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How Has the Region Benefited?
Promoting Regional Economic Integration and Trade
APEC has grown to become a dynamic engine of economic growth and one of the most important regional forums in the Asia-Pacific. Its 21 member economies are home to around 2.95 billion people and represent approximately 62 percent of world GDP and 48 percent of world trade in 2021.
As a result of APEC’s work, growth has soared in the region, with real GDP increasing from USD 19 trillion in 1989 to USD 52.8 trillion in 2021. Meanwhile, residents of the Asia-Pacific saw their per capita income rise almost fourfold, lifting millions out of poverty and creating a growing middle class in about three decades.
Bringing the region closer together, reducing trade barriers, and smoothing out differences in regulations have boosted trade which, in turn, has led to this dramatic increase in prosperity. Average tariffs fell from 17 percent in 1989 to 5.3 percent in 2021. During that same time period, the APEC region’s total merchandise trade increased over nine times—outpacing the rest of the world with more than two-thirds of this trade occurring between member economies.
APEC implements a wide variety of initiatives to help integrate the region’s economies and promote trade while addressing sustainability and social equity.
Making it Easier to Trade Across Borders:
In 1994, APEC leaders committed to achieving the Bogor Goals of free and open trade and investment by 2020 through reducing trade barriers in the region and promoting the free flow of goods, services and capital among APEC economies. Since then, members have made measurable progress in achieving these goals. APEC’s Trade Facilitation Action Plan which includes streamlining customs procedures reached its target of region-wide reduction in costs at the border by 5 percent between 2004 and 2006. A further 5 percent decrease was achieved between 2007 and 2010, which saved businesses in the Asia-Pacific a total of USD 58.7 billion.
Since the launch of the Bogor Goals in 1994, trade and investment flows in APEC grew tremendously since 1994. Tariffs have dropped significantly, trade in services has experienced further openness and governments are conducting efforts to improve the general investment climate. In addition, the APEC region has experienced significant progress in trade facilitation with simplified procedures and improvement in the quality of logistics. On the contrary, non-tariff measures have increased, average tariffs on agricultural products are still high and new types of services restrictions are becoming more prevalent, such the emergence of restrictions on cross-border data flows.
Over time, the APEC agenda has broadened its focus to address behind-the-border barriers such as improving regulatory practices and the local business climate.
Making it Easier to do Business:
APEC launched its Ease of Doing Business Action Plan in 2009, with the goal of making it cheaper, easier and faster to do business in the region. Between 2009 and 2013, member economies improved the ease of doing business in the Asia-Pacific by 11.3 percent across all areas of the initiative, including starting a business, getting credit or applying for permits. For example, APEC has expedited the time it takes for a company to build a new factory or office building. Today, construction permits are issued at a faster pace, dropping 18.7 percent from 169 days to 134 days in the last four years with APEC topping the charts globally for the shortest permit time. Starting a company in the Asia-Pacific is also simpler with the number of procedures falling by 20.2 percent since 2009.
Faster Customs Procedures:
At the border, APEC economies have centralized export-import processes online, accelerating the time it takes for goods to travel across borders. Known widely as Single Window, this virtual system links all government agencies involved in the export-import process, allowing companies to submit documents electronically one time from anywhere. Gone are the myriad forms, long queues, and visits to multiple agencies, while goods spoil in warehouses. Since the APEC Sub-Committee on Customs and Procedures (SCCP) launched the Single Window initiative in 2007, APEC capacity building workshops have provided training on software coding or legal issues to help APEC members implement their own Single Window systems. By 2013, 14 APEC economies had adopted various stages of the Single Window system, with the goal of all 21 members coming on board by 2020
To improve behind-the-border barriers to trade, APEC has been working to foster transparency, competition and better functioning markets in the Asia-Pacific through regulatory reform, improving public sector and corporate governance, and strengthening the legal infrastructure. Since 2004, APEC has implemented predictable and transparent regulatory practices across the region. For example, APEC members have made great strides in ensuring new government laws are publicly communicated and their cost and benefits are appropriately assessed.
Connecting the Region
APEC is working to connect the region through improving physical infrastructure linkages, people mobility and institutional ties across the Asia-Pacific. APEC's Connectivity Blueprint maps out initiatives from improving information technology and transportation infrastructure to making it easier for students, businesspeople and tourists to travel around the region.
