Apec Sec Rep on Apec Dev

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2009/SOM1/ECSG/005

Agenda Item: IV

2009 APEC Secretariat Report on APEC Developments

Purpose: Information

Submitted by: APEC Secretariat

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:

APEC Leaders’ Statement on the Global Economy. Leaders committed to undertake all necessary measures to restore confidence in APEC economies and to keep the region on a path of long-term growth. Leaders also pledged to reject protectionism and to intensify engagement in the World Trade Organization (WTO) in order to achieve an ambitious and balanced conclusion to the Doha Development Agenda (DDA) negotiations.

Leaders welcomed the 2008 progress report on efforts to meet the 2007 long term agenda to strengthen the Regional Economic Integration (REI) and endorsed the 2009 work plan.

Leaders welcomed the outcomes of the Structural Reform Ministerial Meeting (SRMM), held in Melbourne in August 2008 and efforts to intensify the work under each of the five priority areas of the Leaders’ Agenda to Implement Structural Reform (LAISR).

APEC 2008 placed particular emphasis on the role that Corporate Social Responsibility (CSR) can play in the region, to improve the business environment and to integrate business activities with the goal of sustainable social and economic development.

With the aim of widening the social dimension of the APEC agenda, special attention was paid to intensifying the actions required to further reduce the gap between developed and developing economies. Strengthening capacity building efforts to achieve this goal was identified as a priority.

Considerable progress was made on human security issues, including in the areas of counter terrorism and secure trade, health, emergency preparedness and food and product safety. A series of productive capacity building initiatives were undertaken in these areas in 2008.

In response to instructions from Leaders and Ministers, APEC undertook activities to address the challenge of climate change through its work on energy efficiency, energy security and clean energy development.

Progress was made on the institutional reform. The APEC Policy Support Unit (PSU) became operational in July 2008 and APEC agreed on the conditions, responsibilities and accountability mechanisms related to the appointment of a fixed-term Executive Director of the APEC Secretariat, bringing to an end the system of annually rotating Executive Directors linked to the host economy. The selection process of the FT ED will begin early 2009 and culminate in the chosen candidate attending the AMM in November 2009.

2009 APEC priorities

APEC 2009 will take 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”.

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. Securing a global deal will help deliver new trade flows and will serve as the best possible firewall against protectionist pressures by locking in current levels of access for trade and investment flows.

Accelerate Regional Economic Integration

APEC will focus on:

1.-Strengthening Trade and Investment Liberalization (At-the-border).- APEC will intensify work to reduce tariffs, non-tariff barriers and other restrictions to trade and investment flows at-the-border. APEC will discuss ways to streamline the rules of origin amongst existing Free Trade Agreements (FTAs) to minimize the “spaghetti bowl” effect, reduce compliance costs, and increase FTA utilization rates. APEC will also study the various options of docking, merging or enlarging some of these FTAs to possibly form a larger regional FTA over time.

2.-Improving the Ease of Doing Business (Behind-the-border).- APEC will improve the ease of doing business by simplifying business regulations, as part of its larger structural reform agenda. APEC will identify and prioritize reform efforts to address key behind-the-border barriers, with inputs from the business community and making use of international tools and benchmarks such as the World Bank Ease of Doing Business Survey and the APEC-OECD Integrated Checklist on Regulatory Reform to build capacity for reform and ensure tangible benefits from our reform efforts.

3.-Enhancing Physical Connectivity (Across-the-border).- APEC will look into improving logistics and transport networks so as to enhance physical connectivity across-the-border. APEC will develop a comprehensive framework of initiatives that could further reduce the time, cost and the uncertainty involved in moving goods along the entire supply chain.

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. APEC will continue efforts to: strengthen and professionalize the APEC Secretariat; streamline its activities and explore innovative meeting formats to foster more informal interaction and meaningful exchange among member economies; and,forge closer partnerships with the business community.

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 with 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.

1. Regional Economic Integration (REI)

In Sydney, APEC Leaders endorsed a report on strengthening regional economic integration. The report outlines a wide range of practical actions that APEC member economies can take to promote and reinforce the integration taking place in the region. Leaders had also agreed to accelerate their efforts by:

further reducing barriers to trade and investment including through free trade agreements and regional trading arrangements;

improving economic efficiency and the regional business environment including capital markets;

facilitating integration in sectors such as transportation, telecommunications, mining and energy.

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. 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

APEC Leaders also endorsed the 2009 work plan for the APEC REI APEC Officials are expected to undertake further analysis on the likely economic impact, benefits and challenges of an FTAAP in 2009. The Friends of the Chair (FOTC) mechanism will continue to be utilised at both the CTI and SOM levels to oversee this work on REI.

1. 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 of15 model measurescompleted. 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.

APEC Ministers also instructed officials to continue the work to examine approaches to preferential rules of origin (ROO) on a sectoral basis. CTI and MAG will continue to oversee the work on ROOs with the aim of increasing knowledge of their similarities and differences, thereby allowing members to seek common approaches within APEC. A TPD on ROO is being scheduled for CTI2 in May 09.

1. 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 IAPs will be assessed by all APEC member economies through IAP peer review process to clearly identify what APEC members are doing individually and collectively towards specific APEC commitments. Ministers welcomed the SOM Chair's 2008 IAP Summary Report and the successful completion of the six 2008 IAP peer reviews (Canada, Chile, Mexico, Peru, Singapore and United States). The IAP Peer Reviews for Brunei, Indonesia, Malaysia, and Thailand will be held in the margins of SOM I and Philippines, Papua New Guinea, Russia, and Vietnam in the margins of SOM II this year in Singapore.

