SUMMARY CONCLUSIONS OF

THE SECOND APEC SENIOR OFFICIALS MEETING (SOM II)

FOR THE ELEVENTH MINISTERIAL MEETING

CHRISTCHURCH

6-7 MAY 1999

1The Second Senior Officials Meeting (SOM II) for the Eleventh APEC Ministerial Meeting was convened in Christchurch, New Zealand on 6-7 May 1999. Senior Officials from Australia; Brunei Darussalam; Canada; Chile; the People's Republic of China; HongKong,China; Indonesia; Japan; the Republic of Korea; Malaysia; Mexico; NewZealand; PapuaNewGuinea; Peru; the Republic of the Philippines; Russia; Singapore; Chinese Taipei; Thailand; the United States and Viet Nam participated in the meeting. The Chairs of the Committee on Trade and Investment (CTI) and the Budget and Management Committee (BMC) were present. The APEC Secretariat also attended. Representatives from the ASEAN Secretariat, PECC and South Pacific Forum were also present as observers. The list of delegates appears as Annex x, page y.

IChair's Opening Remarks

2The meeting was chaired by Mr. Maarten Wevers of the New Zealand Ministry of Foreign Affairs and Trade. The Chair welcomed Senior Officials to Christchurch and made particular mention of Ambassador Javier Paulinich and Mr Kobsak Chutikul as new SeniorOfficials from Peru and Thailand, and Ambassador Richard Boucher as the incoming Senior Official from the United States.

IIAdoption of Agenda

3The draft agenda was approved and is attached as Annex x, page y.

IIIBusiness Arrangements

4The Chair briefed SOM on the arrangements for the Senior Officials' Meeting.

IVMinisterial Meeting on Small and Medium Enterprises held in Christchurch27-28April

5New Zealand reported on the outcome of the 6th APEC SME Ministerial Meeting held in Christchurch on 26-28 April 1999, and the associated meeting of the SMEPLG. (The Joint Ministerial Statement is attached as Annex x, page y.) SOM welcomed the enhanced policy focus being brought to SME issues, noting that Ministers had said that "SMEs will be the engine of growth in the knowledge-based economies of the future". It also noted that SME work provides a good framework for ECOTECH, especially in the HRD area.

6SOM agreed that the outcome of the SME Ministerial would be of interest to a wide range of APEC fora. SOM took special note that Ministers had stated that "if SMEs are to contribute to economic recovery and sustainable growth in the region, there is a need for economies to put in place open and transparent regulatory environments that are supportive of competitive markets and the development of human capital".

7 SOM noted the importance of working with business on SME issues and affirmed the successful new format for the SME Ministerial which provided for business input. SOM welcomed a report from Brunei Darussalam on its plans for an SME Ministerial and underlined the importance of involving SMEs in ABAC and in the CEO Summit.

8SOM welcomed the creation in Indonesia of an APEC Centre for Entrepreneurship, as proposed by the SMEPLG, and agreed that Indonesia would work with the APEC Secretariat to ensure that the criteria for use of the APEC logo were met by the Centre.

VTrade and Investment Liberalisation and Facilitation

(A)Individual and Collective Action Plans

IAPs

9Senior Officials reviewed progress with the work programme on IAPs agreed at SOM I:

  • IAP updates : Senior Officials agreed that the IAPs are a driving force for APEC liberalisation and called for this year’s IAP revisions to demonstrate clear progress towards achieving the Bogor Goals. They noted the need to focus on structural and regulatory issues, an area which had also been emphasised by SME Ministers.
  • IAP self reviews : SOM reaffirmed the importance of the self-review process, and welcomed Australia’s circulation of its draft self-review.
  • PECC assessment of IAPs : SOM expressed strong support for PECC’s independent assessment and welcomed the report from the Steering Group that agreement had been reached on the methodology for the assessment. It was noted that PECC would circulate a revised methodology by 24 May.
  • IAP voluntary peer review : SOM expressed appreciation of Australia’s wellprepared peer review which was held in the margins of the meeting. SOM noted that scheduling of peer reviews in the margins of SOM III (Brunei Darussalam, Japan, the Philippines and the United States) should be arranged to maximise participation by economies. SOM welcomed Thailand’s indication that it intended to put its IAP up for peer review.

10SOM agreed that it would be timely for a stocktake of progress with IAPs to be conducted at SOM III. SOM noted the importance of adhering to the 1 June deadline for submission of IAP improvements and the 1 July deadline for IAP self-reviews so that the SOM Chair could prepare recommendations on the IAP process for consideration at SOM III.

CAPs

11SOM thanked the CTI Chair for his report and endorsed the decision points captured in the report. (The report is attached as Annex x, page y.) It welcomed the review of CAP implementation since 1996 and indications of potential CAP improvements. SOM also endorsed the CTI Chair's recommendations on reform of management of the CTI, and noted suggestions made about documentation and the number of meetings.

