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2012/SOM2/013
Agenda Item: 2(I)
Second Economic Committee Meeting - Chair’s Summary Report
Purpose: Information
Submitted by: EC Chair
/ Second Senior Officials’ MeetingKazan, Russia2-3 June 2012
APEC Economic Committee Second Plenary Meeting
May 30-31, 2012, Kazan, Russia
Chair: Mr. Raymond Greene, United States
Chair's Welcome
The Chair opened the meeting by welcoming Economic Committee (EC) members, and outlining the agenda for the next two days.
Introductions
Each attendee was invited to introduce themselves. Approximately 60 people attended the meeting representing 19 economies (Australia; Brunei Darussalam; Chile; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; Philippines; Russian Federation; Singapore; Chinese Taipei; Thailand; United States; and, Viet Nam). The APEC Secretariat, Convener of the Competition Policy and Law Group (CPLG), CTI Chair, APEC Business Advisory Council (ABAC), the Policy Support Unit (PSU), and the Pacific Economic Cooperation Council (PECC) were also represented.
Adoption of the EC1 Plenary Agenda
The meeting agenda (document no. 2012/SOM2/EC/001) was adopted without amendment.
Updates from the APEC Secretariat
Ms. Myung-hee Yoo updated the group on the projects that were approved during project approval session two in 2012 and provided timelines for the last project approval cycle in 2012 (document no. 2012/SOM2/EC/003). She also provided a brief update on the other developments at the APEC Secretariat (document no. 2012/SOM2/EC/004).
Dr. Denis Hew of the PSU provided an update on ongoing projects at the PSU (document no. 2012/SOM2/EC/005), including an Economic Trends and Analysis Report and the EoDB Interim Assessment for the APEC Economic Policy Report.
Advancing EC Objectives: FOTC and CPLG Contributions
CPLG
The Convenor of the CPLG, Mr. Yukinari Sugiyama presented a report on the main activities of the CPLG in 2012 (document no. 2012/SOM2/EC/006, 007, and 008). The main project is a training course on competition policy which was not funded in round 2. This will be resubmitted in the next round and expected to be completed in 2012. Ongoing projects include the Competition Policy and Law Database managed by Chinese Taipei and the survey on Information Exchange on Competition in the APEC region to be conducted during 2012. Next steps will be on the themes of investigative techniques, mergers, cartels, and bid-rigging.
FoTC on Competition Policy
Mr. Clayton Harrington (Australia) updated the EC on progress of the 2012 work plan for the FoTC (document no. 2012/SOM2/EC/009). The work plan contains four elements. The first element is assisting economies with the implementation of the ANSSR plans with respect to competition policy. Australia is sponsoring a micro-level workshop to assist APEC members in Asia with implementation of their ANSSR plans. Another workshop, sponsored by the United States, will follow the Australian model but focus on economies in the Americas and Russia. A macro-level workshop will focus on developing economies’ implementation of their ANSSR plans and will be held around SOM1 – 2013. The second element of the work-plan is a project entitled Measures of Competition Development in APEC being conducted by Russia in consultation with the CPLG and EC. The third element is simply a discussion of lessons learned on recent competition policy reforms that members have undertaken. The final element of the plan is about competitive neutrality, the idea that state owned enterprises should not have competitive advantages over competitors as a result of state ownership. Member economies are considering the recent OECD report and plan to share information on their approach to competitive neutrality.
FoTC on Corporate Law and Governance (CLG)
Mr. Nguyen Anh Duong (Viet Nam) reported on possible new projects in the area of corporate law and governance in 2012 (document no. 2012/SOM2/EC/010). The CLG sponsored this session’s IFRS policy discussion (see below). Vietnam will be circulating a proposal intersessionally for EC comment on assisting small and medium sized enterprises (SME) with CLG issues.
FoTC on Ease of Doing Business (EoDB)
Mr. Daniel Miller (United States), the Friends of the Chair (FotC) Coordinator for the Ease of Doing Business (EoDB) outlined the EoDB work plan (document no. 2012/SOM2/EC/012) including diagnostic studies (in Chile, Indonesia, Mexico, Peru, Philippines, Thailand, and Vietnam) and next step capacity building projects (in Peru and Indonesia) based on studies already completed. Economies were encouraged to propose projects against the EoDB multi-year plan. Next steps include intersessional development of a proposal to address improvements in the APEC EoDB issue areas that are not traditionally reported on by the World Bank methodology.
