2008/SOM2/CTI/002
APEC COMMITTEE ON TRADE AND INVESTMENT
FIRST MEETING FOR 2008: LIMA, PERU, 26-27 FEBRUARY 2008
CHAIR’S SUMMARY RECORD OF DISCUSSION
INTRODUCTION
1. The First Meeting of the Committee on Trade and Investment (CTI) for 2008 was held in Lima, Peru, 26-27 February 2008. Ms Elizabeth Mary Chelliah of Singapore’s Ministry of Trade and Industry chaired the meeting. All of the 21 APEC member economies were represented. The APEC Secretariat was also present. Representatives of ABAC attended the meeting as well. (The list of participants is attached as Annex 1.)
CHAIR’S OPENING REMARKS AND BUSINESS ARRANGEMENTS
2. The CTI Chair extended a warm welcome to all delegates to the first CTI meeting of 2008 and encouraged Convenors to participate actively in the CTI’s discussions. She thanked Peru for the warm hospitality and excellent arrangements made for the CTI and its associated sub-groups’ meetings. She noted that as Senior Officials have not yet met, the Committee’s priorities and agenda for 2008 may change depending on any new tasks sent down by SOM following their meeting on 2-3 March.
3. The Chair outlined briefly the business arrangements for the two-day meeting. She looked forward to having a focused discussion on each of the agenda items so that the meeting could move through speedily and allow time for any of the Friends of the Chair (FOTC) groups or member economies to conduct further discussions, if necessary. This would facilitate the finalisation of the Committee’s 2008 work programme for submission to the SOM.
ADOPTION OF THE AGENDA
4. The Committee adopted the draft annotated agenda with some minor adjustments in the order of the discussion. (see 2008/SOM1/CTI/001).
MATTERS ARISING FROM RECORD OF LAST MEETING
5. The Committee noted the intersessional approval of the Chair’s Summary Record of Discussion of the CTI Meeting held on 26-27 June 2007 in Cairns, Australia
SUPPORT FOR THE MULTILATERAL TRADING SYSTEM
6. Support for the multilateral trading system remains a key APEC priority and the CTI expressed its support for a successful conclusion to the Doha Development Agenda (DDA). However, in light of the current state play of the negotiations, CTI recognized that there was not much it could do to specifically contribute to efforts to successfully conclude on the DDA. It agreed to conduct activities in support for the multilateral trading system in a flexible way and encouraged economies and sub-fora to identify work or projects towards this end.
7. The GOS Convenor reported that most of the work undertaken in the GOS had been focused on trying to improve the understanding of the various services sectors. The group had embarked work on sectors like education services, energy services; and environmental services and was exploring possibilities in the area of legal services; health services; movement of natural persons and logistics services. In so far as support of the multilateral trading system is concerned, the GOS was implementing a capacity building project on the measurement of services trade. In respect of the RTA/FTA model measures work, the Convenor reported that GOS members had a good discussion on model measures for temporary entry of business persons and made significant advances on it. She drew the meeting’s attention to an urgent TILF funding request to conduct a survey on trade liberalization in environmental services. The project proposal awaiting final confirmation from GOS members would be submitted for CTI’s approval before the meeting ends. (see 2008/SOM1/CTI/009 for the Convenor’s Summary Report)
8. The CTI Chair thanked the GOS Convenor for her report. With respect to the approval of project proposals, the Chair suggested that the Committee would look at all of them again under agenda item 13.
9. CTI took note of the MAG Convenor’s Summary Report (see 2008/SOM1/CTI/007 rev1). The CTI Chair commented in her capacity as the former MAG Convenor that the group has yet to find a successor to take on the MAG convenorship. She encouraged members to continue their consultations in the margins of the meeting in the hope of resolving the issue before the end of the meeting.