APEC Ministers also endorsed the 2008 Committeeon Trade and Investment (CTI) Annual Report to Ministers, which provided an overview of CTI's work program in pursuit of advancing the Bogor Goals of free and open trade and investment in the Asia-Pacific region. 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).

1. Investment

In 2007, APEC Ministers instructed officials to prepare an Investment Facilitation Action Plan (IFAP) for 2008-2010 which would provide greater coherence to APEC’s investment work, promote better understanding of the elements of a sound investment policy regime, address identified building needs and recognise the importance of further public-private sector dialogue. IFAP was developed by CTI and endorsed by MRT in May 2008. The IFAP for 2008-2010 shows guiding principles as working framework and menu of actions and measures, and 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 in2008. In addition to its 2008/2009 projects including capacity building activities, IEG has launched its initiatives to implement IFAP through its newly established Small Group, based on the achievement to date and in collaboration with other fora and ABAC as well as international organizations which have continued their valuable contributions to the IEG meetings and activities. 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.

1. Trade Facilitation

In 2008, the Committee on Trade and Investment adopted a set of KPIs and reporting methodologies to measure the progress of implementing the agreed actions and measures in TFAPII for implementation by sub-fora collectively.

In Lima, APEC Leaders endorsed the continued process of implementation of APEC’s Second Trade Facilitation Action Plan (II) 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.

For 2009, CTI will be working with APEC’s newly established Policy Support Unit (PSU) to develop a rigorous methodology by which to measure the effect of the implementing TFAP II. It will also examine the spectrum of issues related to trade logistics to build upon and widen the scope and benefits that have accrued to business since the launch of first trade facilitation action plan in 2001. A joint trade policy dialogue with the Economic Committee on the subject will be held in conjunction with CTI 1 on 18 February 2009.

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.

8.CapacityBuilding

CTI established an informal capacity building steering group (CBSG) that would help over the more strategic approach it had adopted to capacity building. The CBSG will play an important ongoing role in ensuring that capacity building strategies are better integrated into the formulation of new CTI initiatives. CTIagreed that the CBSG will work intersessionally (in consultation with the BMC, EC and SCE) to develop a strategy to promote capacity building in a more holistic way.

9.Intellectual Property Rights

In Lima, APEC Leaders reaffirmed their commitment to strengthen the protection and enforcement of intellectual property rights (IPR) in the region, and reiterated the importance of comprehensive and balanced IPR systems that provide for and protect the incentives that encourage creation and innovation. They agreed to continue promoting greater collaboration among IPR experts and enforcement authorities in the region.

Building upon issues addressed by the group last year and Leaders commitments on IPRs, Intellectual Property Rights Experts' Group (IPEG) will continue its efforts to deepen the dialogue on intellectual property policy, survey and exchange information on the current status of Intellectual Property Rights (IPR) protection and administrative systems, and study measures for the effective enforcement of IPR.

In January 2009, a workshop on “Effective Implementation of Model Guidelines on Supply Chain Integrity” was held in Hong Kong, China. The 28th IPEG meeting and a seminar on the topic of “From Mind to Market – The Highs and Lows of Technology Transfer” will be held in February 25-26, 2009 inSingapore. A workshop is also planned for April 1-3 in Melbourne, Australia on "Conducting Effective IPR Public Education and Awareness (PE&A) Campaigns for Small and Medium Enterprises (SMEs).” IPEG’s 29th meeting will take place in July 2009, and feature a workshop entitled “Trading Ideas – 2009.” The workshop will focus on, and facilitate learning and information exchange on the topic of IP commercialization and utilization between influential IP decision makers and IP owners in both the public and private sectors.

10.Government Procurement

The Twenty Eighth GPEG meeting was held on 15 August 2008, in Lima, Peru. The meeting was preceded by a capacity-building seminar on the Implementation of the Value for Money Non-Binding Principle (NBP) in Government Procurement from 13-14 August 2008.The meeting endorsed a project proposal on a Seminar on the APEC-wide Government Procurement Market Accessibility.The seminar is scheduled to take place in Seoul in July 2009.

11.Business Mobility

The BMG has been working in expanding the membership and participation in the ABTC scheme in order to continue to facilitate business travel and hence trade and investment in the APEC region; examining the options for managing the rapid growth of the ABTC scheme and to look at ways to enhance it, including ABAC’s suggestion to look at the viability of enhancing the card with biometrics.

BMG metat the margins of SOM III, in Lima, Peru. A workshop was organized to encourage Member Economies to adopt international standards in implementing their Frequent Passengers Program (FPP) by incorporating biometrics in the reading of their passports and identification documents (ID’s).

Consensus was reached on a set of KPIs and a methodology for 2008. The BMG Report submitted to CTI indicates progress has been made in most of the agreed eight Action areas including the ABTC, with a 169% increase in the number of active cardholders since end 2006 and a 79% increase in the year 31 July 2007 - 31 July 2008 (44,931 cardholders). Finally, members agreed to work towards the introduction of a biometric ABTC, subject to the availability of TILF funding. In a very important step, the BMG agreed to the participation of Canada as a transitional member of the scheme, making a total of 20 member economies.

At SOMI 2009, besides the plenary meeting BMG will hold an informal round table session on ABTC eligibility assessment. The title of this session is "Informal Round Table Session on ABTC Client Service".

12.Market Access Group (MAG)