Convenor S Summary Record of Discussion s2

Convenor’s Summary Record of Discussion

13-15 August 2002

Acapulco, Guerrero, Mexico

The APEC Group on Services (GOS) held its 19th meeting in Acapulco, Guerrero, Mexico on the 13th to 15th of August 2002. The GOS Convenor, Mr. José Poblano (Director General for Negotiation on Services in the Ministry of Economy) from Mexico chaired the meeting.

The representatives from the following economies attended the meeting: Australia; Brunei Darussalam; Canada; Chile; People’s Republic of China; Indonesia; Japan; Korea; Malaysia; Mexico; New Zealand; Peru; Singapore; Chinese Taipei; Thailand; and United States of America. The APEC Secretariat and the representatives of the PECC (Pacific Economic Cooperation Council) were also present.

Convenor’s Opening Remarks

Mr. José Poblano welcomed all delegates to the last meeting of the GOS in the Mexico-APEC 2002. He wished to each economy a good stay in Acapulco, stressing that during this meeting the GOS would discuss different issues that would contribute to have a better understanding of topics related to trade in services. He invited to each economy to attend the Seminar on Seaport Infrastructure Services that was organized by the Mexican delegation.

PREVIOUS MINUTES

The GOS Convenor reported on the main results of the last meeting, held in Merida, Mexico:

·  PECC carried out a workshop on “Towards Improving Regulation in the Services Sector” as a part of Phase III of the project on the Menu of Options for Voluntary Liberalization, Facilitation and Promotion of Economic and Technical Cooperation in Services Trade and Investment. The objective of the workshop was to assist GOS members in the understanding of different aspects of disciplines of domestic regulation in services.

·  US presented some information on the status of data related to cross border education services trade.

·  Indonesia presented a progress report on its plans to study the costs and benefits of services trade liberalization. GOS members raised some additional questions.

·  GOS reviewed the implementation of the Shanghai Accord discussing the updating of the Osaka Action Agenda to reflect fundamental changes in the global economy since Osaka, such as the development of the new economy and strengthening the functioning of markets. In this sense, GOS made modifications to the language proposed by the CTI Chair regarding Services.

·  GOS also recognized Leaders’ call to identify possible pathfinders initiatives and decided to keep working on the identification of such initiatives.

·  Member economies exchanged views on the implementation of the Counter-Terrorism Statement in GOS. The group agreed to ask for information to other related working groups on their activities regarding the implementation of the Counter-terrorism statement.

·  In order to contribute with the implementation of the e-APEC Strategy, GOS discussed the developments of the study on Innovation in Services Industries including e-commerce presented by Australia.

·  In relation with the Doha Development Agenda, GOS members agreed to support the WTO services negotiations by undertaking works on regulatory analysis and transparency.

·  GOS Member economies discussed and endorsed the People´s Republic of China’s revised proposal on Environmental Services.

·  GOS approved the Mexican project proposal to carry out a seminar on sea port infrastructure services.

Consideration and adoption of the Meeting Agenda

The Draft Agenda (2002/SOMIII/CTI/GOS/001) was adopted with some modifications (2002/SOMII/CTI/GOS/001.Rev 2):

·  In item IV (Discussion on APEC Tasking Statement: Trade facilitation) two additional issues were included: Implementation of Trade Facilitation Principles; and Consideration of Concrete Actions and Measures of APEC Trade Facilitation Action Plan.

·  In item VI (Study and carry out work concerning the development and adoption of common professional standards, in conjunction with professional accreditation bodies and needed legislative measures) the subtitle was shifted to: Information sharing on professional services.

DISCUSSION ON APEC TASKING STATEMENT

·  Shanghai Accord

-  Broadening and updating of the Osaka Action Agenda.

The GOS Convenor mentioned that in the last meeting GOS reviewed the implementation of the Shanghai Accord discussing the updating of the Osaka Action Agenda to reflect fundamental changes in the global economy since Osaka. In this context, GOS made modifications to the language proposed by the CTI Chair regarding Services. There were no additional comments on such issue.

·  Collective action plans

-  Review of CAP implementation.

The GOS reviewed documents 2002/SOMIII/CTI/GOS/004 and 2002/SOMIII/CTI/GOS/011. There were no comments in these issues.

