APEC's Business Agenda in 2009
"APEC is not a talk shop and APEC is not just the 21 leaders dressing up in funny costumes at the end of the year. We actually do a lot of work. Now we are trying to make sure there's a lot more relevance to the business community," says Mary Elizabeth Chelliah, Chair of APEC's Committee on Trade and Investment (CTI).
Cognisant of the need to deal with the immediate crisis, but also to lay the foundations for continued and sustainable growth, APEC is addressing the short- and the long-term and is tackling both sides of the ledger: working to stimulate trade and investment and to reduce businesses' transaction costs.
Stemming protectionism, supporting Doha
APEC has come a long way in terms of reducing barriers to trade and the benefits to the region have been immense, so it does not want to take a back step.1 That's why APEC Leaders committed to a 12 month standstill on protectionist measures in Lima last November.
Since then domestic calls for protection have grown even louder as the crisis has become more intense, and as a result some slippage has occurred. To tackle the issue APEC is now working closely with the WTO Secretariat to develop a monitoring mechanism that detects and highlights the measures introduced by members that could be considered trade restrictive or distorting.
"[It will be] an exercise in transparency, so that everyone at the table can see for themselves what is being done and through a process of peer pressure and moral persuasion we hope to put a check on these (protectionist) pressures," explains Ravi Menon, APEC 2009 Senior Officials' Meeting Chair.
Importantly, WTO Director-General Pascal Lamy will be attending the Meeting of APEC Ministers Responsible for Trade in Singapore in July, to brief Ministers on the WTO's efforts against protectionism and to discuss how APEC can help.
APEC also believes that the best defence against protectionism is to be on the offence and will therefore be pushing for progress on the Doha Development Agenda. Mr Lamy's presence in July will undoubtedly ensure that this issue is paid a lot of attention.
Stimulating trade and investment, reducing costs
Dealing with the immediate trade implications of the crisis is a priority for APEC, and members will use the opportunity of the upcoming meetings to share information on trade finance issues and stimulus measure experiences.
At the same time however APEC is pressing ahead with its core liberalisation and facilitation agenda.
1. At-the-border:
During 2009 APEC will keep members focused on the Bogor Goals of free and open trade - this means further work to reduce tariffs, non-tariff barriers and other restrictions to trade and investment. A particular area of focus will be simplifying Rules of Origin so that businesses can take advantage of the 42 free trade agreements (FTAs) that already exist between APEC members.
APEC will also continue to examine options for a Free Trade Area of the Asia Pacific (FTAAP), an initiative of the APEC Business Advisory Council (ABAC). A study has already been done of 30 FTAs that exist between members to see where they converge and diverge. Further analysis is now being done to consider the various options of docking, merging or enlarging some of these FTAs to form a regional FTA over time.
2. Behind-the-border:
Research shows that APEC economies and businesses can potentially gain more from behind-the-border or structural reform than further tariff reductions. That's why in 2009 APEC's Economic Committee will identify priority regulatory barriers - with input from the business community - so that it can develop initiatives to remove them. The World Bank's Doing Business indicators will be used as a reference for this work.
APEC's Committee on Trade and Investment (CTI) is also helping to improve domestic business environments through continued implementation of the Second Trade Facilitation Action Plan (TFAPII) which aims to reduce business transaction costs by a further 5 per cent by 2010.2
Implementation of the CTI's new Investment Facilitation Action Plan, aimed at improving the investment environment throughout the region, is also progressing. The focus is now on developing key performance indicators and the actions to be taken under each of the priority themes identified in 2008 (e-transparency, reducing investor risk and simplifying business regulation).
A new Services Facilitation Action Plan has also been mooted and this initiative should take shape during 2009.
3. Across-the-border:
APEC is also heeding businesses' concerns about the need to improve logistics and supply chain connectivity in the region. Already APEC's efforts on streamlining customs procedures lead the world. But in addition, work is now underway to identify choke points along the entire supply chain and to prioritise the steps that need to be taken to remove them. The ultimate objective is to formulate a Supply Chain Connectivity Framework by the end of the year.
The mobility of business people is also an issue that APEC is dealing with, through the APEC Business Travel Card scheme. Over 57,000 business people now hold the cards, which allow visa-less travel and fast-track immigration processing into and out of APEC economies. All APEC member economies but one participate in the scheme, and processing times for issuing new cards have been substantially reduced.
1 When APEC was established in 1989 average tariffs in the region were 17 per cent, by 2004 they had been reduced to 5.5 per cent. Source: Mid-Term Stocktake of the Bogor Goals 2005.
2 APEC's first Trade Facilitation Action Plan (TFAPI) reduced business transaction costs by 5 per cent between 2002 and 2006.