APEC Business Travel Card:
By making it simpler for business people to travel, APEC is enabling them to conduct their business, trade and investment more easily. Over 340,000 travelers use the APEC Business Travel Card which provides pre-approved frequent business travelers with visa clearance and fast-track entry through special APEC lanes at major international airports in the region. 19 APEC members fully participate in the scheme with the United States and Canada as transitional members.
APEC Supply Chain Connectivity:
APEC is also improving logistics and transport networks to enable component parts and final goods to travel across multiple borders, contributing to a more efficient regional supply chain. To improve efficiency, APEC is addressing eight 'chokepoints' from regulatory impediments to customs procedures and infrastructure bottlenecks with the goal of an APEC-wide 10 percent improvement in supply chain performance in terms of time, cost and uncertainty by 2015. APEC has made progress towards achieving this goal. For example, between 2009 and 2013, the lead time to import goods dropped by an average 25 percent while lead time to export fell by 21 percent in the region, according to an APEC Policy Support Unit assessment.
Environmental Goods List:
In a landmark agreement, APEC is encouraging the development of clean technologies and greener growth across the region by lower tariffs on environmental goods. In 2012 in Vladivostok, Russia, APEC leaders agreed to reduce applied tariffs on 54 environmental goods to five percent or less by the end of 2015. The APEC list of 54 products- from solar panels to wind turbines-accounts for around USD 600 billion in world trade. APEC member economies are currently moving forward with implementing the list.
Increasing Energy Efficiency and Renewables:
In 2011, member economies committed to reduce energy intensity in the region by 45 percent by 2030. In 2014, members agreed to work toward doubling the share of renewables by 2030 in APEC's energy mix, including in power generation. Members are also committed to rationalizing and phasing out inefficient fossil fuel subsidies that encourage wasteful consumption. The APEC Energy Working Group's many projects help members reach these goals.
Green Towns in the Asia-Pacific:
Funded by a multi-year project under the APEC Energy Working Group, APEC helped urban planners develop low-carbon model town plans for a series of cities throughout the Asia-Pacific. These cities are reducing their carbon footprint by adopting a set of carbon emission reduction targets and energy efficient initiatives from solar panels to electric vehicles. APEC projects also support the development of smart electricity grids that enable sources of clean power to be seamlessly connected to existing structures and distributed to rural communities.
Inclusive Growth: Ensuring Everyone is On Board
Nurturing Small Businesses
Nurturing the competitiveness of small and medium enterprises (SMEs) and their ability to participate in global supply chains have been critical elements of APEC's agenda. Over the years, APEC has launched a wide variety of initiatives that have helped stimulate SME development in the region.
In 2005, the APEC SME Innovation Center was established in Korea to help improve the competitiveness of SMEs in the region through hands-on business consulting. The APEC Start-up Accelerator Network was launched in 2013 to promote entrepreneurship and innovation by connecting technology start-ups with funding and mentors. In 2014, the Start-up Accelerator sponsored six Asia-Pacific start-ups to compete in the Intel Global Challenge and Siemens New Venture Forum in Silicon Valley, USA, successfully capturing both awards and venture capital interest.
Since 2011, APEC has worked to enhance SME business ethics, particularly in the healthcare sector. By 2014, APEC's initiative resulted in codes of ethics being adopted and implemented by around 60 biopharmaceutical and medical device industry associations and their member companies from 19 economies across the Asia-Pacific, representing more than 14,000 firms. SMEs are also more vulnerable to disasters with many companies going bankrupt in the aftermath of a disaster and wreaking havoc on global supply chains. To improve SME disaster resilience, APEC has trained more than 250 regional experts to assist SMEs with business continuity planning in order to minimize disruptions due to a disaster.
Enhancing Social Equity in the Region
In addition to supporting small businesses, APEC is working to ensure all members of the Asia-Pacific can participate in the growing economy. The APEC Digital Opportunity Center was established in 2004 to provide computer skills training to vulnerable rural and urban communities. With over a hundred centers in 10 APEC economies offering information technology (IT) training, the APEC Digital Opportunity Center (ADOC) is focused on transforming digital divides into digital opportunities. Over the last decade, these centers have trained over half a million people throughout the APEC region, and almost half are female. Many men and women who received this digital training found jobs or started their own businesses, improving livelihoods and incomes for their families.