·  Trade facilitation principles.

The document 2002/SOMIII/CTI/GOS/005 was amended in order to reflect the involvement of the business sector in Mexico’s project on seaport infrastructure services. The Convenor emphasized that the involvement of business sector in current and future GOS projects will be very fruitful and enriching for the Group´s activities.

Responding to the request from GOS, the CTI Vice-chair gave an explanation on how to find actions or measures to implement the APEC trade facilitation principles. He said that the Leaders instructed Ministers to identify concrete actions and measures to implement the APEC Trade Facilitation Principles by 2006 in close contact with the private sector. The objective is to reach a significant reduction in the transaction costs, reducing them by 5% across the APEC region over the next 5 years. GOS members asked CTI Vice-chair how to find those concrete actions that allow measuring that reduction in the transaction costs. He mentioned that in the case of goods is easy to measure that reduction but in services, there is no specific way to know to what extent in percentage points the costs were decreased.

He encouraged GOS members to continue exploring specific areas to find some concrete actions to implement the trade facilitation principles.

GOS economies requested the Convenor to consult with CTI on the scope of the potential concrete actions and measures, asking if those can go beyond the 4 areas identified by CTI (Business Mobility, Standards, Customs Procedures and E-Commerce).

·  Counter-terrorism statement.

During the last GOS meeting in Merida, member economies agreed to consult with other services related groups (Transportation Working Group; Telecommunications Working Group; Tourism Working Group; and Energy Working Group) about their activities on counter-terrorism, in order to know initiatives or activities they are taking in the sector, and to explore further actions that the GOS could implement to fulfil the Leader's Statement.

After some intersessional consultations on Counter-terrorism from the aforementioned working groups, only the Transportation and the Telecommunications Working Groups responded to the request. Member economies expressed their views and decided to explore ways to carry out such implementation.

IDENTIFICATION OF MEASURES AFFECTING TRADE AND INVESTMENT IN ALL SERVICE SECTORS

There were no further comments on this issue. The representative of Australia mentioned that he will try to get some information about cross border education services, insisting that data is very limited and difficult to gather.

INFORMATION SHARING ON PROFESSIONAL SERVICES

In this issue, Chile, New Zealand, Mexico and Canada presented their experiences on agreements on mutual recognition of professional standards/qualifications. The GOS agreed to keep working on such areas with the aim of exchanging regulatory information on professional services. GOS will consult with SCSC and HRD Chairs on their experiences of mutual recognition agreements.

The representative of Chile made some remarks on this topic such as:

-  The governmental body in charge of the recognition of Foreign Professional Titles is the Ministry of Foreign Affairs. This body keeps a registry of persons who hold a professional degree (of a signing Party of the Treaty) who applies for recognition. Once the person has complied with the requirements established in the Agreement, he/she receives the respective certification that allows him/her to work as a professional in Chile.

-  Chile´s “FTA second generation” have included annexes that seek to foster work between professional bodies of the signing parties in order to:

Ø  Improve the quality of the service.

Ø  Protect the consumer of professional services.

-  These kind of agreements allow to:

Ø  Create strong links at local level with professional associations.

Ø  Improve the quality of professional standards.

Ø  Encourage participation of private sector in international activities.

Ø  Create and/or develop new physical and virtual “meeting points” for suppliers of professional services in the APEC region.

The representative of New Zealand expressed the following aspects:

-  In New Zealand there is a statement called the “occupation principle”, by which an individual registered to practice an occupation in one of the Parties of the agreement, is legally capable to register in any of the other Parties to carry out an equivalent occupation.

-  There are some negotiating principles:

Ø  Confidence in each others´ regulatory systems and decision making processes.

Ø  Comprehensiveness (this principle could be an important tool to negotiate).

-  Impact assessment:

Ø  Minimal implementation problems.

Ø  Initial assessment directed to:

-  Facilitate movement of skilled people.

-  Possible creation of a “Trans-Tasman” market for some occupations.

-  New Zealand and Australia signed the “Trans-Tasman Mutual Recognition Act” which enables the qualifications of persons, and the acceptability of goods, in one country to be recognized in the other, and so thereby enhancing the free flow of services and goods between these countries. This agreement means that with the exception of a few exclusions and exemptions, all goods and business regulatory standards adopted in NZ will be recognized within Australia as if they were Australian standards and vice versa. The result of this Act has promoted a closer relationship and strengthened the cooperation between Australia and New Zealand. Moreover, several laws were amended in order to obtain better consistency in approaches on either side of the Tasman Act.

