1998 Meeting of APEC Ministers Responsible for Trade

APEC Ministers Responsible for Trade met in Kuching on 22 - 23 June to review progress on the implementation of instructions given by Leaders in Vancouver and the ongoing APEC work programme on trade and investment liberalisation and facilitation. Ministers exchanged views on the current economic situation, developments in international trade and on APEC's contribution to the work of the World Trade Organisation. Ministers also engaged in a dialogue with ABAC on APEC's response to the 1997 ABAC's recommendations and on broadening APEC outreach to a wider segment of the business/private sector.

The Meeting of APEC Ministers Responsible for Trade is being held during a period of financial and economic turmoil in the East Asian constituents of the APEC region. It was noted that the turmoil has had its impact on a broad spectrum of economic sectors, curtailing the capacity to generate economic growth. It has also brought about social ramifications that are and will continue to be far-reaching. APEC member economies recognised that regional and global economic inter-linkages and interdependence can have a contagion effect on other economies outside the region. While individual APEC economies affected by the financial turmoil must undertake domestic policy initiatives to effect economic recovery, other APEC member economies could, where possible, assist in the process of economic recovery. APEC may not be the mechanism for direct intervention, but it is important that APEC supports initiatives to manage the financial crisis - both in terms of the causes and impacts.

3. Ministers considered the report of the SOM Chair and noted that officials have made significant progress since Vancouver in further developing the EVSL initiatives, based on APEC's principle of voluntarism. Ministers recognised that specific concerns have been raised by individual economies in each sector.

4. There is emerging consensus on product coverage, target end rates and target end dates, and Ministers endorsed the recommendations of Senior Officials, as a means to further progress work in the fast-track sectors.

5. Participation in the 9 sectors and all three measures (trade liberalisation, facilitation, and ecotech) in each sector will be essential to maintain the mutual benefits and balance of interests, which Leaders had established when selecting the sectors in Vancouver.

6. In order to enable finalisation of the sectoral arrangements that would maximise participation, Ministers agreed that flexibility would be required to deal with product-specific concerns raised by individual economies in each sector. Such flexibility would generally be in the form of longer implementation periods. In principle developing economies should be allowed greater flexibility.

7. Ministers agreed that consideration of other forms of flexibility should take into account the broader goal of maximising mutual benefits, and the need to maintain the balance of interests.

8. Ministers also noted the significant work done on NTMs, facilitation and ecotech, and endorsed the existing implementation schedule, and the related work programme in these areas. Ministers regarded facilitation and ecotech as important elements of the EVSL initiative, and agreed that such measures continue to be identified for implementation.

9. Ministers agreed that all sectors containing tariff liberalisation proposals be communicated to the WTO by APEC Chair for transparency purposes once all details of the sectoral proposals are finalised.

10. Ministers instructed senior officials to continue work to finalise by September the sectoral arrangements on the fast-track sectors on the basis of decision taken at this meeting, and further develop the other six sectors.

11. Ministers will consider the final agreements/arrangements of each sector in its entirety at the Ministerial Meeting in November, with a view to commencing implementation in 1999.

12. Ministers welcomed and endorsed the preliminary plans of member economies to implement and improve their Individual Action Plans (IAPs) for 1998. Ministers noted that despite the adverse impacts of the current financial crisis, members remained committed to IAP improvements and implementation. They reaffirmed that the IAP is the primary mechanism for implementation of APEC's trade and investment liberalisation and facilitation (TILF) agenda. Ministers recognised that improving IAPs is a continuous and progressive process and urged members to continue to strengthen their IAPs in terms of transparency, level of detail and specificity. Ministers stressed that faithful implementation would lend credibility to the Plans.

13. An added value of IAPs is that they provide member economies with the opportunity to draw on the experiences and approaches of other member economies in undertaking liberalisation and facilitation. Members can draw on these experiences and adopt and incorporate such best practices in improving their IAPs.

14. In an effort to make IAPs more effective in meeting the needs of business, Ministers noted that IAPs should continue to take account of ABAC recommendations. They noted that some of these recommendations have already been implemented while others are under consideration. Member economies will continue to take into account the views of the business/private sector in the improvements of the IAPs.

15. Ministers commended Malaysia for submitting its IAP for peer review in Kuching. They welcomed Korea's decision to present its IAP for peer review in September at the margins of SOM III. It was acknowledged that bilateral consultations and voluntary peer reviews are confidence building measures that will facilitate exchange of information and contribute towards transparency and comparability of the IAPs. In this context, interested member economies were encouraged to volunteer their IAPs for peer review.

16. To further advance work on IAPs, Ministers agreed that:

member economies submit revised IAPs, including the financial sector, according to the revised format guidelines by October 15;
member economies continue to give consideration to the views and opinions of the business/private sector in formulating their IAPs.
17. Ministers called for a report on revised IAPs to be submitted to them in November for their review.

