Free Trade Through Dialogue and Understanding: Building Bridges across the APEC Region

Barcelona, Spain, 01 July 2004
  • Speech by Ambassador Mario Artaza, Executive Director, APEC Secretariat
Thank you for inviting me to this important dialogue. It is a pleasure to be in the great city of Barcelona in the company of such a distinguished panel at this roundtable. My congratulations to Forum Barcelona and Casa Asia for their efforts to find common grounds, of mutual understanding, tolerance and dialogue between peoples of different cultures and different models of society and development.
Rudyard Kipling wrote more that a century ago "that East is East and West is West, and the twain will never meet". He was clearly expressing a vision of a colonial past, which has little relevance in an increasingly globalized world. Today, all the points of the compass have meetings on all areas of human activity. Unfortunately, not all those encounters are peaceful and constructive. Nor all of them are based on dialogue an understanding. Our task is precisely to seek ways to construct bridges and overcome differences. And this is what APEC has been trying to do since 1989.
I would like to share with you some views on an organization especially created to bring together peoples from both sides of the Pacific Ocean through free trade and investment. Perhaps it is a limited and modest effort to bring down the walls of different cultures and visions of the world, but with all its limitations, it is working. This organization is APEC, or Asia-Pacific Economic Cooperation.
Allow me to provide you with a brief perspective of the APEC process. In particular I will share with you with information on the social development and capacity building measures APEC is implementing to build bridges between the people of East and West.
APEC is a forum of 21 Member Economies stretching from Russia, through North and South-East Asia across the Pacific to five economies in the Americas. APEC Member Economies account for half of the world's trade and are home to over 2.5 billion people. They are vastly different in size, political power and culture. They are as varied as Russia and Papua New Guinea. Chile and Thailand, United States and Viet Nam or China and Mexico. APEC includes three of the most important economies of the world: China, Japan and the United States. Asia Pacific represents the most dynamic region of the globe, which in the last 10 years has generated 70% of the world economic growth.
APEC represents a community of members working towards a number of objectives that while are generally trade and economics based, have major social consequences.
Like any community, a number of factors brings its membership together . And I emphasize that their members are very diverse in terms of history, culture and economic development, while they are increasingly related in terms of our investment and trading interaction.
The APEC process is itself very broad. While the Annual Economic Leaders' Meeting is the most prominent event on our calendar, each year there are a significant number of APEC events that take place and projects that are undertaken around the region.
This year as well as the Leaders' Meeting in Santiago, Chile, this November, there will be a total of ten ministerial meetings and around 75 APEC working level meetings covering numerous sectors of the regional economy. This interaction at both a high political level through to a working group level serves to create a unique and vibrant human network across many economies, in which dialogue and voluntarism is the rule. These meetings cover a multitude of subjects, ranging from health to finance, from environment sustainable development to mining, from energy to women affairs, from fisheries to transportation, etc. This is what has been called "decentralized functionalism" at work, with a type of organization that is basically member driven, with only a very small Secretariat as a core support mechanism for the whole process.
This broad range of areas in which APEC is involved is a reflection of the interrelated nature of the globalized economy of the today's world. Reaching APEC's goals involves more than just lowering tariffs, but it includes removing impediments to trade while strengthening capacity to do business across multiple industries, sectors and economies.
The stated goals at APEC are to achieve free trade and investment between all APEC Members by the year 2010 for industrialized economies and 2020 for developing economies.
These goals, while economic in definition, carry with them great social benefits for the people of our region, and great responsibility for those charged with reaching these goals.
I would like to talk first about the benefits and then look more closely at what we see as our obligations at APEC to achieving these goals in a way that ensures the safety and health our people.
A few figures will assist in providing us with a picture of some of the achievements: In the last 10 years, exports within the Asia Pacific region grew 113% while foreign investments grew, as a general average, 210% and 475% in the less developed economies. In the same period, the GDP grew 33%, while in the less developed economies grew 74%. In those ten years, 195 million new places of work were created, including 174 million in the less developed economies.
As a major motivator behind the launch of APEC in 1989, and the reason it is so important that we must succeed in achieving our goals, is the process of globalization.
The growing economic, social and cultural relations and connections between people of diverse regions of the world have major repercussions for the global economy, and particularly for people in developing areas who may have to deal with change brought as a result of globalization.
