Achieving APEC's Trade Objectives
In July, Trade Ministers emphasized the urgency of a breakthrough in advancing the Doha Development Agenda (DDA). The Trade Ministers reviewed the latest details of the WTO negotiations and discussed actions that can be taken by APEC to bring the round to a successful conclusion.
In a separate statement on the DDA released at the meeting, the ministers made it clear that a deal would have to deliver real gains in terms of genuine market access and cuts in farm subsidies. Without those, they argued, economies do not get the boost to growth and development that is central to the whole exercise.
"We need to make cuts in agricultural and industrial tariffs which result in real and substantial improvements in market access and real and substantial reductions in trade-distorting agricultural subsidies," the Trade Ministers said in their Doha statement. This issue will now be taken to the highest level at the Leaders' meeting in Sydney.
According to a World Bank study commissioned by APEC and discussed widely at the Cairns meetings, the collective trade performance of APEC economies would be raised significantly by transparency and related trade facilitation measures. Noting that the collective trade performance of APEC economies would be boosted by USD$148 billion, Trade Ministers instructed officials to consider how the findings of this study, "Transparency and Trade Facilitation in the Asia-Pacific: Estimating the Gains from Reform," can be used in APEC's trade facilitation and transparency work.
The importance of enhancing regional economic integration was also high on the agenda at Cairns. The Ministers provided guidance to officials to put the finishing touches on a draft report recommending a range of practical measures to further promote economic integration. This will be presented at the next APEC Ministers Meeting in September.
The Asia Pacific region has been the biggest beneficiary of the open trade system and Trade Ministers in Cairns emphasized that the region must focus on the broader benefits to economies, businesses and consumers of continued momentum toward freer trade-benefits that far outweigh foreseeable adjustment costs that individual economies may be required to implement. They also discussed efforts being undertaken by senior officials and trade experts to minimize the sometimes distorting effects of bilateral agreements.
Participants recognized that a Free Trade Area of the Asia-Pacific (FTAAP) could be an important long-term means to deepening regional economic integration, along with work in areas such as structural reform, strengthening financial markets and sectoral initiatives. Plans to have up to three additional sets of model measures for regional trade and agreements (RTAs) and free trade agreements (FTAs) ready in time for the Leaders Meeting in September were also discussed. Ministers talked about what scope there is for APEC to do work on preferential rules of origin.
The dramatic increase of both the volume and complexity of world trade had APEC Trade Ministers agreeing on the importance of keeping trading procedures simple, predictable and transparent to allow commerce to flow as freely as possible.
Many of APEC's better known successes have been in the area of trade facilitation. Under APEC's Trade Facilitation Action Plan I (TFAP 1), member economies achieved a reduction in trade transaction costs by 5% across the APEC region between 2002 and 2006 as a contribution to the Bogor Goals. Building on this success, APEC Trade Ministers in Cairns endorsed a new Trade Facilitation Action Plan (TFAP II) to reduce transaction costs by a further 5% in the Asia Pacific region for the period 2007-2010.
TFAP II will streamline electronic customs documentation, improve the online business environment, harmonise domestic and international standards and make business travel easier. "The measures agreed in this action plan will deliver practical outcomes for business and consumers, who will benefit through more competitive prices," Australian Minister of Trade Warren Truss declared in Cairns.
And as US Trade Representative Susan Schwab noted at the APEC Trade Ministers' Meeting in Cairns, "APEC doesn't make headlines, but it does make money for business."
The plan contains a set of collective actions, among them so-called "customs single windows." These allow businesses involved in trade and transport to lodge standardized information and documents at a single entry point to meet all import, export and transit-related regulatory requirements. No longer will business concern itself with multi-language triplicate forms. The initiative is of great value because it means less time and less cost.
Other TFAP II initiatives include the harmonization of food safety standards that will reduce costs to business; further work on cross-border privacy rules to protect the integrity of e-commerce; and the expansion of the APEC Business Travel Card scheme.
The travel card scheme provides cardholders of seventeen member economies with special immigration lanes and priority clearance on arrival and departure from international airports. While conditions may vary in member economies, most visa pre-clearances are typically valid for three years and permit multiple entries for up to sixteen foreign destinations. To a business person, the card can represent the equivalent of hundreds of individual visas. That's a big saving in time and money.
The expansion of the card scheme to cover all 21 APEC economies will be an important contribution to the TFAP II. The card scheme improves border security because the initial background screening is done by the applicant's home economy. This helps free up border resources to concentrate on higher risk areas. To measure TFAP II progress, Ministers Responsible for Trade acknowledged the call by business leaders to develop Key Performance Indicators.
Ministers also agreed the new plan should refer to other business facilitation activities being undertaken across APEC, including domestic regulatory reform, work on business ethics, and secure trade and investment. Ministers at Cairns noted that facilitating trade is enhanced when complemented by such "behind-the-border" reforms.
Behind-the-border or structural barriers refer to domestic policies and institutions that impede the efficient operation of markets and the capacity of businesses to operate efficiently. They can take the form of domestic regulatory systems, competition frameworks and governance structures.
APEC Ministers for Trade stressed the importance of further investment liberalization and facilitation. The ministers agreed to explore a possible Investment Facilitation Action Plan. This would bring together public-private sector dialogue, policy recommendations and identify capacity building needs to improve the investment climate. They also called for additional work and capacity building to promote better understanding of the elements of a sound investment policy regime.
In this vein, the Trade Ministers advocated more work on the protection and enforcement of intellectual property rights. They encouraged economies to contribute to the Best Practices Paper on Innovative Techniques for IPR Border Enforcement and to undertake greater information exchange among IPR authorities and enforcement authorities. They also welcomed APEC's work on trade and the digital economy and encouraged economies to further bridge the digital divide-to invest in basic infrastructure and enhance technological developments that will ultimately help facilitate trade.
These and other issues will be discussed further and in depth at the upcoming meeting of APEC Leaders in Sydney in September. Participants at the meeting will endorse proposals that will help promote APEC's aims to bring about robust outcomes for the region including sustainable growth, integrated markets and increased opportunities in all economies.