18. Ministers reaffirmed the importance of Collective Action Plans (CAPs) for advancing APEC's TILF agenda. Ministers welcomed work to further enhance and implement CAPs, including work underway on more than 80 CAPs activities. They stressed the importance of trade and investment facilitation activities in APEC in the 15 areas under Part I of the Osaka Action Agenda. Ministers took note of the SOM Chair's Report on collective actions and endorsed the list of over 30 TILF outcomes for 1998. These outcomes are expected to contribute towards reducing transaction costs and facilitating business activities such as movement of goods, capital, services and business people.

19. At this time of financial turmoil in the region, APEC's trade facilitation activities would contribute to improving the capacity and confidence of members in their liberalisation efforts. In this context, Ministers also noted the need to prioritise projects in order to make efficient use of limited resources and maximising benefits to members.

20. In advancing work on CAPs, Ministers :

endorsed the collective commitments of APEC economies to grant multiple entry visas to regular business travellers through unilateral or bilateral means, unless there are reasonable grounds not to do so; and
agreed that capacity of member economies be enhanced through training and technical cooperation programmes to ensure effective implementation of CAPs.
21. Ministers further instructed that a report be submitted in November on:

22. Ministers welcomed the report of the Task Force on Electronic Commerce and noted the progress of work in both the Task Force and other APEC sub-fora.

23. Ministers endorsed that the second stage of the work programme which would include possible development of principles and practical cooperative activities for promoting the use of electronic commerce in the region, recommendations on technical cooperation and capacity-building activities, including on public sector use of electronic commerce, as well as outreach and training programmes. Ministers also endorsed the programme of information exchange and technical cooperation to address the "millennium bug/Year 2000" problem and to identify impediments to electronic commerce in the region.

24. In advancing the work programme, Ministers requested the Task Force to take into account:

25. Ministers welcomed the progress report by the Steering Group on work to develop an APEC-wide programme to assess and promote the understanding of the impact of trade liberalisation. There will be a two-stage implementation plan, involving analytical work on five case studies in Phase I and the development of a strategy for communicating the findings of the study in Phase 2. Ministers welcomed the offer of New Zealand to host a seminar on communicating the outcomes of the Study under Phase 2 of this project just before the next Trade Ministerial Meeting in New Zealand in June 1999.

26. Ministers recognised that the study is timely and relevant especially during this time of economic difficulties and concerns expressed over the benefit of further liberalisation. Ministers reaffirmed the importance of promoting a broad-based and balanced understanding of the impact of liberalisation, taking into account both benefits as well as the associated adjustment costs. In this context, they underscored the importance of selecting appropriate sectors to reflect this approach.

27. Ministers expressed satisfaction with the outcomes of the Second WTO Ministerial Conference and welcomed the agreement to embark on a work programme which include the implementation of existing Uruguay Round Agreements, the built-in agenda, and recommendations concerning other possible future work on the basis of the work programme initiated in Singapore and recommendations on other matters proposed by members. In this regard, Ministers welcomed the Statement presented by the APEC Chair at the Conference, which underlines APEC's commitment to open regionalism and multilateral trading system.

28. Ministers recognised the importance of APEC's on-going programme of activities which support work in the WTO, in particular seminars and training activities on the implementation of WTO agreements such as customs valuation, subsidies and CVD, TRIPs and Services. They agreed that these activities should be continued. Ministers also agreed that APEC's on-going information exchange on electronic commerce would be an important contribution to the WTO.

29. In recalling APEC's role in ITA I, Ministers called for a successful conclusion of the ITA II, with a balanced outcome that takes into account interests and concerns of members.

30. Ministers welcomed the briefing by Mr. Timothy Ong on the 1998 priorities of ABAC and confirmed APEC's intention to continue to work closely with ABAC. Ministers noted ABAC's view on APEC's work in EVSL, electronic commerce and APEC action plans. ABAC acknowledged the need for capacity building to complement APEC's liberalisation efforts.

31. Ministers' confirmed that APEC fora have responded positively to the recommendations contained in ABAC's 1997 Report to Leaders in the areas of promoting cross-border flows, enhancing private investment in infrastructure and access to capital as well as in implementing economic and technical cooperation. Ministers expressed their desire to continue to work closely with ABAC for liberalising and facilitating trade and investment in the region. Minister also called upon ABAC to reach out to domestic business groups including small businesses so that APEC activities would permeate through a broader cross-section of the business sector.

32. Ministers welcomed remarks from members-designate, Peru, Russia and Vietnam on their preparations to assume full membership in APEC in November. Ministers also received reports from representatives of the Pacific Economic Cooperation Council (PECC), the South Pacific Forum (SPF) and the Association of South East Asian Nations (ASEAN).