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 Twenty-first APEC Economic Leaders' Meeting (AELM) was held in Bali, Indonesia on 7-8 October 2013. Following the meeting, Leaders issued a declaration with the theme "Resilient Asia-Pacific, Engine of Global Growth".
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 2013 is chaired by Indonesia and China will chair APEC in 2014.
Attaining the Bogor Goals
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 2013, APEC acknowledged the work on local content requirements and welcomed the APEC best practices to create jobs and increase competitiveness.
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. In 2013, the APEC Public Private Partnership on Environmental Goods and Services was established to enhance the work. APEC also agreed to explore trade in products that contributed to sustainable and inclusive growth through rural development and poverty alleviation.
Trade in Services
APEC commended the work to examine regulations, trade and investment in various sectors including financial services, cross-border education, retail services and logistics services. APEC encouraged further engagement among government, private sector and academia to address impediments to services trade growth including through conducting dialogues in future.
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 member 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. Progress has been on track so far.
As part of the work to achieve the Bogor Goals by 2020 and the Yokohama Vision of "Bogor and Beyond", APEC aspired to achieve a seamlessly and comprehensively connected and integrated Asia-Pacific. APEC envisioned a blueprint to accelerate and encourage balanced, secure and inclusive growth through specific measures.
Infrastructure Development and Investment
APEC committed to cooperate in developing, maintaining and renewing the physical infrastructure through a Multi-year Plan on Infrastructure Development and Investment. The Plan would assist APEC member economies to improve the investment climate, promote public-private partnerships, and enhance government capacity and coordination in preparing, planning, prioritising, structuring and executing infrastructure projects.
Supply-Chain Connectivity Framework Action Plan (SCFAP)
APEC agreed to accelerate work to achieve a 10 percent improvement in supply-chain performance by 2015 in terms of reduction of time, cost, and uncertainty including by advancing the systematic approach and developing capacity-building activities.
APEC endorsed the inventories of policy recommendations for various chokepoints identified in the SCFAP and recognised the contribution that global data standards could make and the importance of enhancing value chain resilience.
APEC New Strategy for Structural Reform (ANSSR)
In 2011, member economies identified specific structural reform priorities through 2015 under the ANSSR. A mid-term assessment was conducted in 2013 concluding that significant progress has been made by member economies in implementing their ANSSR plans.
Good Regulatory Practices (GRPs)
In 2013, APEC agreed to continue taking specific actions to develop, use or strengthen the implementation of the three GRPs identified in 2011, namely (i) ensuring internal coordination of regulatory work; (ii) assessing the impact of regulations; and (iii) conducting public consultations.
Promoting Cross-Border Education Cooperation
To foster cross-border education cooperation, APEC endorsed in 2013 the target of one million intra-APEC university-level students per year by 2020. APEC will conduct further work to enhance the mobility of students, researchers, and education providers, and the network of existing bilateral agreements, with the help of the "Work Plan on Promoting Cross-Border Education Cooperation".
Sustainable Growth with Equity
Taking into account the current condition of the global economy, APEC has been focusing on an agenda geared to bridge the development gap and maintain the path of sustainable growth with equity. APEC is also committed to implementing workable solutions that would increase resilience, sustain growth and decrease disparity, while improving the welfare of the people in the Asia-Pacific region.
Expanding Women's Participation in the Economy
APEC has agreed to expand women's participation in the economy by creating an enabling environment such as through the development of gender-related structural reform measures, improvement of the information and communications technology training support, as well as the development of entrepreneurial culture, equal access to quality education and employment opportunities and greater access to market and financial services.
Small and Medium Enterprises (SMEs)
APEC has also agreed to enhance SMEs' global competitiveness by improving access to finance and markets, supporting entrepreneurship, accelerating the growth of start-ups, strengthening capacities for business continuity and empowering SMEs in expanding to international markets and participating in global supply chains. APEC encourages regional collaboration to facilitate trade finance for SMEs, recognising that trade finance instruments can help facilitate trade and support SMEs in trading internationally.
Water, Energy and Food Security
Recognising that resource scarcity presents an immense challenge that has limited the ability to pursue economic growth, APEC committed to taking steps for addressing the nexus of water, energy and food security through the promotion of integrated policies and collaborative approaches. APEC endorsed the "APEC Food Security Road Map Towards 2020" to enhance supply chain connectivity, achieve efficiency, reduce post-harvest losses and wastes, and improve the food system structure by 2020.
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.