The APEC Process And Benefits To Business

Ho Chi Minh, Viet Nam, 01 September 2003
  • Speech by Ambassador Mario Artaza, Deputy Executive Director, APEC Secretariat
First I would like to congratulate the Vietnamese authorities on their national day, and offer my very warm applause for the preparations of the fair and this workshop.
Over the past decade APEC has been at the centre of efforts to promote economic growth and development in our region.
We are a forum of 21 member economies from all corners of the Pacific. From the South Pacific, to Asia, to our only European member, Russia, to North America and to South America.
2.5 billion people live in the APEC region, we have a combined Gross Domestic Product of around US$18 trillion, and our economies account for over 47% of global trade.
Together, all 21 member economies are working to build a greater sense of social and economic community. We are building bridges across the pacific to develop common understandings, to share technology, to trade and invest, and to build prosperity.
As you know, Viet Nam is a very proud member of the APEC family. In less than three years the eyes of our region will turn to Viet Nam as this economy plays host to the 2006 APEC Year.
When my home economy, Chile, hosts the APEC Year in 2004, I hope that all of the information and knowledge we learn from being the host, is passed to you so that the Viet Nam 2006 APEC Year is truly memorable.
This current APEC Year, hosted by Thailand, is almost at what we call the "business" end of the APEC calendar with our Finance Ministers meeting later this week in Bangkok, and then the Leaders' meeting next month.
For the Business community, APEC is a forum that has relevance to many activities and processes, and we hope, helps to make life simpler and more productive in day to day business operations.
The primary goals of the APEC process were first laid out by the Leaders of APEC economies when they met in Bogor, Indonesia, in 1994.
In what has become known as the Bogor Declaration, Leaders set the target of achieving free trade and investment in the APEC region by the year 2020 for developed economies, and the year 2010 for developing economies.
APEC is not only involved in facilitating free trade and reducing trade barriers, but is involved with many areas of policy formulation in APEC economies.
In recent years APEC has expanded its agenda in response to challenges brought about by globalisation and the development of the New Economy.
This includes efforts to establish greater public infrastructure in APEC economies such as more functional customs systems and developing telecommunications standards.
APEC activities also include the sharing of skills and knowledge that will build the capacity of all member economies to interact in the global market place.
More recently APEC has been active in increasing protection for the regional economy against major threats including terrorist activities and cross-border epidemics such as SARS.
As APEC progresses towards our Bogor Goals, much of our work is channeled through what are known as "The Three Pillars of APEC": These are:
  • Trade and investment liberalisation
  • Business facilitation, and
  • Economic and Technical Cooperation
I will speak briefly on results achieved in each of these areas and how they benefit the operation of businesses in our region.
Firstly, in the area of trade liberalization and investment, APEC has been successful in removing barriers and opening markets for all member economies to expand trade and investment across their borders.
When APEC was formed, most economies had average tariff rates of more than 10%, now only three members have tariffs at this level.
The removal of these barriers takes away the inefficiencies that have for so long held many businesses and economies back, and slowed prospects of economic growth.
But most importantly, in real terms, the removal of these impediments to trade has made it easier for businesses in all economies, particularly small and medium sized businesses, to obtain cheaper inputs to production and to export their own goods and services to more markets.
To achieve these benefits for business, APEC continues to represent our region in efforts to get the current World Trade Organization round back on track. The current Doha Round is a development round and is intended to provide the greatest attention to assisting developing economies to be increasingly competitive in the global economy.
APEC is a strong collective voice in the WTO process, and we will use this voice to promote the interest of our members.
The Second Pillar of APEC, the area of business facilitation, is a lot closer to the hearts of business people.
While APEC puts a lot of attention into lowering tariffs on goods and services in the region, we are also aware of the need to focus on non-tariff impediments to trade and investment.
These are the impediments and frustrations that are often faced by businesses when they come across issues such as inconsistencies in customs procedures, border inefficiencies and a lack of clarity on laws governing trade and investment.
This area of trade facilitation is vast and covers a great number of issues affecting international business operations. These issues include standards and conformance, intellectual property rights, competition policy, government procurement, deregulation, rules of origin, dispute mediation and visas for business travelers.
APEC cooperation in these areas aims to improve the trade and investment environment and reduce costs to businesses.
The objective of APEC business facilitation efforts is to cut the red tape that prevents business people from getting on with doing their jobs and trading across borders.
As part of this, APEC Leaders have pledged to make a 5% reduction in transaction costs throughout the region by 2006. This 5% reduction in red tape is expected to generate an additional US$280 billion for the regional economy.
These are substantial savings that will be shared by businesses throughout the region.
APEC members have also committed to implement APEC Transparency Standards. These provide business and investors with comprehensive and clear information on the rules and regulations of each APEC member.
