Aid-for-Trade and Capacity Building Initiatives in the Asia-Pacific Region

Singapore, 11 June 2009
  • Speech by Ambassador Michael Tay, Executive Director, APEC Secretariat
APEC was established 20 years ago this year.
The vision was to improve prosperity and well-being in the Asia-Pacific through free and open trade and investment.
To achieve this vision APEC has an Action Agenda that focuses on what we call the Three Pillars:
  1. Trade and Investment Liberalisation
  2. Business Facilitation
  3. Economic and Technical Cooperation

The importance of the first two pillars to free and open trade is easy to understand. But what many don't know is the emphasis that APEC puts on the third pillar - economic and technical cooperation - or capacity building.

For APEC, capacity building is the scaffolding that allows the other goals to be reached.

APEC's 21 member economies represent 40% of the world's population, 44% of global trade and 54% of world GDP: but within our group there are significant disparities in development and economic and social well-being.

Capacity building is therefore a top priority for APEC because the future prosperity of the region depends on enabling all of our citizens to take advantage of global trade.

A director of the region's largest manufacturer of consumer products put it in a nutshell for me recently when he said - we don't look to grow by selling rich people more shampoo, what we need is for more people to be able to afford shampoo.

Since 1993 over 1,400 capacity building projects have been initiated within APEC.

Right now over 200 such projects are being implemented by APEC's working groups and task forces, at a value of around 14 million US dollars.

Like the WTO we conduct aid-for-trade or trade-related training and assistance.

In 2008, APEC approved 107 such projects worth 8.5 million U.S. dollars.

These projects focused mainly on technical barriers to trade, trade and investment in regional free trade agreements and building productive capacity in the agriculture and energy supply and generation sectors.

In fact, APEC specifically undertakes capacity building on WTO rules and regulatory disciplines.

Back in 1999 we created a WTO Capacity Building Group, so that APEC could make a tangible and meaningful contribution to negotiations in Geneva.

Between 2001 and 2006 the Group implemented over 30 projects to improve members' understanding of the benefits of the negotiations and of WTO processes - and to promote the implementation of WTO Agreements such as GATS and TRIPS.

Our work in the area has since been scaled back - and instead of a broad brush approach, we now focus on providing WTO-related training in areas that are not dealt with elsewhere.

For example, in April a workshop was held in Singapore to familiarise telecommunications officials from 11 of APEC's member economies with WTO-related telecoms trade rules; and to facilitate the adoption of WTO telecoms regulatory disciplines.

In their feedback 50% of the participants rated the workshop 'very good', and 50% rated it 'excellent'. Many also said how valuable it was, as it provided practical training that is not available in their home economies. As a result, the workshop will likely be repeated and extended.

Where APEC is unique however is that it goes well beyond pure aid-for-trade.

Indeed APEC adopts a very wide definition of the sort of capacity building activities that help free-up trade and investment.

We take unconventional areas like terrorism, health, disaster planning and climate change and tackle the aspects that have trade implications.

For example, APEC's Counter Terrorism Task Force holds an annual Secure Trade in the APEC Region Conference (STAR). The aim is to help people involved in cross border trade - like customs officers, port officials and aviation operators - to promote the flow of goods and people while still ensuring security.

APEC's Health Working Group has developed Pandemic Preparedness Guidelines and conducted training to help governments and businesses function in the face of things like Avian Influenza and the H1N1 virus.

And in the area of disaster management, APEC's Task Force for Emergency Preparedness recently held a workshop on Large Scale Disaster Recovery. Participants travelled to Sichuan in China and Chinese Taipei to share post-disaster recovery experiences: and to develop best practice guidelines for improving preparedness and restoring infrastructure and essential services.

These projects highlight the advantages of capacity building in APEC.

Because it's a voluntary and non-binding forum we can tackle topics that might be off-limits to international or regional fora that create obligations.

Given our pan-Pacific reach we have a wide range of perspectives and expertise to draw on. This also means that ideas and solutions discussed in APEC are widely disseminated.

Our activities are member driven rather than donor driven - which means that they respond to the actual needs of members.

This also means that our activities generate many positive spin offs. Member economies with interest in a particular area often sponsor initiatives that sit on the sidelines of the APEC process but that continue to provide benefit.

A very good example is the APEC Digital Opportunity Center network developed by Chinese Taipei. 41 centres in 7 member economies provide individuals and businesses with access to ICT resources and education - and to date over 54,000 people have received training. The hope is that by building their ICT skills more people will be able to engage in trade and improve their standard of living.

That's not to say it's all positive.

APEC has limited resources, so projects are generally of small dollar value and are done on an ad-hoc basis.

But we're aware of these deficiencies and have embarked on a serious program of review and reform.

The committee that coordinates capacity building in APEC is currently doing a stock take of capacity building gaps and members' needs.

And it's developing new criteria to rank project proposals to ensure that high quality and high priority projects are approved.

There is also a move towards multi-year projects that build year-on-year, producing more tangible and lasting benefits.

And the important issues of follow-up and evaluation are also being addressed.

So while we might not be taking the straightest path, and sometimes make a wrong step or two, we are convinced that APEC's capacity building projects have a very important role to play in building the region's capacity to engage in free and open trade.

And the great thing about capacity building is that it reminds you that trade is not the end, but rather it's the means towards the economic and social development of our people.