2011/SOM3/EC/002
APEC ECONOMIC COMMITTEE
FIRST PLENARY MEETING FOR 2011
5-6 March 2011
Washington DC, United States
CHAIR’S SUMMARY REPORT
The APEC Economic Committee (EC) held its first plenary meeting for 2011 on 5-6 March 2011 in Washington DC, United States. The meeting was chaired by Dr Takashi Omori of Japan, and attended by 20 APEC member economies (Australia; Brunei Darussalam; Canada; Chile; the People’s Republic of China; Hong Kong, China; Indonesia; Japan; the Republic of Korea; Malaysia; Mexico; New Zealand; Peru; the Philippines; the Russian Federation; Singapore; Chinese Taipei; Thailand; the United States of America; and Viet Nam). Papua New Guinea was not represented.
1. The APEC Senior Official from the United States (US), Chair of the Committee on Trade and Investment (CTI), Convener of the Competition Policy and Law Group (CPLG), the Senior Finance Officials’ Meeting (SFOM) Chair, Director of the APEC Policy Support Unit (PSU), the Lead Shepherd of the Human Resource Development Working Group (HRDWG) and a representative from the APEC Business Advisory Council (ABAC) attended various parts of the EC meeting to provide briefings. Other attendees included the APEC Secretariat Executive Director and the Secretary-General of the Pacific Economic Cooperation Council (PECC).
2. The EC plenary meeting was preceded by a number of EC-related activities, including two Workshops on “Advancing Good Corporate Governance by Promoting Utilisation of the OECD Principles of Corporate Governance”, which was held on 2 March 2011 and “Using Regulatory Impact Analysis to Improve Transparency and Effectiveness in the Rulemaking Process” held on 3-4 March 2011. Three Friends of the Chair groups (FotCs) meetings were held concurrently prior to the EC Plenary on the morning of 5 March 2011 (i.e. the FotCs on Competition Policy, Ease of Doing Business and Corporate Governance and Law).
Chair’s Opening Remarks and Introductions
3. EC Chair opened the first plenary meeting for the year and welcomed new FotC Coordinators and contributions by members in the meeting. EC Chair outlined the four proposed key objectives for the meeting, namely:
· Review the updated FotC work plans and consider prospective activities thereof;
· Discuss what the EC can contribute to APEC’s 2011 priorities including ANSSR;
· Discuss how to measure progress on EoDB through the end of 2011; and
· Endorse the composition and publication schedule of the AEPR 2011 and discuss the themes of the AEPR 2012 and beyond.
4. EC Chair thanked the FotC Coordinators and the CPLG Convenor for their excellent preparation for EC1. EC Chair then welcomed Ambassador Muhamad Noor, Executive Director of APEC Secretariat, to the EC1 meeting. In his remarks, Ambassador Muhamad Noor mentioned briefly three points:
· In anticipation of the presentation by the US SOM on 2011 priorities, members should take the message from the SOM Chair’s office in the context of trying to ensure alignment between what was being done in various levels of APEC (Leaders, Senior Officials, Committees, subfora) so as to ensure effective outcome for 2011;
· The APEC Secretariat was working hard to improve the project management processes as key implementation of decisions and key overall effectiveness of APEC; and
· Efforts to improve and professionalise the Secretariat including the work related to project management was on-going in line with the APEC Secretariat 3 Year Strategic Plan tabled in 2010.
5. The US as the host for APEC 2011 welcomed APEC delegates to Washington DC and the first Senior Officials Meeting (SOM) for 2011. The US looked forward to accomplishing this year’s priorities and appreciated efforts of the Secretariat in preparing for the meeting.
Adoption of the Agenda
6. The EC1 agenda (document no. 2011/SOM1/EC/001) was adopted, with agenda item 3, Remarks by US SOM, moved to Day 2 of the meeting.
SOM Chairs’ Remarks
7. US SOM (Mr Kurt Tong) welcomed members on behalf of the SOM Chair (Mr Michael Froman) and the US team. He noted the importance of the US hosting APEC this year. .
