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2009/TEL39/PLEN/006
Agenda Item: 4
2009 APEC Secretariat Report on APEC Developments
Purpose: Information
Submitted by: APEC Secretariat
/ 39th Telecommunications and Information Working Group Meeting – Plenary SessionSingapore16 - 18 April 2009
2009 APEC SECRETARIAT REPORT ON APEC DEVELOPMENTS
Key outcomes from 2008
The XVI APEC Economic Leaders’ Meeting held in November 2008 in Lima, Peru, concluded with a package of recommendations and deliverables:
Ø APEC Leaders’ Statement on the Global Economy. Leaders committed to keep the region on a path of long-term growth, pledged to reject protectionism, and to support an ambitious and balanced conclusion to the World Trade Organization (WTO) Doha Development Agenda (DDA) negotiations.
Ø Leaders welcomed the 2008 progress report on efforts to strengthen the Regional Economic Integration (REI) and endorsed the 2009 work plan.
Ø Leaders welcomed efforts to intensify the work under each of the five priority areas of the Leaders’ Agenda to Implement Structural Reform (LAISR).
Ø Progress was made on the institutional reform. The APEC Policy Support Unit (PSU) became operational and APEC agreed on the conditions, responsibilities and accountability mechanisms related to the appointment of a fixed-term Executive Director of the APEC Secretariat.
2009 APEC priorities
APEC 2009 is taking place amidst a challenging global economic environment. APEC economies have an important role to play at this critical juncture. To help sustain growth, APEC can provide a “stimulus package” for trade, by resisting protectionism and accelerating economic integration within the Asia-Pacific region. Singapore’s chairmanship of APEC in 2009 will pursue this goal under the theme of “Sustaining Growth, Connecting the Region”.
Ø Resist Protectionism, Support Doha.-APEC’s top priority for 2009 is to provide impetus for the successful conclusion of the Doha Round of negotiations under the WTO.
Ø Accelerate Regional Economic Integration.- APEC will focus on:
a.-Strengthening Trade and Investment Liberalization (At-the-border) by reducing tariffs, non-tariff barriers and other restrictions to trade and investment flows at-the-border.
b.-Improving the Ease of Doing Business (Behind-the-border) by simplifying business regulations, as part of its larger structural reform agenda.
c.-Enhancing Physical Connectivity (Across-the-border) by improving logistics and transport networks so as to enhance physical connectivity across-the-border.
Ø Strengthen APEC.-APEC will continue to strive to be the premier forum for economic integration and cooperation within the Asia-Pacific region, as well as an effective platform for business sector engagement.
Key outcomes from SOM I
At the meeting in Singapore on 15-16 February, APEC Senior Officials took stock of measures to address the global economic crisis, reaffirmed their commitment to resist protectionist pressures and agreed on initiatives to accelerate regional economic integrations. Please see various sections below for the details/highlights of these initiatives.
It is noteworthy that in the margins of this meeting, the APEC Senior Officials and APEC Senior Finance Officials met jointly for the first time in an informal dialogue to exchange views on their respective economies’ response to the global financial and economic crisis.
I - Trade and Investment Liberalization and Facilitation (TILF)
1. World Trade Organisation-Doha Development Agenda (WTO-DDA)
Senior Officials monitored and reviewed progress in the WTO Doha Round of Negotiations at each of their meetings throughout 2008. In expressing their resolve to address the deteriorating global economic situation in a separate Statement on the Global Economy, APEC Leaders committed in Lima to support a prompt, ambitious and balanced conclusion to the WTO DDA negotiations. Leaders undertook to refrain within the next 12 months from raising any new barriers to investment, trade in goods and services, imposing new export restrictions, or implementing WTO inconsistent measures in all areas, including those that stimulate exports.
At SOMI, Senior Officials agreed to follow up on the APEC Economic Leaders' pledge in Lima to avoid raising new barriers to trade and investment. SOM also agreed that the Chair, in consultation with the APEC Secretariat, would prepare a report to the MRT summarising key trends and developments on trade and investment measures and their impact on the region. This report would draw on the report of the WTO Secretariat on trade-related developments which have occurred in the context of the global economic crisis and inputs from ABAC.