FoTC on Public Sector Governance (PSG)
Professor Tsai-Tsu Su (Chinese Taipei) outlined the five themes for the PSG to concentrate on: strengthening public administration, improving the quality of public service, leveraging ICTs to strengthen public sector governance, enhancing fiscal transparency, and strengthening trust, integrity, and ethics. The 2013 AEPR will focus on fiscal transparency (see AEPR section below). The next step for the FoTC is a project to assist member economies to improve governanced quality in the public sector.
FoTC on Regulatory Reform (RR)
Mr. Nobuo Kiriyama (Japan) introduced a briefing by Carlos Kuriyama (PSU) on Case Studies on Green Investments (document no. 2012/SOM2/EC/017). The study looked at the effectiveness of policies related to energy efficiency and renewable energy using a case study approach in Australia, Japan, United States, Indonesia, Philippines, and Thailand. The main conclusion is the importance of cost benefit analysis (CBA) when considering new regulatory policies. Though it was noted that the cost portion can vary (technical energy saved versus energy saved per dollar invested) depending on desired outcomes, the use of CBA is highly encouraged for all economies.
Next steps include proposed policy dialogue in 2013 on regulatory reform in green investments and further case studies focused on innovation and SMEs.
Policy Discussion: International Financial Reporting Standards
The EC held a policy discussion on International Financial Reporting Standards (IFRS). The discussion featured two panels: the first focused on lease accounting (document no. 2012/SOM2/EC/019), revenue recognition, and insurance contracts (document no. 2012/SOM2/EC/020); and the second on challenges of IFRS implementation (document no. 2012/SOM2/EC/021, 021a, and 022). Mr. Nguyen Anh Duong (Vietnam) moderated the panels. Representatives from North American Insurance Enterprises, The Bank of Tokyo-Mitsubishi UFJ, General Electric, and Japan Ministry of Economy, Trade and Industry, and New Zealand Ministry of Economic Development presented views and led the discussions.
The EC recognized the important work going on in the G20 and other international standard setting bodies and appreciated the input of the business community.
APEC New Strategy for Structural Reform (ANSSR)
Russia introduced their revised proposal and template on ANSSR implementation, reporting, and monitoring (document no. 2012/SOM2/EC/023, 024). Economies will be asked to complete the monitoring template in 2013, which is half-way through the five-year ANSSR initiative. The EC endorsed the proposal, and thanked Russia for their leadership on this effort. Australia briefed the EC on their upcoming self-funded micro-level capacity building workshop in Indonesia for Asian economies, which will be followed by a similar workshop in Peru sponsored by the United States for Latin American economies and Russia. The workshop aims to help economies progress the implementation of specific reform priorities and develop tailored projects for funding under the ANSSR sub-fund.. The United States also updated members on the status of the macro-level workshop now scheduled on the margins of EC1 in 2013. This workshop will take a broader view to the ANSSR implementation, and will also have a session on the monitoring and evaluation template that economies will have to complete next year.
Development of Innovation Cooperation in APEC
Russia presented their revised proposal to develop a measurement framework using innovation indicators that would reflect regional cooperation in the sphere of science, technology and innovation in the APEC region (document no. 2012/SOM2/EC/025). Economies raised concerns over whether the EC was the right fora to address such a technical proposal, and the comparative advantage of APEC to undertake such a project. It was decided that the Russian Federation would submit the proposal to the Industrial Science and Technology Working Group (ISTWG) for consideration and further discussion, and that at this point EC would not take this proposal for consideration.
Overview of Activities Across APEC Fora
Committee on Trade and Investment (CTI)
Ms. Monica Contreras, Chair of the CTI, presented an update on the ongoing work in this committee including NGTII, EGS, and supply chains.
APEC Business Advisory Council (ABAC)
Mr. David Dodwell made a presentation on the priorities of ABAC for 2012 (document no. 2012/SOM2/EC/026), highlighting fears of protectionism rising, ABAC’s efforts supporting FTAAP, and looking forward to the conclusion of TPP.
Pacific Economic Cooperation Council (PECC)
Mr. Eduardo Pedrosa addressed PECC’s overwhelming focus on economic threats such as over reliance on export driven growth. PECC is looking next at behind borders issues and conducting a survey of opinion leaders in July. Member economies are encourage to offer input for focus areas.
APEC Economy Trends and Analysis Report
Le Quynh Thai, Policy Support Unit (PSU), presented findings on the updated PSU Economic Trends and Analysis Report (document no. 2012/SOM2/EC/028, 028a). The report provides analysis on the recent economic performance and prospects of APEC economies including the impact of the Euro area crisis and changing oil prices. The report was first briefed in Moscow, and will be used to inform the EC, and APEC on the economic regional outlook. It was also noted that the report will be briefed at the next Senior Financial Officials Meeting (SFOM).