12Senior Officials welcomed CTI's proposed work on services and its intention to develop a broader policy framework to carry it forward. They also welcomed Australia's proposal to develop options for publicising APEC's key achievements on trade facilitation and agreed on the importance of developing a forward work programme on trade facilitation. SOM stressed the need to involve the business community in this work.

13SOM welcomed the Chair's description of its 1999 APEC theme on strengthening markets. SOM considered that it was timely that CTI's next Trade Policy Dialogue would contribute to that by focusing on 'trade facilitation and revitalising the APEC regional economies through strengthening the functioning of markets'. Japan and Australia are to take the lead in coordinating preparations. SOM also welcomed Japan's initiative to revitalise APEC economies through strengthening of the market infrastructure as a welcome complement to the chair's theme. (Japan's proposal is attached as Annex x, page y.) SOM noted that Japan would develop this initiative further by inviting inputs from other member economies.

14The CTI Chair informed the SOM that he may need to complete his term early and that CTI needed to begin the process of selecting a successor.

(B)Strengthening the Multilateral Trading System

15 Senior Officials agreed that strengthening the multilateral trading system was a key area for APEC's work this year. They were encouraged by the exchange of views at the CTI Trade Policy Dialogue on the Third WTO Ministerial Conference. SOM noted that views on this issue were still evolving, but considered that there was potential for APEC to make an important contribution to this central theme at both the June Meeting of Ministers Responsible for Trade and the APEC Ministerial Meeting in September. SOM noted that APEC's contribution to the WTO would form an important part of the discussion at the Meeting of Ministers Responsible for Trade.

16Senior Officials concluded that the process was dynamic and that it was too early to draw firm conclusions on how APEC could contribute to the WTO's work this year. SOM agreed that the issue would be further discussed at SOM III by which point it would have a clearer sense of the sort of input APEC could have through the September APEC Ministerial Meeting and the AELM.

17The SOM noted that Korea had circulated a proposal for APEC to make a statement at either the June Meeting of Ministers Responsible for Trade or the September APEC Ministerial/Leaders' Meetings reaffirming APEC’s commitment to liberalisation, supporting the launch of a new WTO Round, and expressing concern at the possibility of a resurgence of protectionist sentiments. SOM noted that Korea was encouraged by the response that it had received and now proposed to hand over the task of drafting the statement to the Chair. SOM agreed that the Chair, in consultation with interested economies, would take on the role of drafting this statement some time after the June Meeting of Ministers Responsible for Trade.

(C)EVSL

18SOM reviewed progress made on the implementation of the NTMs, Facilitation and ECOTECH elements of the 15 EVSL sectors since SOM I. SOM noted that Ministers Responsible for Trade would review progress and would want to be in a position to announce deliverables at their June Meeting. Progress on ECOTECH and facilitation was promising with a number of projects having been proposed for APEC funding. On NTMs, Senior Officials urged intensive efforts and adherence to the timelines set by sectoral coordinators in order to complete work as scheduled. It was noted that SOM would need to report to the June Ministerial on progress achieved.

19On the "back six" sectors, SOM noted that there was general support for the type of approach outlined by the Chair, which was based around referral to the WTO of a proposed framework for negotiations. Senior Officials agreed that the SOM Chair would work with participating member economies intersessionally to finalise a proposal for recommendation to Ministers Responsible for Trade in June.

20 The SOM Chair briefed the meeting on the discussions in the WTO on the Accelerated Tariff Liberalisation (ATL) initiative. (The SOM Chair's report is attached as Annex x, page y). The meeting noted that New Zealand, as Chair, would continue with consultations with non-APEC WTO members, on the basis of comments received.

(D)E-commerce

21SOM welcomed the Electronic Commerce Steering Group's decision to meet in Auckland on 27-28 June. Senior Officials noted that the business sector would participate in accordance with the instructions of Leaders and the guidelines on business participation in APEC activities.

Y2K

22Senior Officials expressed appreciation for Japan's effort in organising APEC Y2K Week, 19-30 April. SOM also thanked Japan, Singapore, Canada and the APEC Secretariat for organising the APEC Y2K Symposium in Singapore on 22-23 April. SOM endorsed the Symposium's recommendations and development of a website linked to the APEC Secretariat homepage. They requested the coordinating economies to follow up with other members for reports on implementation of Y2K readiness measures, using the Symposium's recommendations as a basis for measurement. SOM recognised the critical importance of APEC economies working together on Y2K contingency planning. Senior Officials noted that they would need to report to Leaders on Y2K. SOM welcomed the presentation of the summary matrix of responses to the Y2K questionnaire prepared by Australia and noted that the completed questionnaire responses have been placed on a website linked to the APEC site.

VIEconomic and Technical Cooperation

23SOM welcomed progress being made with the ESC work programme. (The ESC Vice-Chair's report is attached as Annex x, page y.) With regard to improving coordination of ECOTECH activities, SOM welcomed the work underway to coordinate more effectively activities on human resource development and harnessing technologies for the future and encouraged member economies and Lead Shepherds of Working Groups to contribute to the exercise. It also agreed that improving the relationship between ESC and Working Groups should be accorded priority. SOM welcomed proposals for assessing and evaluating projects more effectively, including a proposed matrix to evaluate ECOTECH projects. It also welcomed ESC's intention to give further consideration to a proposal for a "Clearing House" website which would better match ECOTECH needs with capacity to meet them. SOM noted that the APEC Secretariat was developing a database of all APEC projects, including ECOTECH projects.

