REPORT OFTHE FOURTH SENIOR OFFICIALS MEETING FOR
THE SIXTH APEC MINISTERIAL MEETING
JAKARTA, 810 NOVEMBER 1994
1. The Fourth Senior Officials Meeting (SOM) for the Sixth APEC Ministerial Meeting was convened in Jakarta on 810 November 1994. Delegations from Australia, Brunei Darussalam, Canada, the People's Republic of China, Hong Kong, Indonesia, Japan, the Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, the Republic of the Philippines, Singapore, Chinese Taipei, Thailand and the United States participated in the Meeting. Members of the APEC Secretariat also attended. Representatives of the ASEAN Secretariat, the Pacific Economic Cooperation Council (PECC), and the South Pacific Forum (SPF) were present as observers. The delegation of Chile was also present as a guest of the Chair. The list of participants appears as Annex 1.
2. The Meeting was chaired by Mr. Wisber Loeis, Director General for Foreign Economic Relations, Department of Foreign Affairs of the Republic of Indonesia.
I. Opening Remarks
3. The Chair opened the meeting by welcoming delegates and observed that this meeting would be the final SOM for this year. He stressed that this Meeting offered the last opportunity to ensure that Ministers were provided with the substance they needed for their deliberations during the Sixth Ministerial Meeting. He emphasized that all pending matters needed to be resolved prior to the Ministerial Meeting. He therefore invited all delegates to exert every effort to make the Meeting a success.
II. Adoption of the Agenda
4. The agenda, adopted without amendment, appears as Annex 2.
III. Economic Trends and Issues (ETI)
A. Report of the Chairman of the Adhoc Group on Economic Trends and Issues
5. The SOM recognized the important contribution made by the Adhoc Group on ETI in preparation of the 1994 Ministerial Meeting. Canada, the ETI Chair, summarized the accomplishments of the Group.
6. Chinese Taipei had completed a comprehensive paper on the economic outlook of the region. The Outlook would underpin and provide a framework for the work of the Leaders, Ministers, Senior Officials, the CTI and the Working Groups, as well as provide an important output to publicize APEC's activities in the area of economic cooperation. The APEC Secretariat would publish and disseminate the Outlook under ETI's imprimatur.
7. The ETI had noted the progress on three additional papers currently underway under the auspices of the ETI including Japan's 3Es paper which contained an assessment of current levels and patterns of energy supply and demand with a view to arriving at a more balanced level and pattern in future.
8. The SOM welcomed Japan's paper entitled "Partners for Progress" on the promotion of further economic cooperation and development in the Asia Pacific region by reinforcing all the members' ability to effectively mobilize their human and other resources. The SOM invited Japan to further elaborate the proposal for study and subsequent consideration by the next SOM.
9. Indonesia had provided an update on the APEC Finance Ministers process. It had been agreed at the Finance Deputies' meeting in Madrid in October that the next Finance Ministers Meeting would be held on 1516 April 1995 in Bali, preceded by a meeting of Senior Finance Officials in Jakarta in March 1995. Deputies agreed in Madrid that short term capital flow would continue to be an important area of discussion by Finance Ministers and their officials.
10. The SOM noted that the ETI had developed a broad consensus that Canada would be chair and Thailand and Chinese Taipei would be Vice Chairs of the Economic Committee. All would serve for a term of two years.
B. Consideration of the Proposed Guidelines for Work Programs of the Economic Committee for 1995
11. The SOM noted that the Work Program of the Economic Committee for 1995 would be developed at it first meeting.
Senior Officials recommended:
Approval of the transformation of the Adhoc Group on ETI into an Economic Committee, together with its Terms of Reference (Annex 3).
IV. Trade and Investment
A. Report of the CTI
12.The SOM took note of the annual CTI report for 1994 (Annex 4) and expressedappreciation to the Chairman of the Committee for the significant progress made invarious elements of its program in 1994, including trade policy dialogue, customs,investment, tariff database and manual, administrative aspects of market access,standards and conformance, small and medium enterprises, the Uruguay Round, andexamination procedures for additional issues. Under the CTI Work Program, ChineseTaipei had completed its survey report on SMEs and had circulated its report to theSOM.
