Background of Asia-Pacific Economic Cooperation (APEC)
APEC - Advancing Free Trade for Asia-Pacific Prosperity
What is APEC?
APEC is an informal forum set up in 1989 for high level government-to-government dialogue on trade and economic issues. APEC aims to build a dynamic and harmonious Asia-Pacific community by championing free and open trade and investment, promoting and accelerating regional economic integration, encouraging economic and technical cooperation, enhancing human security, and facilitating a favourable and sustainable business environment.
APEC operates on the basis of non-binding commitments, open dialogue and equal respect for the views of all participants. Unlike the World Trade Organization (WTO) or other multilateral trade bodies, APEC has no treaty obligations required of its participants. Decisions made within APEC are reached by consensus and commitments are undertaken on a voluntary basis.
The annual highlight of APEC is the Economic Leaders' Meeting at which Economic Leaders meet informally to exchange views and to give political attention and support at the highest level to the APEC process. An APEC Ministerial Meeting is also held each year right before the Economic Leaders' Meeting to take stock of APEC's work in the past year and decide on the future work programme.
The Twentieth APEC Economic Leaders' Meeting (AELM) was held in Vladivostok , Russia on 8-9 September 2012. Following the meeting, Leaders issued a declaration with the theme "Integrate to Grow, Innovate to Prosper".
APEC comprises 21 member economies, namely, Australia; Brunei Darussalam; Canada; Chile; China; Hong Kong, China (HKC); Indonesia; Japan; Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; the Philippines; Russia; Singapore; Chinese Taipei; Thailand; the United States and Viet Nam. APEC also has three observers, namely the ASEAN Secretariat, Pacific Islands Forum and Pacific Economic Cooperation Council.
The APEC Chairmanship each year is decided by APEC member economies by consensus. The Economic Leaders', Ministerial and Senior Officials' Meetings in the year are hosted by the Chair. APEC 2012 is chaired by Russia and Indonesia will chair APEC in 2013.
Trade and Investment Liberalisation, Regional Economic Integration
As agreed in the 1994 Economic Leaders' Meeting held in Bogor , Indonesia , APEC's goal is to achieve free and open trade and investment in the Asia-Pacific region by 2010 and 2020 for industrialised and developing economies respectively. This is known as the Bogor Goals.
All APEC member economies implement Individual Action Plans (IAP) to guide them in their efforts to achieve APEC's Bogor Goals. The IAP review process provides each member economy with the opportunity to have their progress towards APEC's goals assessed by Independent Experts.
2010 was the target year for industrialised economies in APEC to achieve the Bogor Goals. While we do not regard ourselves as an industrialised economy in APEC, HKC has committed to achieving the Bogor Goals by 2010. As such, we voluntarily joined the relevant assessment conducted in 2010. The assessment report gave due recognition to HKC's tariff-free treatment for all imports, open services market, and liberal investment regime. In 2011, APEC endorsed the Bogor Goals Progress Report Guidelines to give direction to the process of reviewing APEC economies’ progress towards achievement of the Bogor Goals by 2020.
Next Generation Trade and Investment Issues
APEC is discussing practical, concrete, and meaningful actions that can take towards the achievement of the Free Trade Area of the Asia-Pacific (FTAAP). As an incubator of an FTAAP, APEC will continue to address "next generation trade and investment issues" that an FTAAP should contain. In 2012, APEC agreed to address transparency as the next generation trade and investment issue and endorsed the APEC Model Chapter on Transparency for Regional Trade Agreements/Free Trade Agreements to be used by APEC economies as a guide.
Given the importance of foreign direct investment to the regional economy, APEC is also implementing an Investment Facilitation Action Plan (IFAP) which aims at improving the investment environment. Current priority themes for IFAP are: enhancing stability of investment environments and protection of investments, improving transparency, efficiency and effectiveness of investment procedures, and building and maintaining constructive stakeholder relationships. A framework to credibly demonstrate progress achieved in IFAP implementation is also being implemented.
APEC List of Environmental Goods
In 2012, the APEC list of environmental goods that directly and positively contribute to the green growth and sustainable development objectives has been developed. APEC member economies commit to reducing the applied tariff rates to five percent or less on these environmental goods by the end of 2015, taking into account economies' economic circumstances without prejudice to their positions in the WTO.