24The SOM welcomed Japan's concept paper on strengthening human resources development for structural reform and looked forward to its further development. (The proposal is attached as Annex x, page y.) SOM also noted that a Seminar for Public-Business Sector Partnership in Skills Development was currently being held in Penang, flowing from the KualaLumpur Action Program on Skills Development. SOM agreed that these were the kind of tangible projects required to build human capacity and strengthen institutions within member economies,

VIITasking related to new initiatives:

(A)SocialImpact of the Crisis

25The United States updated the SOM on work underway in various APEC fora, including the virtual Task Force, on strengthening social safety nets, and asked for further input from economies. Senior Officials welcomed an Australian proposal for APEC to work with the Asian Recovery Information Centre being set up at the Asian Development Bank. APEC's input would focus in particular on the impact of the crisis on children. The SOM noted that Australia had undertaken to write to economies soon with more details on the proposal and urged them to participate in the initiative.

26SOM agreed on the importance of APEC's work in this area and welcomed the leadership being shown by the United States. Given the dispersion of this work across many fora, SOM asked the APEC Secretariat to prepare a paper, in consultation with economies, on APEC's responses to the social impact of the economic crisis. Senior Officials agreed that the various work underway in this area would need to be brought together at SOM III into a substantive set of recommendations to Ministers and Leaders.

(B)Framework for the Integration of Women

27On behalf of the co-Chairs, New Zealand reported on the development of the Frameworkfor the Integration of Women in APEC by the SOM Ad Hoc Task Force on the Integration of Women in APEC. (The Report is attached as Annex x, page y.) SOM noted that the completed Framework would be presented to SOM III for approval.

(C)Food Issues

FEEEPJoint Actions

28SOM noted that there had been intersessional agreement to pass to the Economic Committee work on the costs and benefits of trade liberalisation and agricultural reform policies. SOM acknowledged the concern of the EC Chair that it will be important for the EC to have the active participation of relevant experts in this work.

Report of the Ad-hoc Task Force to Study ABAC's Proposal for an APEC Food System

29SOM welcomed the report from the New Zealand Co-chair and looked forward to the Ad-Hoc Task Force's final report and recommendations to SOM III. (The report is attached as Annex x, page y.) SOM reiterated the importance of this study given the priority which Leaders had accorded it, and the interest shown by the private sector, including as indicated in the ABAC Chair's dialogue with the SOM. SOM noted the cross cutting nature of food issues and the value of addressing trade promotion and liberalisation along with rural infrastructure development and technology transfer.

VIIIABAC

30The ABAC Chair, Hon. Philip Burdon, briefed Senior Officials on ABAC's plans and priorities for 1999. As Leaders' appointed business representatives, ABAC was determined to be engaged actively in APEC policy development and to provide it with credible substantive policy proposals. ABAC had critically reviewed its own structure and performance and planned to establish a new Chief Executive position to assist with policy development and strengthen ABAC's ability to dialogue with APEC. Mr Burdon said ABAC's 1999 recommendations to Economic Leaders were likely to focus on:

  • the financial crisis and domestic economic restructuring;
  • assessment of IAPs' effectiveness in demonstrating progress toward achieving the Bogor coals;
  • analysis of progress on past ABAC recommendations and APEC action plans; and
  • other key issues such as the APEC Food System, electronic commerce and air services liberalisation.

31Senior Officials welcomed ABAC's intention to strengthen its structure and interaction with the official APEC process. They encouraged ABAC to provide advice on business facilitation issues which APEC should address as a matter of priority. It was suggested that ABAC provide Leaders with a smaller number of more focused recommendations and increase domestic outreach to a wider business constituency to overcome the image of ABAC as an elite group. Senior Officials also urged ABAC to assist with implementation of APEC initiatives, including financial support from business for ECOTECH activities. Senior Officials reaffirmed the value of regular dialogue with ABAC.

IXManagement and Budget Issues

(A)BMC Report

32The BMC Chair presented his Report and SOM endorsed its recommendations. (The BMC Chair's Report is attached as Annex x, page y.) SOM noted that the BMC would discuss at its July meeting whether funds need to be set aside to cover priority initiatives which might arise from the Auckland Leaders’/Ministerial meetings.

(B) APEC Secretariat report

33SOM received the Executive Director's Accountability Statement and approved the following:

  • TELWG's recommendation that the landmark APEC Framework for the Interconnection of Telecommunications Networks be brought to the attention of APEC Leaders; and
  • EWG’s request for covering approval for Mongolia to renew its guest status in EWG, to be valid until the end of 2001.

34The Executive Director's Statement is attached as Annex x, page y.