8. US SOM noted that 2010 was a good year with important accomplishments in Yokohama, in particular the outlining of the vision for the future of APEC and the Growth Strategy, which called for economies to work not only to address traditional trade and investment issues but also to make a seamless regional economy by closely cooperating in a more holistic fashion. US SOM added EC had impact on both of the 2010 accomplishments, especially in light of inclusive and balanced growth, which would feed into the framework of the ANSSR.
9. US SOM expressed that APEC 2011 was to show APEC could get stuff done and briefed EC on the three priorities for the year: i) strengthening regional economic integration and expanding trade; ii) promoting green growth; and iii) advancing regulatory cooperation and convergence. EC would play an important role, especially in the ANSSR and the regulatory cooperation and convergence theme. US SOM explained that the best way to approach work in the regulatory area was through addressing how economies could cooperate to achieve seamless regional economies. Noting the differences between economies, members should work together to resolve trade issues as well as future regulatory issues. The strong agenda received enthusiastic backing by the US President and gained a ground for active discussion in APEC. US SOM also emphasised the result-orientation of the themes and the need for / utility of greater cooperation between public and private sectors going forward. As such, EC was looked upon to closely collaborate with the Senior Officials’ process and provide intellectual support for that exercise to make it effective.
10. A number of economies including, Canada, Hong Kong, China and Russia sought clarifications from the US SOM on the role of EC with regards to the APEC Leaders’ Growth Strategy, in particular the relevance of EC’s work to green growth, collaboration within APEC in the growth areas, as well as the link between competition policy and liberalisation of trade. Regarding green growth, the HRDWG Lead Shepherd also noted that key elements could be through the advancement of human resource development and knowledge based economies.
11. In responding to the various queries and comments by members, the US SOM made the following points:
· The SOM FotC on Green Growth would be looking at the process to push forward these activities relating to green growth. Even though the work on green growth did not directly fall under EC, EC members should also be aware of some of the work being undertaken on inefficient fossil fuel subsidies that encourage wasteful consumption. EC Chair was expected to participate in the SOM FotC on Green Growth, which could discuss what EC might possibly do to support the work in this area.
· A number of green growth activities were taking place, not just in APEC, but in organisations such as the OECD, in 2011. From SOM Chair’s Office perspective, APEC could add value on specific things for which economies in the region could push forward actions rather than extensive deliberations and debate.
· It could be a challenge to organise a range of activities in practical ways in line with desirable paths for growth in the region. Due to the difference among economies in terms of development status, it was particularly important that all economies saw these aspects as very crucial. Senior Officials would be discussing this in the SCE-COW policy dialogue on Growth Strategy, focusing on inclusive and sustainable growth.
· Work on competition policy was important and EC and CPLG were expected to continue discussion on this element.
APEC New Strategy for Structural Reform (ANSSR) and APEC 2011 Priorities
12. EC Chair outlined the discussion on ANSSR and APEC 2011 Priorities, which included discussion on how to implement ANSSR in EC’s activities and where EC could contribute in wider ANSSR framework. Short discussion papers on ANSSR to be used at the coming SOM ANSSR FotC had been distributed a few days prior to the meeting by the US, which served as another input to the discussion on the topic.
13. EC Chair’s Assistant (Mr Tadashi Yokoyama) briefed the meeting on the Chair’s paper (document no. 2011/SOM1/EC/004). Mr Yokoyama elaborated that the paper was prepared to present some issues for discussion on how EC could contribute to the ANSSR agenda towards 2015. At EC, the discussion was divided into two parts; the first was on how to implement ANSSR in EC’s activities with the horizontal approach in its five reformulated work streams succeeding the LAISR priorities. The second part was on EC’s contribution to the wider ANSSR framework. Under the ANSSR, each economy was expected to make its own plan setting forth priorities for structural reform in relevant areas as well as objectives, policies and approaches to measure progress toward the objectives by 2015. SOM took the primary responsibility of this process with cooperation from all relevant fora, including EC. Discussion points prescribed in the paper had been prepared based on the information available at the time.