The representative of Mexico stressed that the main benefits and challenges from mutual recognition agreement negotiations under NAFTA were:

-  Internal development of processes related to accreditation of academic programs and certification of professionals.

-  Awareness of quality control issues among the consumers and the service providers.

-  Necessity to update education legislation in order to cope with international standards and practices.

-  Definition of policy regarding “new” services: e-learning.

The representative of Canada said that:

-  In Canada, the profession regulation falls under the exclusive jurisdiction of the provinces and each of those, including the three territories, has laws and regulations that directly or indirectly affect the status or operation of professions. While there are distinctions in the manner in which each Canadian jurisdiction treats professional groups, there is commonality in the approach in the sense that their respective legislation provides institutional structures that permit the professions to govern themselves.

-  Canadian experiences have shown that regional including bilateral fora afford much more flexibility in testing new approaches to the treatment of professional services but the support and the leadership from the professions themselves is an essential requirement for success. In this regard, the Canadian government is currently examining new elements related to licensing and certification in the context of its negotiations with Singapore and the Central American countries.

-  Some professional groups in Canada have themselves implemented new innovative approaches to facilitate cross-border movement. These include the development of temporary licensing regimes of project specific licenses for foreign architects and engineers and in the legal service profession the implementation of foreign legal consultancy regimes.

COST AND BENEFITS OF SERVICES TRADE LIBERALIZATION

During the meeting, Indonesia presented a progress report on how to study the costs and benefits of services trade liberalization. GOS members expressed two major concerns: selection of the coordinator and the number of bidders to be chosen. The APEC Secretariat underlined that Indonesia could look for help in the universities of the APEC members or research institutions in order to choose the coordinator of the project.

GOS agreed on a procedure to open-up this process for more bidders to participate and fulfill APEC Project Management Guidelines.

In the next days Indonesia will send a revised request for proposals on the "Study on the Costs and Benefits of Services Trade Liberalization" in different sectors in order to reflect the new timetable. This revised request will be sent to all GOS members. The representative of Indonesia will inform intersessionally about the progress of the potential bidders as well as any development of the project.

INNOVATION IN SERVICE INDUSTRIES INCLUDING E-COMMERCE

On July 9th, the Australian representative of GOS, sent a message informing about Dr. Tony Weir’s status project. He said that this paper is an Australia's contribution to the committee's report in 2002 on "new economy" issues. It includes a revised version of the chapter on service industries tabled at the February 2002 meeting of the Economic Committee, plus a new chapter of case studies and a short conclusions chapter.

He mentioned that the case studies presented in this report exhibit a range of such new services offerings, ranging from electronic banking, computerized travel reservation systems, to new ways of organizing retail supply chains, and even to “knowledge management” within businesses. Some of the services in question are offered not directly to consumers, but as “intermediate” services to other business. Indeed “business services” are one of the largest and fastest growing areas of many economies.

He stressed that capacity building is a priority for many APEC economies intending to participate in the WTO negotiations on trade in services and looking for ways to strengthen their participation in the multilateral trading system. The importance of capacity building was highlighted in the Doha Ministerial Declaration, in which WTO Members sought to place the priorities and interests of developing countries and least developed countries at the heart of the WTO's work program. The WTO is already working closely with a number of organizations, such as the global financial institutions and regional banks in the area of technical cooperation and capacity building.

WATCH GROUP TO REPORT PROGRESS IN THE ONGOING WTO SERVICES NEGOTIATIONS

In the absence of a report from the Watchgroup, the GOS Convenor briefed the Group about the most recent developments of the ongoing WTO services negotiations. This item will be kept for the next meeting and a Watch Group member will make a report on such issue.

STUDY ON IMPACTS OF TRADE LIBERALIZATION AND FACILITATION OF ENVIRONMENTAL SERVICES ON APEC ECONOMIES

The People´s Republic of China is working on a project entitled “Study of Impacts on APEC Economies of Measures to Liberalize and Facilitate Trade in Environmental Services” that has already received APEC funding.