Trade in Services
APEC supports the Action Plan on Statistics on Trade in Services and welcomes the expansion of the APEC Services Trade Access Requirements Database, as well as the development of other tools and indicators to assess the level of liberalisation in the services sector, including voluntary liberalisation.
Sustainable Management and Conservation of Wildlife
APEC is committed to strengthening efforts to combat illegal trade in wildlife, timber, and associated products, to implement measures to ensure sustainable marine and forest ecosystems management, and to facilitate sustainable, open, and fair trade of non-timber forest products.
Strengthening Energy Security
Member economies are committed to strengthening their energy security, promoting energy efficiency and developing cleaner energy sources for sustainable development. They aspired to meet a new APEC-wide regional goal of reducing energy intensity of economies by at least 45 percent by 2035, using 2005 as a base year.
APEC New Strategy for Structural Reform
In 2011, member economies identified specific structural reform priorities through 2015 under the APEC New Strategy for Structural Reform. A mid-term assessment will be conducted in 2013 to track progress.
Ease of Doing Business
APEC has set an APEC-wide aspirational target to make it 25 percent cheaper, faster and easier to do business within APEC economies by 2015 in five priority areas, determined with reference to the World Bank's Ease of Doing Business indicators. The five areas are: Starting a Business, Getting Credit, Enforcing Contracts, Trading Across Borders, and Dealing with Permits.
Strengthening Food Security
Member economies are committed to increasing sustainable agricultural production and productivity. The positive role of public-private partnerships and foreign direct investment in agricultural investment is well recognised. APEC agrees to strengthen domestic and international agricultural research systems and to facilitate better coordination, interaction and capacity-building among research institutes and innovation centres. APEC also encourages dissemination and utilisation of innovative technologies and will look for ways to mitigate the effects of agriculture on climate change and support efficient and sustainable use of agricultural and natural resources.
Recognising the crucial role of open and transparent agricultural trading system, and the potential price volatility caused by export restrictions on food, APEC has pledged against protectionism. Member economies are committed to developing food markets infrastructure and reducing post-harvest losses along the entire food supply chain.
Establishing Reliable Supply Chains
APEC is also bolstering efforts to improve the efficiency and security of supply chains in the region under the Supply-Chain Connectivity Framework Action Plan through building infrastructure and capacity, strengthening rules and institutions and streamlining procedures. A more systematic approach to addressing existing chokepoints in supply chains through targeted capacity-building will be adopted.
APEC will also continue discussion on the diversification of transportation routes in the region and resiliency planning; streamlining of customs procedures; and technological enhancement of supply chains.
To make regional commerce more secure, efficient, and resilient, APEC is committed to implementing the APEC Consolidated Counter-Terrorism and Secure Trade Strategy, and deepening cooperation and capacity-building across the Strategy’s priority areas of secure trade, travel, finance and infrastructure.
Intensive Cooperation to Foster Innovative Growth
Recognising the role of small, medium and micro-sized enterprises (SMMEs) in driving innovation, APEC is committed to assisting SMMEs' internationalisation, supporting export-oriented SMMEs, strengthening SMMEs' access to markets and financing, and promoting innovation as a key competitive advantage for SMMEs.
Member economies support the implementation of the Young Entrepreneurs Network and APEC Start-up Accelerator Initiative. They encourage collaboration among firms to foster their intellectual capital, optimise their core competencies, and minimise potential disputes.
Underscoring education as an essential driver of innovative growth, APEC supports pursuing practical and sustainable cooperation in this field. Efforts have been articulated to enhance the mobility of students, researchers, and education providers within APEC through the development of higher education cooperation.
More information on APEC's work and achievements can be found in the APEC website at www.apec.org.
Private/Business Sector Participation in APEC
The APEC Business Advisory Council (ABAC) was established by the Economic Leaders in November 1995 to provide advice to APEC on business sector priorities, and to respond to requests from various APEC fora for information about business perspective on specific areas. ABAC presents annual reports to APEC Economic Leaders. They contain specific recommendations for improving business conditions and expanding trade and investment facilitation and liberalisation in the region.
ABAC comprises up to three members of the private sector from each APEC economy, to be appointed by their respective Economic Leaders.
The ABAC Chair rotates annually in consonance with the APEC Chair. The host economy for the year is to designate one of its ABAC Members to serve as ABAC Chair. There are two ABAC Co-Chairs, one from the immediate past ABAC Chair, and another from the immediate future ABAC Chair.