10. CTI reviewed the outcomes of the MAG Workshop on IT/Electronics Industry held on 20 February (see 2008/SOM1/CTI/008) and agreed to recommend the inclusion of draft language in Senior Official’s press statement on the results of the SOM to demonstrate support towards maintaining the integrity of the Information Technology Agreement (ITA). The agreed text was as follows:
“APEC Senior Officials reaffirmed the importance of the role the Information Technology Agreement (ITA) has played in promoting trade, investment, and economic growth in APEC economies over the last ten years. Senior Officials also expressed concern about products covered by the ITA that may no longer be receiving duty free treatment in some key markets because of their technological innovations. They expressed further concern that these recent developments will undermine the ITA, and agreed to work together to ensure that the integrity and original spirit of the ITA is maintained.
11. ABAC’s Executive Director informed the meeting that ABAC at its last meeting in Jakarta endorsed dispatching a delegation to Geneva before the Moscow ABAC in May to raise the voice of business and demonstrate support for the successful conclusion of the WTO DDA. ABAC will be in a position to report on outcomes at SOM2/CTI2.
CAP IMPLEMENTATION
12. The Chair noted that the Committee had done an extensive overview of its sub-fora’s CAPs recently and hence there was no need to do another review at this stage. However, she is conscious that should new taskings come forth from Senior Officials, CTI members may need to revisit the subject at its next meeting.
STRENGTHENING REGIONAL ECONOMIC INTEGRATION
a) Exploring a FTAAP
13. The Chair noted that one of the agreed actions in the strengthening REI report for examining the options and prospects for a FTAAP was the completion of the initial tranche of a study on identifying convergences and divergences in APEC RTAs/FTAs (“convergence/divergence study”), which had already been approved by CTI last year prior to Leaders’ endorsement of the REI Report. In inviting Peru to update the meeting on the status of the study, the Chair also commented that CTI might want to start looking at the other agreed actions on REI/FTAAP and better plan its work should it receive further guidance from SOM to support its work in this area.
14. Peru provided an update on the progress of the Study it was undertaking with the Inter-American Development Bank (IADB) for Identifying Convergences and Divergences in APEC’s RTAs/FTAs. (2008/SOM1/CTI/031). As part of the progress report, Peru tabled as a pilot chapter, the Comprehensive Matrix (2008/SOM1/CTI/031 app 2) and the Executive Summary (2008/SOM1/CTI/031 app3) for the Technical Barriers to Trade chapter.
15. New Zealand informed the meeting that to complement the Peruvian study, it will undertake work on another five chapters namely: trade remedies, competition policy, government procurement, intellectual property and dispute settlement. The study will be undertaken by New Zealand’s ASC under the supervision of Professor Robert Scollay between SOM1 and SOM2 using the same methodology as the Peruvian study. New Zealand expects the findings to be available for presentation at SOM2.
16. Peru reported that it would present the outcomes of the study at the SOM Policy Dialogue on RTAs/FTAs to be held on the margins of SOM2. The presentation at the SOM Policy Dialogue would be conducted in a policy-oriented manner and the discussion is expected to clarify next steps for APEC’s work on REI/FTAAP. The Peruvians envisage the more technical discussions and presentation to be dealt with at the CTI level
17. Australia introduced its proposal to conduct a Trade Policy Dialogue (TPD) at CTI2 on docking or merging of free trade agreements (FTAs). (see 2008/SOM1/CTI/010). Following confirmation that the objective of the TPD is simply to help members to understand better the concepts of docking or merging of FTAs, members agreed to hold the TPD prior to CTI2 on 24 May in Arequipa. In addition, the meeting also agreed that technical results of the convergence/divergence study if presented at the TPD would be useful reference tools for the discussion on docking and merging of FTAs. In this connection, to enable members to have a productive discussion and airing of views, the Chair urged Peru and New Zealand to consider distributing their results early, e.g. by end April.
b) Promotion of RTAs/FTAs
18. Australia briefed the meeting on the proposed work plan on RTAs/FTAs which builds on its existing work in developing model measures for commonly accepted RTA and FTA chapters and takes into account relevant aspects of APEC’s work on REI. CTI approved the work plan and noted that it may need to be revised or amended to support SOM’s work on examining options and prospects for a FTAAP after the SOM1 meeting. (see 2008/SOM1/013 Anx 1).