13. The SOM noted with interest work on the development of APEC nonbinding investment principles and agreed that the present draft constituted the basis for further discussion. Bearing in mind the importance of increased investment flow in the region, it was deemed important that APEC member economies proceed with constructive discussion towards an agreement on the nonbinding investment principles.
14. The SOM noted that the CTI endorsed the Terms of Reference of the Adhoc Group on Standards and Conformance and the Adhoc Group on Customs Procedures as SubCommittees. Senior Officials concluded that the establishment of the Sub-Committees would enable members to further increase cooperation in the fields of standards and conformance, and customs to achieve greater trade liberalization in the region.
15. The SOM discussed the Work Program of the CTI for 1995. It noted that the CTI agreed to incorporate the recommendations of the APEC Trade Ministers Meeting in Jakarta, 6 October 1994 into its 1995 Work Program, to continue the activities of the 1994 Work Program and incorporate the additional elements of competition policy.
B. Follow up on the decision of APEC Ministers in Charge of Trade
16. The SOM noted the result of the Meeting of APEC Ministers in charge of Trade. The SOM expressed the need to reflect results of that Meeting in the CTI's future activities.
Senior Officials recommended:
Adoption of the CTI report and approval of the 1995 Work Program of the Committee on Trade and Investment
V. Eminent Persons Group
Discussion on the EPG's Second Report to be presented to the Sixth Ministerial Meeting
17. The SOM held a brief exchange of views on the EPG Report and expressed appreciation of the report which merits deep and careful consideration (Annex 10).
VI. Human Resources Development
Discussion on ways and means for strengthening APEC cooperation in the area of Human Resources Development in all its aspects
18. The SOM was briefed by Indonesia on the progress of the draft proposal submitted during the Third SOM.
B. Discussion on the Draft Declaration on a Human Resources Development Framework for the Asia Pacific Economic Cooperation
19. The SOM proposed for the consideration of the Ministers a draft Declaration on HRD (Annex 5) which outlined the objectives and principles on the need for HRD, identified the elements of HRD in APEC and proposed as mechanism to formulate an annual work plan for HRD in APEC.
Senior Officials recommended:
Adoption of the draft Declaration on HRD
VII. Cooperation in Improving Public and Commercial Infrastructure
Discussion on ways and means for strengthening cooperation in the improvement of commercial and public infrastructure within the APEC framework
20. The SOM was briefed by Indonesia on the World Infrastructure Forum held in Jakarta, 1721 October 1994, and reaffirmed the importance of cooperation in the field of public infrastructure among APEC member economies. It was suggested that a comprehensive and regionwide approach be the basis for such cooperation.
21. Based on the discussions at the Third SOM, Indonesia introduced a revised draft paper containing proposals for cooperation in the improvement of public and commercial infrastructure. The paper included recommendations for increased public and business sector dialogue and involvement on the infrastructure issue, and for increased coordination on a regional basis.
22. The SOM endorsed the recommendations contained in the paper which constituted a basis for further work in this area, especially in the area of bilateral projects with regionwide impact (Annex 11).
VIII. Small and Medium Enterprises (SMEs)
23. The SOM was briefed by the Philippines on the importance accorded to SMEs in the APEC region. Japan outlined the results of the Ministerial Meeting on SMEs in Osaka, 2223 October 1994.
24. The SOM noted the report of the 6 October 1994 Meeting of the APEC Ministers in charge of Trade in Jakarta which recognized the importance of APEC work on SMEs, particularly the importance of SMEs in rapidly changing patterns of economic growth in APEC. The SOM noted that the strengthening and fostering of this sector was a key objective that must be accorded high priority.
25. The SOM also noted the report of the SME Ministers Meeting in Osaka which recommended the establishment of an Adhoc SME Policy Level Group which would report to the SOM. SOM finalized the Terms of Reference of the AdHoc Group which appears as Annex 6.