While globalization has taken a potent force in the last thirty years, some argue that the ease of migration and movement of capital between countries before the First World War really started the whole process.
Advanced telecommunications and transport and the high level of electronic interconnectedness means people in the modern world are much closer in many ways than in the past.
The speed of information flows and travel means that the impacts of change and fluctuations in the global economy are felt almost instantaneously around the world.
This increases the urgency through which we must take charge of this process of globalization and harness its strengths to serve the people.
This must be done successfully so that we do not find ourselves in the position the world was in following the First World War when policies of isolationism came to the fore and led the global economy of the time to economic depression and massive social upheaval.
Europe of course provides us with one of the greatest examples of the benefits to be derived from lowering barriers to trade to deliver benefits at a social and community level. The transition from the European Coal and Steel Community to the expanded Europe of today holds numerous lessons for all cross border forums as they develop.
While of course the European Union and APEC are different in structure and processes, they share the goals of delivering prosperity to the people.
For APEC, achieving what are called the Bogor Goals is one way to work towards this end. These goals, established in Bogor, Indonesia, in 1994, set the target of free trade and investment between APEC members by 2010 for industrialized economies and 2020 for developing economies.
As the first deadline of 2010 fast approaches, we hope that the achievement of these goals and the increased trade it stimulates will deliver greater opportunities for employment, social development and prosperity.
APEC will undertake a mid-term stock take next year to evaluate this progress. It is apparent that Member Economies classified as industrialized and several developing Member Economies are on track to meet the Bogor Goals by 2010.
The delivery of these Bogor Goals and the benefits that come with them is one of the responsibilities of the organization.
However, another responsibility is to ensure that the APEC process itself is developed in a way that causes minimal social and economic disruption to the people of APEC Member Economies. There is no doubt that change brings periods of adjustment that may include elements of uncertainty and hardship.
The task that APEC has at hand is to bring together a diverse range of Member Economies from the Americas, Asia, Australasia and Russia, to trade and interact with minimal restriction on business and trade.
And to do this, APEC has to build bridges to create a community of 2.5 billion people of varied and different races, historical backgrounds and government systems.
Certainly APEC is not looking to create a community along the lines of the EU. The challenge is one of building synergies of governance, transparency and trade interaction between the member economies.
This still brings with it change that may be more heavily felt by our smaller, developing economies.
The challenge is assisting developing economies to implement reform that will make cross-border trade easier and more competitive. This lowers the costs to domestic businesses to produce more and sell more, to employ more people and deliver economic and social benefits to their local communities.
However, to achieve this requires change and this change affects people at a local level. This change, while for the greater good, will have implications for individuals. These are people who work in industries that are only kept in operation through wasteful government subsidies or who have skills that were useful in the past business practices but are outdated in the modern workplace.
APEC is committed to ensuring that people affected by this change, those who work in industries that will close or who have skills that need to be updated, will have access to this support.
APEC undertakes a number of initiatives and projects that are intended to increase the capacity of developing economies to meet the goals of the APEC Process and to be more competitive in the global economy.
These are projects that are not purely economic in either their benefits or results, but follow the directions set by APEC Leaders on capacity strengthening initiatives and social development objectives. These are projects that strengthen the capacity of governments, businesses and people to deal with the modern global economy.
These projects bring together government officials, business representatives and academic experts from East and West, from the North and South America, Asia, Australasia and Russia to exchange ideas on best practices and the implementation of reform initiatives.Very importantly these projects are carried out at a local level with people who are affected by change.
This year the APEC Budget Management Committee has authorized projects that comply with the four APEC priorities of APEC's strategic roadmap for economic and technical cooperation. These four areas are:
  • Integration into the global economy
  • Promoting knowledge-based economies, and
  • Addressing the social dimensions of globalization and
  • Counter-terrorism capacity building
The projects cover a broad range of areas and issues.A few examples:
A project in Indonesia to share successful practices in the micro-finance and micro-credit to make it easier for the smallest businesses in the region to access finance.
Another project in Tokyo was held to strengthen avenues for people in developing economies to receive money transfers from relatives and businesses in other countries in a way that was not open to money laundering by terrorists or other criminals. Strengthening formal remittance channels will make it more secure for immigrants in industrialized economies to send money home to family members in developing economies.
In another project, knowledge of intellectual property rights in Australia is being shared with the government and business sector in Indonesia, the Philippines and Viet Nam to increase understanding of rights attached to cultural icons, designs and other intellectual property.