14. The US was invited to lead the discussion and presented the basic outline of the ANSSR (document no. 2011/SOM1/EC/034). Acknowledging that EC had a rich history of promoting structural reform, the US noted that the goal of reform was to contribute to better efficiency of markets in accordance with Leaders’ call for all economies to raise the bar in efforts for achieving strong, sustainable, and balanced growth. The US outlined three key elements of the ANSSR: i) identifying priorities and setting forth plans; ii) encouraging reform; and iii) providing capacity building support. A series of events to help economies prepare their plans was presented, in which the US encouraged participation from economies, particularly developing members. Activities being planned included:
· The SOM FotC on ANSSR. The first meeting was to be held on 10 March, which would discuss how member economies could build ANSSR plans, including capacity-building activities engaging relevant fora and subfora, identifying potential elements of ANSSR plans, and seeking early movers to develop draft plans by SOM3 to serve as examples to others;
· A symposium on ANSSR was planned to be held during SOM2 in Big Sky, Montana. The introductory symposium would promote discussion on ANSSR priorities and implementation among Senior Officials and structural reform practitioners. The US acknowledged Australia for contributing significantly to the work;
· A residential training course scheduled to be held in August in Singapore, which was also an Australian-led initiative; and
· A workshop on approaches to assess the progress of structural reform work which was expected to be held in September in the margins of SOM3 meeting in San Francisco, US.
Other preliminary ideas being discussed included:
· Making use of practical tools developed by EC through a web-based toolkit which could make these references readily available for economies to access. EC had compiled a lot of documents and tools, such as AEPR 2006 on structural reform, PSU’s 2009 Handbook for Voluntary Reviews of Institutional Frameworks and Processes for Structural Reform and others;
· Identifying a consistent approach to present plans, including consideration of utility in developing common elements of ANSSR plans across economies. Even though the forms and mechanism are up to economies, it would be helpful to provide some structure in terms of reporting the overall process to facilitate compilation; and
· Developing a survey to help economies identify structural reform priorities under ANSSR, which might be of interest for the Policy Support Unit (PSU) to work on, based on the voluntary review mechanisms available.
15. The US concluded by reiterating the anticipation of a strong role for EC in the ANSSR agenda and calling for work to be taken forward for 2011 and beyond, and hoped that members would participate strongly, including submissions of possible project proposals for funding through EC.
16. Australia outlined its contribution and progress relating to the ANSSR initiative. It welcomed Leaders’ endorsement of ANSSR in Yokohama and believed that greater focus by APEC on structural reform was vital to sustain regional prosperity. As announced by Australian Prime Minister in November last year, Australia would be contributing AUD 3 million on the structural reform initiative focusing on activities to be undertaken by economies to boost productivity and growth, which would support the implementation of ANSSR. The main component of the initiative called the “Australia-APEC Partnership for Economic Reform Fund”, which made AUD 2.5 million available over 3 years, was for economies to identify their priorities and design appropriate measures to address and implement the priorities. The other component was the series of symposium, training course and workshop that Australia was going to develop as indicated by the US in its lead presentation. These activities would support economies in preparing their structural reform plans under ANSSR as well as assisting developing economies to draft proposals applying for the fund. Details on the fund were being worked out, and it was expected that the fund be managed by the APEC Secretariat.
17. EC Chair thanked Australia for its contribution and brief outline of the activities. EC Chair suggested the following ideas on the exercise regarding ANSSR priorities and how EC could contribute:
· Soon after an economy decides on priority areas, EC members were requested to inform relevant FotCs if those priority areas included EC-related issues (according to the US’s discussion paper, economies might express their priorities in advance of EC2);
· If an economy was considering possibility of including EC issues in its priority areas, the economy was welcomed to inform EC through the relevant FotCs on a provisional basis, retaining the freedom to withdraw the notice later on. Such information would provide EC with an opportunity for further discussion on its contribution to ANSSR; and
· Based on expressions of possible priorities from members, EC at its next EC2 Plenary would discuss how best EC could assist the efforts of economies over the coming years to realise the stated objectives.
18. EC Chair’s Assistant (Ms Akane Nagahisa) then briefed members on the naming of the post-LAISR structural reform activities to be undertaken after 2010, which had been proposed by EC Chair at EC2 in 2010. The result of the initial vote on the names nominated by members was presented in document no. 2011/SOM1/EC/005. On the naming exercise, EC Chair expressed hesitations on certain proposed names, in particular, “LAISR 2015”, as it might give an impression that EC’s work was not part of ANSSR, and explained that EC could give more consideration on the name selection prior to the second round of voting.