2. Regional Economic Integration (REI)
In Lima, APEC Leaders welcomed the 2008 progress report from Ministers and Officials on efforts to meet the 2007 long term agenda to strengthen the regional economic integration. The report summarised steps undertaken in response to the 53 agreed actions contained in the 2007 REI report. It also highlights key areas of APEC´s work which would be advanced as part of the REI agenda in 2009. A number of the 53 agreed actions have been completed and significant progress has been made on a large portion of those items still pending. Work on examining the options and prospects for a Free Trade Area of the Asia-Pacific (FTAAP) has been constructive and useful. This work included:
· compilation of a preliminary inventory of issues relevant to a possible FTAAP that would need to be addressed as part of a possible preparatory;
· completion of the initial tranche of a study on identifying convergences and divergences in APEC RTAs/FTAs
· completion of an initial review of existing analysis relevant to a possible FTAAP and assessment of the need for future work
· exploration of the concepts of enlargement docking or merging of existing agreements
At SOM1, SOM endorsed an updated REI multi-year work plan with priority work items in the three broad areas and directed relevant economies, committees and subfora to follow up. The three broad areas are:
· Accelerating trade and investment liberalisation “at the border”
· Improving the business environment “behind the border”
· Enhancing physical connectivity “across the border”
SOM agreed to undertake work to accelerate trade and investment liberalisation in three ways:
a) Making the Rules of Origin (ROOs) more business-friendly through:
· Harmonisation based on sectors;
· Cumulation; and
· Simplification of documentation and procedures.
b) Identifying possible vehicles for FTAAP, including:
· Growing by membership; and
· Growing by sectors.
c) Deepening analysis on FTAAP:
· Inventory of issues
· Further analytical work
With respect to improving the business environment, Senior Officials discussed the outlines of an APEC Ease of Doing Business (EoDB) Action Plan, to be submitted to the APEC Ministerial Meeting for endorsement in November 2009. Three main elements were discussed: (i) identifying priority regulatory reforms; (ii) building capacity for reform; and (iii) setting targets to measure results. Work in area is largely undertaken in the Economic Committee (EC). (See Section III below),
For the 3rd area on enhancing physical connectivity, Senior Officials welcomed CTI and EC’s work this year to develop a Physical Connectivity Framework for endorsement at AMM 09, which would cover three broad areas:
a) Identifying areas affecting the movement of goods and services across the entire supply chain.
b) Recommending specific measures to enhance physical connectivity, including capacity building.
c) Setting targets to measure improvements.
At the CTI level, the Committee agreed on a work plan developed by its FOTC on REI/FTAAP to take forward work already mandated by APEC Leaders and Ministers last year on exploring modalities for an FTAAP as well as new initiatives as tasked by SOM on its priority to accelerate REI “at the border”. For example, on ROOs, AMM 2008 had instructed officials to continue the work to examine approaches to preferential rules of origin (ROO) on a sectoral basis. CTI agreed to (i) work on examining the feasibility of having harmonized rules of origin for specific sectors starting with the 4 sectors that the MAG and CDSG has started work on i.e. white goods, steel, consumer electronics, and chemical products; and (ii) explore other areas of work as agreed to by SOMs i.e. on cumulation and simplification of documents and procedures. CTI also agreed to complete an analysis of three to four sectors for presentation at the joint CTI-MAG TPD on ROOs to be held at the margins of CTI2 on 21 May 09. With respect to the 2008 Convergences/ Divergences Study of APEC FTAs, CTI agreed to update the chapters with the recently completed FTAs/RTAs as notified to the WTO by 1 Jan 2009, with a view to having further discussions on the next steps at the CTI3 TPD.
3. Regional Trading Arrangements/Free Trade Agreements (RTAs/FTAs)
In 2008, APEC Leaders welcomed five new model measures, including a chapter on Customs Administration and Trade Facilitation that was developed by ABAC which CTI had agreed to include as part of the package of RTAs/FTAs. This resulted in a total of 15 model measures completed. APEC Ministers urged member economies to make efforts to bridge differences and agree to the model measures on investment; anti-dumping; subsidies and countervailing measures; trade in services and labour cooperation over the course of the year. At CTI1, the Committee agreed that economies would notify the CTI Chair when they were ready to adopt the model measures as they are. An update would be provided at CTI2.
With the completion of the mandated work on model measures, CTI agreed to explore whether the model measures for trade facilitation could be expanded to provide more specificity and content. It further agreed that this work would commence with a comparative listing of the 2005 APEC model measures for trade facilitation; the ABAC model measures for trade facilitation and customs procedures; and the chapter on trade facilitation from the Canada-Costa Rica free-trade agreement.