APEC has hold events such as the recent Roundtable on Measures to Secure Trade in Hong Kong to share information on enhancing security against terrorist attack while not impeding cross-border trade. This is an area of particular importance to several developing economies who must ensure their economies meet current security standards, but must make a large leap in terms of the standards they previously had in place. This project included information and resources on aviation security, anti-terrorist financing, illegal immigration, sea cargo security, air cargo security and cyber security, all problems related to terrorism, as much as it affects trade.
These projects and other initiatives are intended to build the capacity and strengthen the infrastructure of Member Economies to reduce potential social disharmony caused by change and adjustment.
This is an important social responsibility of the APEC process and one of the ways we are building bridges between East and West as our economies become increasingly interlinked.
In this current APEC Year, Hosted by the Republic of Chile, there have been a number of initiatives and undertakings intended to bridge the gaps that exist between or member economies and promote greater understanding between East and West.
Two in particular are issues discussed at the recent APEC Education Ministers' Meeting in Santiago.
One was the call for the expanded use of the English Language for trade and interaction between economies, and the other was for Ministers to bring together the best of educational practices in both the East and West.
Ministers looked at options for expanding education and training in the use of English and other foreign languages at their meeting. The intention of this is to overcome some of the communications problems that are evident in international trade and diplomacy and are especially relevant to small and medium enterprises which would like to adventure in imports and exports.
Strategies are now being developed to leverage the resources available in the region to assist economies to strengthen their ability to teach English and other major languages.
In their efforts to build educational bridges between Economies of the Asia-Pacific, Ministers also recognized that different economies have clear educational strengths in certain areas.
For example, Ministers noted that Asian educational systems have a reputation of excellence in teaching content knowledge in mathematics and science. At the same time Western education systems appear to focus on programs that develop analytical skills for practical implementation.
APEC Fora have now been instructed to undertake programs and measures to share the best educational tools of both East and West to learn from each other to strengthen our collective education systems.
A very positive initiative in bridging differences took place at one of the major ministerial events on the APEC calendar, the meeting of APEC Ministers Responsible for Trade in Pucón, Chile.
This year's meeting was a particularly important in seeking to overcome what could be termed as one of the major East-West impasses of the past year - the stall in the current round of WTO negotiations. The breakdown of WTO talks in Cancun last year were for the most part a result of differences between countries on a number of issues such as agriculture.
At their meeting, APEC Trade Ministers committed their economies to achieving a specific set of results by July that are intended to help revive talks in Geneva.
APEC Trade Ministers issued a statement that directed officials form APEC Member Economies in Geneva to work with a sense of urgency to achieve a series of concrete results. These include the development of a negotiating framework for agriculture, substantial reductions of trade-distorting domestic support and a specific commitment to abolish all forms of export subsidies.
APEC Trade Ministers from East and West were able to agree on a way forward to help break the current deadlock in WTO negotiations to find a solution that is acceptable to all. Ministers agreed that the high level of ambition attached to the WTO Doha Development Agenda must be accompanied by a strong and renewed emphasis on the key issue of development.
One of the greatest responsibilities that the APEC process has is to assist the developing member economies to adjust to changes required to be competitive in the global economy. Failure to do so would lead to economic and social difficulties as competition in the global marketplace for goods and services becomes stronger.
APEC is working to assist developing economies to implement the policies, processes and tools that are needed to make their economies more efficient.
I would like to conclude with a reference to the theme for the 2004 APEC Year chosen by the host economy, Chile.
This theme is "One Community, Our Future."
This theme sums up the aims of the APEC process this year and beyond, and it also serves to highlight the need to find ways to strengthen the ideas of a wider community of peoples around the globe, to live in peace and prosperity.
This theme highlights notion that despite cultural, social, political and developmental differences, the Member Economies of APEC cooperate as partners to advance together.
The theme recognizes that APEC members, as members of the global economy, are neighbors and a part of a community that must work together to achieve shared prosperity in the years to come.
Building bridges between the 21 Member Economies of the APEC Region, between East and West, between members from the Americas, Asia, Australasia and Europe is the core task of the APEC process, based on dialogue and free flow of ideas.
In the process of strengthening economic cooperation between the Member Economies , APEC is building social cohesion between a very diverse group of people and cultures and building greater understanding of the differences and similarities between East and West.
Thank you.