26. The SOM further noted that the diverse activities and projects on SMEs being undertaken in APEC needed closer coordination and considered the creation of the Adhoc Policy Level Group as a welcome development in this regard.
27. The SOM also noted that the SME Ministers had recommended that APEC commission an industrial outlook study to examine the effects of global interdependence and changing industrial structures relating to SMEs.
IX. Implementation of Leaders' Vision and Initiatives
A. APEC Leaders' Economic Vision Statement 1993: Progress on Themes
28. The SOM expressed appreciation for the paper presented by Canada under this item. SOM noted that the paper presented a useful survey of the breadth and scope of APEC's range of activities, relating them to the Seattle Leaders initiatives. It was agreed that the APEC Secretariat prepare the paper for public release following the Ministerial meeting as a contribution to public understanding of APEC activities (Annex 12).
B. Progress on the implementation of the APEC Economic Leaders' Initiatives on Blake Island
29. The SOM was briefed on Leaders Initiatives.
(i) The Pacific Business Forum
(ii) The Finance Minister's Meeting
(iii) The APEC Education Program
(iv) APEC Business Volunteer Program (BVP)
The APEC Secretariat made a brief presentation on the speedy facilitation of the APEC Business Volunteer Program (APEC BVP). The SOM agreed to adopt the APEC Secretariat's recommendations, noting that each member economy will inform each other of respective focal points (Annex 13).
(v) Non Binding Investment Principles
(vi) Energy, Environment and Economic Growth (3Es)
The SOM welcomed Japan's final report on the 3Es and noted that the purpose of the study is to foster mutual understanding on the importance of achieving economic growth, energy security, and environmental protection concurrently. It also noted the future issue in the study of improving the energy supply and demand structure in the region and the role of APEC therein, and noted that the report should be submitted to the Ministerial Meeting.
(vii) APEC Centre for Technology Exchange and Training for SMEs
The SOM welcomed the progress of the implementation of the APEC Center for Technology Exchange Training for SMEs. The Philippines reported that in the initial operationalization of the Center, a survey of SME resources and needs for technology exchange and training will be undertaken, after which an organizational workshop will be held in Manila in March or April 1995 (Annex 14).
The Philippines informed the SOM that it planned to locate the Center in Calabarzon, a rapidly growing industrial area south of Manila.
The Philippines proposed that, to save on resources, achieve synergy and promote cooperation and complementation, linkage and coordination of the various initiatives on SMEs be undertaken.
(viii) Small and Medium Enterprises Ministers Meeting
The SOM was encouraged by the result of the SMEs Ministers Meeting in Osaka, 2223 October 1994.
The SOM expressed its appreciation to Japan for hosting the Meeting and concurred with the SME Ministers Joint Statement. The SOM noted that a sound basis had been established for APEC SME Policy Dialogue and commended the introduction of private sector participation to a Ministerial Meeting in that it had clearly enhanced the practicality of the discussions. The SOM welcomed the decision to hold the Second SME Ministerial Meeting in Australia in 1995.
Senior Officials recommended:
that Leaders Initiatives be further pursued and be implemented within the APEC framework.
X. Business/Private Sector Participation
30. The Chair noted the continuing importance of this subject already well elaborated in previous SOMs.
XI. Membership and Organizational Issues
A. APEC Membership Policies
31. The SOM noted that, in discussing membership policy, it would be guided by the decision of the Fifth Ministerial Meeting in Seattle.
32. The SOM took note of various views on the issue of membership and associated issues.
33. The SOM noted that an informal group, in their personal capacities, was studying the modalities of APEC membership policy and other associated issues. A preliminary proposal was expected to be presented in 1995.
B. Requests for observer and other status
34. The SOM was informed by the Chairman that he had received requests from Colombia and Vietnam, APBNet and PBEC for observer status in APEC. At the request of the SOM, the APEC Secretariat provided the following information pertaining to membership, observer status and working group participation (see table below).
