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Integrated Supply Chains Development for Innovative Growth in the Asia-Pacific Region

Speech by Ambassador Muhamad Noor, Executive Director, APEC Secretariat Saint Petersburg, Russia | 03 August 2012

St. Petersburg Governor Georgiy Poltavchenko, Minister Sokolov, honorable ministers, ladies and gentlemen, on behalf of the APEC Secretariat, may I thank the Russian Federation and the city of St. Petersburg for hosting this ministerial meeting and for the hospitality extended to us.

Today, APEC’s Transportation Ministers are gathered for a special session to progress the discussions at the 7th Transportation Ministerial Meeting in San Francisco last year and in particular, to address some of the current challenges specific to the region’s supply chain development.

The theme of this meeting is “Integrated Supply Chains Development for Innovative Growth in the Asia-Pacific Region,” under which Ministers are invited to deliberate on the establishment of reliable and efficient supply chains, including the role of intelligent technologies to enhance transportation connectivity and the security of supply chains to ensure stability and economic growth.

The transportation sector is critical to our economic prosperity and a key element to strengthening regional economic integration. Reliable and efficient supply chains are crucial for maintaining trade flows and in that manner impacts importantly on economic prosperity.

For this APEC Russia Year 2012, we seek to achieve outcomes in specific priority areas, i.e. expanding regional economic integration, establishing reliable supply chains, fostering innovative growth, and strengthening food security. A closer look will lead us to realize that these priorities are in many ways related to the transportation sector.

The efficient and safe transportation of people and goods is also a key to the realization of APEC's Bogor goals of free and open trade and investment in the Asia-Pacific region. This is because trade flows will be impeded by a lack of reliable and cost-effective transport. And in a world where supply chains are becoming increasingly globalized, efficient transportation will also affect investment.

Regional connectivity is a high priority among APEC. It is in this context that issues pertaining to the global supply chain, including SME participation in it, are among the next generation trade issues which have identified for attention by APEC.

In February 2009, APEC's Committee on Trade and Investment, together with the Economic Committee, organized a Trade Policy Dialogue to identify the elements to be included in a work program on trade logistics and supply chain connectivity. Under APEC's Supply Chain Connectivity Initiative, a framework has been developed to identify chokepoints in the existing supply chain networks and to identify work streams to address these chokepoints.  

The Supply Chain Connectivity Initiative identified eight chokepoints to the smooth flow of goods, services and business travellers throughout the region. Specifically, three of the eight chokepoints are trade-impeding bottlenecks related to the transportation sector.  

The objective of the Supply Chain Connectivity Initiative is to improve the performance of the flow of goods and services within the APEC region by 10% by 2015 in terms of time, cost and uncertainty.

A study, conducted by the APEC Policy Support Unit, found that a 10% efficiency gain in supply-chain connectivity would lift APEC’s real GDP by US$21 billion per year and the benefits would be substantially higher if behind-the-border increases in supply chain connectivity were considered.

Ladies and gentlemen, at this point, may I acknowledge the important work of the APEC Transportation Working Group (TPTWG).  The Group has been active in implementing both APEC Leaders' and Ministers' goals and directions pertaining to the movement of people and goods in our region.

The TPTWG aims to achieve further liberalization of transport services

and also works toward simplifying transportation regulations between APEC members. Significantly, the work of the APEC Sub- Committee on Customs Procedures (SCCP) has helped enhance the productivity of supply chains by harmonizing transport and trade-related procedures.

When they met in Bangkok, Thailand earlier this year, the TPTWG emphasized the importance of:

    Enhancing physical connectivity and integrating markets;
  • Facilitating faster, easier and more secure regional travel; and
  • Facilitating commerce and promoting economic growth in the APEC region.

I look forward to further contributions from the Working Group that will enhance our understanding of transport-related challenges facing businesses in the region, including how to enhance the APEC Supply Chain Connectivity Initiative.

Ladies and gentlemen, TPTWG has also been working together with other APEC for a in important areas. This includes the operationalization of the APEC Trade Recovery Program by the APEC Counter-Terrorism Task Force which seeks to ensure that the flow-of-goods is restored as quickly as possible in the event of a major disruption.

The program includes the development of an effective communications mechanism for information-sharing, which will be critical to governments and businesses during periods when transport systems are constrained.

I look forward to a successful APEC transportation ministerial meeting, including the directions that the ministers will set on the way forward in this area. 

Thank you.