These measures will have a positive impact on regional business at a direct level by making it less complicated and as such less expensive to trade across borders.
We urge members of the business community to explore the new options that continue to grow for you to export your skills, products and services around our region.
The Third Pillar of APEC, Economic and Technical Cooperation, or Ecotech, facilitates the technical assistance required for APEC members to benefit from trade and investment liberalization.
Ecotech activities support APEC's efforts to overcome gaps between developed and developing economies, and promote equitable development.
The programs initiated by Ecotech assist all member economies to achieve prosperity through activities that strengthen the competitiveness of the business and government sectors.
The six priorities established for APEC's Ecotech Work are:
  • Developing human capital
  • Fostering safe and efficient capital markets
  • Strengthening economic infrastructure
  • Harnessing technologies of the future
  • Promoting environmentally sustainable growth, and
  • Encouraging the growth of Small and Medium Enterprises
Together, the Three Pillars of APEC assist government and business in our member economies to deal more efficiently across borders and to become more competitive in the global economy.
Since the first APEC meeting that took place in 1989, and through the years since the Bogor meeting, there has been a great deal of progress.
Through an ongoing process of consultation and reaching consensus between member economies, there have been many success stories on a wide range of issues.
In the area of aligning domestic standards with relevant international standards there have been major achievements. This includes the Telecommunications Mutual Recognition Arrangement that covers trade worth an estimated US$ 50 billion per year.
It is estimated that the this arrangement will save five percent of the cost of new product placement, cut six months off the placement of new products in markets and reduce marketing costs for new products by up to thirty percent.
A similar initiative is the Food and Food Products Mutual Recognition Arrangement. This uses a series of recognized inspection and certification systems of assessing the conformity of the goods before they leave the port of embarkation.
Both of these initiatives make it easier for businesses to conduct trade safe in the knowledge that their products will not be held up at the port of arrival by red tape relating to standards recognition.
Cutting this red tape saves time and it saves money for business.
APEC has also made it a lot easier for business people to travel between APEC Economies through an expansion of the granting of multiple entry visas and the issuing of a greater number of visa waiver arrangements from APEC economies.
In addition to this, the visa requirements for travel to all APEC economies are now available in the Internet. This gives all travelers open access to the visa information through the APEC Business Travel Handbook website that is now posted on the APEC Secretariat Website.
For travelers one of APEC's proudest achievements is the APEC Business Travel Card scheme. This is a personalized card that the traveler presents at the immigration desk of airports and enables the traveler to pass promptly through passenger processing procedures.
14 APEC Economies now participate in the APEC Business Travel Card scheme.
As the business and government sectors of APEC member economies become more efficient and trade between economies is increased, the people of APEC economies are the winners.
With increased trade comes a direct flow-on effect for improved employment opportunities and more prosperous communities.
For us, we are very proud of the role business plays in charting the course of the APEC process.
There are few international or regional organizations that are made up of member economies in which the business sector plays such a central role.
The APEC Business Advisory Council, or ABAC, is just one of the ways business has a direct input to the APEC process.
Made up of senior business representatives of each APEC economy, ABAC meets four times each year and also presents a series of business recommendations to APEC leaders.
Another means for business participation in the APEC process is through various industry dialogues such as those for the automotive and chemicals sectors.
An APEC Automotive Dialogue was established in 1999.
This was established for government officials and senior industry representatives to work together on strategies for increasing integration and development of the automotive sector.
Another important industry dialogue is the APEC Chemical Dialogue. This was launched last year and resulted in an agreement to adopt and implement the Globally Harmonized System on hazard classification and labeling of chemicals and safety data.
Such public-private sector dialogues are important for ensuring effective communication on issues affecting development of future policy and for enhancing competitiveness of these significant industries.
The direct and extensive involvement of business in the deliberations of the APEC forum is critical for APEC's work and for it to stay on track to achieve the Bogor goals of trade liberalization in the Asia-Pacific region by 2010 and 2020.
With the rapid changes taking place in technology and commerce in the modern world, APEC officials rely heavily on the business sector to keep in touch with these revolutionary advances.
Our depth of entrepreneurial talent is one of the APEC Region's great strengths and one of the best ways to build bridges between the 21 diverse members of the APEC region.
Trade is not only about selling goods and services, but it is about the exchange of skills, the exchange of ideas and the exchange of cultural values.
To achieve the objectives of APEC we see business as being actively involved in strengthening a sense of community for our region.
The APEC process is an open and inclusive process. It is open to participation by a broad range of stakeholders and this clearly includes the business community.
The best place to start for any business people wanting to participate in the APEC process is our APEC website.
We have there a great deal of information to share with you about the initiatives, programs and dialogues taking place as part of the APEC process .
It is my pleasure to invite you to become closely involved with APEC.
Thank You.