APEC Economic Policy Report (AEPR) Planning Session
AEPR 2012
The 2012 APEC Economic Progress Report (AEPR) is on the Ease of Doing Business (EoDB). The interim assessment, which was presented at EC1 in Moscow, will form Part 1 of the three part AEPR. According to the interim assessment, APEC made collective progress in the EoDB initiative equal to 11.6 percent, exceeding the 2011 interim target of 5 percent. Part 2 of the report will be a qualitative assessment of these results drawing upon examples provided in Part 3, the Individual Economy Reports. Due to the compressed schedule this year, it was agreed that an executive summary would be prepared to submit to the Annual Economic Leaders Meeting in September, with the complete version of the report being available online.
AEPR 2013
During EC1 it was decided that the 2013 AEPR would be focused on Public Sector Governance. After an intersessional survey facilitated by Chinese Taipei, the EC decided to focus on Promoting Fiscal Transparency and Public Accountability. Chinese Taipei circulated a draft outline of the report at EC2 (document no. 2012/SOM2/EC/030). Part 1 will be an introduction and an overview of APEC’s progress on promoting fiscal transparency and public accountability; this will be prepared by Chinese Taipei. Part 2 will cover key elements of fiscal transparency and public accountability; this will be prepared by Indonesia. Finally, Part 3 will consist of the Individual Economy Reports. The template will be finalized intersessionally.
AEPR 2014
Members discussed possible topics for the 2014 AEPR including regulatory reform, competition policy, ANSSR progress, good regulatory practices, and regulatory impact analysis. Further discussion will occur intersessionally, and a topic will be selected during EC1 in 2013.
EC Chair and Vice Chair Elections
The Chair reported that the Secretariat only received one nomination for the open EC Chair position, and no nominations for the 2013-2015 Vice-Chair position. The EC unanimously endorsed the nominee for Chair, Mr. Raymond Greene from the United States as the EC Chair for 2012-2013, and graciously accepted Mr. Rory McLeod’s extension for an additional year as Vice Chair. His term will now expire at the end of 2013.
Good Regulatory Practices
Updates from Economies
Members provided individual economy updates on good regulatory practices (GRP), one of the key priorities agreed upon by Leaders in 2011.
GRP Survey Results
Intersessionally economies completed a survey on the bottlenecks to GRP implementation. The results (document no. 2012/SOM2/EC/032) were discussed with the most frequent challenges falling into two main streams: the process/coordination/communication of GRP and the quantification of impact of GRP. Building upon these results, the United States will circulate a paper intersessionally proposing next steps on capacity building activities for members’ comments.
Enhancing Regulatory Impact Analysis within APEC
Australia updated the EC on its work on enhancing Regulatory Impact Analysis within APEC (document no. 2012/SOM2/EC/033). Australia is scheduling targeted capacity building training sessions for interested economies throughout 2012. The first training session provided to Russian regulatory officials in the margins of EC1 received very positive feedback, and economies were encouraged to work closely with them on scheduling the upcoming training sessions. Economies also discussed sharing best practices on this area.
Good Regulatory Practices: Online Database
The Russian Federation briefed members on their proposal on online databases for good regulatory practices (document no. 2012/SOM2/EC/034, 034a). Members welcomed the proposed partnership with the OECD, and saw the potential in this information sharing tool. On the other hand, some members expressed their concerns that EC should avoid overlap with discussions undertaken by other fora, such as SCSC. Members still had several outstanding questions which Russia will work on intersessionally. The proposal was also tabled in the Sub-Committee on Standards and Conformance (SCSC), and the EC asked Russia to inform the EC of the outcome of those discussions.
Non-Discriminatory Access to Air, Sea, and Ground Transportation Infrastructure Access
The Russian Federation presented their proposal on Non-Discriminatory Access to Air, Sea, and Ground Transportation Infrastructure Access. Members expressed the need for more time to consult with their experts, the potential challenges of addressing such a wide variety of regulatory sectors, and the suggestion that the proposal would be better discussed in the Transportation Working Group (TPTWG). The Russian Federation was asked by the Chair to consider questions and comments from members intersessionally.
Other Business
The document classification list was approved.
Chair's Closing Remarks
The Chair closed the meeting and stressed the importance of continuing work intersessionally, especially given the fact that the EC will not meet in person until the beginning of next year. He thanked the Russian hosts for their hospitality and the support of the EC in his election to the EC Chair.