities and allow access to technology that is essential for developing economies to be able to maintain strong economic growth as well as to create a secure environment in the region. In this direction, we need to identify and develop specific, regional initiatives and future project directions, which can add value to the current work being undertaken by the Task Force, considering among others, the different issues to be discussed in this Conference.

The task before us is a complex one. It can only be sustained through the concerted efforts of various institutions within our governments, as we see today in Chile by those involved in this meeting- from members of the Chilean Air Force and Navy to representatives of the different ministries - and in particular a private-public partnerships. APEC is a forum which recognizes the importance of private sector participation and certainly, this conference is an opportunity for them to express - in an open way - opinions and positions that can add value to APEC's on-going work in secure trade.

This open dialogue can help us to improve future work plans. Through a positive dialogue as the one we are about to embark upon today, we can effectively support our Leaders to identify and respond to the needs of the private sector and thus help them to lead the way towards increased trade expansion and investment in the region, bearing in mind the requirements that need to put in place with regards to increased security.

As stated by the APEC Business Advisory Council, ABAC, which will be represented by its Chair, Mr. Hernán Somerville, Trade and Security issues such as the STAR initiative, require intense regional cooperation as well as active government-business dialogue in order to minimize the costs associated to the adoption of new standards and procedures.

APEC friends: Since joining APEC in 1994, Chile has embraced the organization as a true opportunity as well as a credible partner in meeting the challenges that are arising through globalization and economic interdependency.

Today, international trade in goods represents 65% of Chile´s national output - amongst the highest rates in the world.

Chile believes in open regionalism and in economic and financial openness. We consider that as a developing economy, persistent and strong economic growth is necessary, although not a sufficient condition for attaining social equity. In this sense, our final goal is to be able to offer better opportunities for men, women and youth in Chile. We also believe that as a small but efficient economy, sustained and rapid economic growth requires a vigorous expansion of trade with credible and secure partners.

The valuable experience that we were able to attain during the Thai 2003 APEC Year, should lead us to strengthen regional capacities in order to respond to health or security related emergencies. We sincerely hope that, as hosts of the 2004 APEC year and of this Conference, we will be able to make a contribution towards a safe and secure region with growing commercial interdependence.