Requests for ParticipationAs Received by the APEC Secretariat
November 1993 October 1994
Countries/Organizations / Working Groups / Observer Status
Requested / Membership
Request
Columbia / Sixth Ministerial
Ecuador / AELM at Bogor
India / 1,2,3
Iran / Yes
Israel / 2
Mongolia / 1,2,3,4,5,6
Peru / 1,2,6,7,8
Russia / 3,4
Vietnam / AELM at Bogor / Yes
ADB / General
APB-Net / General
PBEC / General
1. Trade Promotion
2. Industrial Science and Technology
3. Regional Energy Cooperation
4. Telecommunications
5. Transportation
6. Tourism
7. Trade and Investment Data
8. Fisheries
C. Participation of NonMembers in the APEC Working Groups
35. The SOM noted the increasing interest of nonmembers to participate in APEC Working Groups. In this respect, the Chairman informed the SOM that Peru had requested participation in the Working Groups on Fisheries and Tourism.
36. In this regard the SOM noted the decision of the Fifth Ministerial Meeting which allowed for such participation if the guidelines approved by that Meeting were met. The SOM decided that the issuespertaining to participation of nonmembers in the activities of working groups/ observer status be referred to the Ministers.
D. Issues Related to the Structure of APEC
37. The SOM had a valuable discussion on the structure of APEC and the management of its working groups. Senior Officials considered the proposal on clusterization of the working groups in order to increase efficiency in their activities (Annex 15).
38. The SOM appreciated the Philippines's nonpaper on the guidelines for subcommittees, temporary working groups and task forces and requested it to further develop the nonpaper for discussion by SOM at its next meetings (Annex 16).
XII. APEC Secretariat
A. Report of the Executive Director of the APEC Secretariat (Annex 17)
39. The SOM was briefed by the Executive Director on the report and the progress of the APEC Communications and Database System (ACDS) and two introductory sessions on ACDS would be held in Singapore in the second half of November 1994 Singapore to promote the use of ACDS and link up the communicationsnetwork.
40. The SOM noted the report of the Executive Director on the work of the Secretariat in supporting Leaders and Ministers initiatives, the SOM's directives, and theAPEC Work Program in general. In addition, it noted the views of the Executive Director on possible ways to improve the existing system of management of theSecretariat.
41. The SOM expressed its deep appreciation of the work of the Secretariat and thanked Ambassador Rusli Noor for his leadership over the past year.
The SOM recommended:
that the Ministers note the good work of the Secretariat and endorse the Secretariat's continuing effort to improve APEC activities.
B. Discussion on the future structure of the APEC Secretariat
42. The SOM was briefed by Japan on its proposal to establish a task force for the review of the Secretariat.
43. The SOM discussed at length and endorsed the proposal to establish a task force with terms of reference as set out in Annex 7.The SOM suggested that representation in the Task Force be associated with representation in the BAC, at an appropriate level of responsibility.
Senior Officials recommended:
that Ministers endorse the establishment of the Task Force on the APEC Secretariat and its terms of reference.
XIII. Report of the Budget and Administrative Committee (BAC)
44. The BAC Chair reported on the work of the committee since the previous SOM. The Chair recalled that at the Third SOM in September questions were raised about the formula applied in the BAC's recommendation on the 1995 contribution levels for APEC members. Having considered the issue at its November 7 Meeting, the BAC recommended that, for 1995, all existing members' contribution should remain the same as the 1994 level, with Chile's contribution being assessed at US$55,000 (the same as that for Hong Kong, New Zealand and Singapore). This recommendation was made on the understanding that it should not be considered a precedent in future discussion of members' contribution levels in 1996 and beyond. The SOM adopted the BAC's recommendation. The SOM also noted that the BAC would review the overall formula for assessing members' contribution in 1995 to take into account all relevant developments and factors.
The SOM noted the BAC's offer of assistance in the review of the APEC Secretariat.
45. The BAC Chair reported that the Committee had considered the proposal of the Philippines regarding preparatory work for the APEC Center for Technology Exchange and Training for SMEs in the light of the Senior Officials' approval of central funding for the project at their third meeting. The BAC had found the redrafted proposal for US$40,000 to be in line with approved guidelines on allowable expenses. The SOM noted that the project funding would come from the budget category "High Priority APEC Initiatives".