4. Individual Action Plans and Collective Action Plans (IAP-CAP)
In Lima in November 2008, Ministers reaffirmed the importance of APEC’s Individual Action Plans (IAPs) as a driver for reaching the Bogor Goals and commended the measures carried out by individual economies to liberalize and facilitate trade and investment. The IAP Peer Reviews for Brunei, Indonesia, Malaysia, and Thailand were held in the margins of SOM I in Singapore on 13-14 February 2009. Those for Philippines, Papua New Guinea, Russia, and Vietnam will be held in the margins of SOM II in July this year.
Collective Action Plans (CAPs) continue to frame the work plans of the CTI and its sub-fora. These CAPs are living documents and are revised and enhanced annually in response to the priorities set by Leaders and Ministers, including the call to ensure deliverables in CAPs are relevant to business. CAPs are recognised as a useful channel to implement APEC commitments on trade and investment liberalisation and facilitation (TILF), which complement the Individual Action Plans (IAPs).
5. Investment
The Investment Facilitation Action Plan (IFAP) for 2008-2010 aims to strengthen regional economic integration; strengthen the competitiveness and sustainability of economic growth of APEC’s member economies; expand prosperity and employment opportunities in the APEC region; and make further progress toward achievement of the Bogor Goals. CTI identified three initial priority areas for implementing the IFAP, i.e., e-transparency, reducing investor risk and simplifying business regulations. CTI (FOTC) will continue to work to develop an implementation plan for the IFAP, including agreed Key Performance Indicators (KPIs) and reporting methodologies to be endorsed by MRT in 2009.
Investment continues to be a priority area for robust action in 2009. IEG has also launched its initiatives to implement IFAP through its newly established Small Group. It will identify specific action area for implementation in 2009 and 2010. Other initiatives made by other fora in 2008 include the LSIF’s Checklist of Enablers of Investment and the EWG’s draft Energy Trade and Investment Action Plan.
6. Trade Facilitation
In Lima, APEC Leaders endorsed the continued process of implementation of APEC’s Second Trade Facilitation Action Plan (TFAPII) to meet the trade facilitation goal of a further 5% reduction in transaction costs by 2010. Ministers welcomed the inclusion of trade logistics issues in trade facilitation agenda and instructed officials to develop new trade facilitation and trade logistics initiatives. Ministers also instructed officials to work towards the implementation of international trade “Single Windows” across APEC using recognised international instruments and standards to enhance interoperability of trade systems.
As agreed at CTI3 2008, CTI and the EC jointly held a policy dialogue on trade logistics on 18 February 2009, prior to CTI1 where both Committees agreed to collaborate on a Supply Chain Connectivity Initiative (SCI) that would be carried out in three steps:
· Mapping: to identify the work that has been done on trade logistics within APEC and in other organizations;
· Identification of choke points within the supply chain
· Prioritization of steps to be taken by APEC to address the choke points.
Consequently, at CTI1, the Committee adopted a work plan on trade facilitation to progress the implementation of TFAPII as well as to progress this new adopted Supply Chain Connectivity Initiative (SCI). It also noted that Australia and Singapore would co-sponsor a Symposium on 16-17 May after ABAC2 in Brunei to take forward the SCI.
On TFAP II, CTI adopted a set of KPIs and reporting methodologies in 2008 to measure the progress of implementing the agreed actions and measures in TFAPII for implementation by sub-fora collectively. It had also agreed to work with the Policy Support Unit (PSU) to develop a rigorous methodology by which to measure the effect of the implementing TFAP II. However at CTI1, the Committee discovered with the help of the PSU that the KPIs identified by its sub-fora, though valid as a means to measure progress in improving processes, did not of themselves lead to an outcome that would definitely show a reduction in trade transaction costs. Therefore, CTI will be working with the relevant sub-fora, assisted by the PSU, to re-look the KPIs to see how a better mechanism may be developed in which to do the reporting methodologies for measuring the reduction in transaction costs. In addition, a consultant will be commissioned by the PSU with funds donated by Hong Kong China to undertake a study on the TFAPII measurement task
On the SCI, the CTI agreed that the mapping exercise would be conducted before the Symposium. A template has since been created for this mapping exercise.
7. Pathfinder Initiatives
In 2008, lead economies continued to promote increased participation in the existing TILF-related pathfinders. Membership of the Data Privacy Pathfinder expanded with China, Philippines and Singapore joining the initiative, bringing the number of participating economies to 16.