19. The Committee took note of the state of play in the model measures that were currently under development, viz:
· Temporary Entry for Business Persons (see 2008/SOM1/CTI/012) – Canada, as the coordinating economy, reported that significant progress has been made on the model measures since its introduction last year, through a great deal of intersessional work and consultations amongst GOS and CTI members. Canada’s approach to this model measures was to create a best practices document that reflects the business activities currently in place in the market and gives the greatest value to the business persons whom they hope will ultimately benefit from model measures on temporary entry. Members have reached an agreement in principle on the text pending final clearance from a few member economies from their capitals. Canada hopes to confirm the agreement in writing before CTI2.
· Environment (see 2008/SOM1/CTI/011) – Chile, as the coordinating economy, informed the meeting that due to administrative reasons the last text which was mostly agreed by August 2007 following several bilateral consultations was not presented for approval at CSOM last year. It was decided at that time that it would be presented for adoption at the Lima meeting in February 2008. However, as some economies required further consultations with their capitals, the text was not ready for submission to SOM in March. Chile assessed that there was good prospects for it to be completed by the MRT.
· Investment (see 2008/SOM1/CTI/028) – Japan, as the coordinating economy, reported that it was regrettably still trying to get agreement on their latest text of 1 August 2007.
· Competition Policy – New Zealand, as the coordinating economy, reported that the model measures for competition policy was amongst those that are ripe for conclusion. After a number of small group meetings during the course of last year and 5 drafts, one outstanding issue remained on the table by SOM3 in Cairns that needed to be resolved. After some intersessional work, following contacts with the economies concerned prior to Lima, New Zealand has found some compromise language that should find broad acceptance with the CTI membership and allow for the model measures to be successfully completed. New Zealand informed the Committee that it will circulate a final draft of the competition model measures immediately following SOM1 for final approval by CTI so as to conclude the model measures at SOM2 in Arequipa advance of the MRT.
· Anti-dumping; and Subsidies and Countervailing Measures – Thailand, as drafting economy for the two sets of model measures informed the meeting that it would report progress on these model measures at the next meeting.
· Trade in Services – Australia, as the coordinating economy, noted that there have been numerous drafts of the model measures on trade in services since it was first tabled in 2006. However, despite efforts and assistance from several economies, the differences preventing members from arriving at a consensus text remained. Australia was of the view that an entirely new approach may be needed for the attainment of consensus to become a realistic aim and suggested that perhaps inspiration for a new draft could be found from the model measures for dispute settlement that was adopted in Hanoi.
20. ABAC’s Executive Director drew the meeting’s attention to ABAC’s contribution to CTI’s work on the development of model measures, its draft ABAC model chapter on customs administration and trade facilitation (see 2008/SOM1/CTI/005). The draft has been circulated to CTI members and convenors and ABAC prior to the Lima meetings. The Chair sought and received the Committee’s approval to include ABAC’s draft model measure on customs administration and trade facilitation as part of the package of RTA/FTA model measures for 2008.
21. CTI reviewed the outcomes of the trade policy dialogue on aspects of the relationship between investment, trade in services and trade in goods held on 25 February 2008. The dialogue had two very good speakers with the speaker from UNCTAD focusing on some of the policy challenges member economies were facing in global system in terms of achieving the best from Foreign Direct Investments (FDIs) and the speaker from Fedex presenting on the importance of supply chain Integration in terms of investment and services nexus. CTI noted that the points raised at the dialogue could provide economies with preliminary ideas of the elements business in particular, would look to when making investment decisions and hence could facilitate the work on developing an Investment Facilitation Action Plan (IFAP) as mandated by APEC Ministers in Sydney last year.