1999 Meeting of APEC Ministers Responsible for Trade

APEC Ministers Responsible for Trade met in Auckland on 29-30 June to progress APEC's work programme in accordance with instructions given by Leaders in Kuala Lumpur.

Ministers met in an environment of shared confidence that the region was in the process of recovering from the economic crisis which has beset it over the past two years, but were aware that continuing challenges remain. They recognised that the commitment of APEC economies to the maintenance of open markets and individual reforms in the face of the crisis had played a significant role in moderating the impact of the crisis and in hastening recovery. Ministers emphasised that open, transparent and well governed markets are key to a return to sustainable economic growth in the region and to the prosperity of its peoples. At the same time Ministers acknowledged the significant economic and social impact of the crisis around the region, and drew attention to the extensive array of work APEC has underway to help address these issues.

Against this background, Ministers focussed their discussion around the three themes that New Zealand as Chair has established for APEC 99: expanding opportunities for doing business throughout the region, strengthening markets and broadening support for APEC.
Theme 1: Expanding opportunities for doing business throughout the region

This area of work recognises that business has the task of generating growth, employment and prosperity in our economies and that keeping markets open - and opening them further - is vital to the development of sustainable business opportunities. The work aims to make business easier throughout the region, particularly for small and medium enterprises, through the elimination of red tape.
Individual and Collective Action Plans

Actions taken individually by economies are the principal means of achieving APEC's goal of free and open trade and investment by 2010/2020. Ministers welcomed the indication by economies of substantial improvements in preliminary Individual Action Plans this year. Fourteen have implemented tariff reductions, fourteen have liberalised their investment regimes, and seventeen notified measures in the area of competition policy and/or deregulation. Nonetheless Ministers, reflecting business concerns, agreed to further improve the credibility of their Individual Action Plans. The Plans needed to be more comprehensive, more transparent, and more user-friendly. They agreed to seek the advice of their business communities, and to submit improved Plans by the August deadline.

Ministers emphasised the importance they attached to the review of the Individual Action Plan process this year, in order to take stock of the progress made to date and the challenges which remain in achieving the Bogor Goals. They welcomed PECC's contribution to the review process. Ministers directed officials to report in September with recommendations on ways to improve the process. They welcomed the offers by Thailand and Peru to volunteer for peer review.

Ministers were pleased with progress to date on Collective Action Plans, including in the areas of customs procedures, mutual recognition of standards and conformity assessment procedures, mobility of business persons, government procurement, and professional services. Such measures are critical to boosting trade and investment flows through lowering the transaction costs of business. Ministers agreed that APEC needed to work better at communicating the value of this work to business and to receive feedback from business on their priorities. Ministers instructed officials to develop a package of concrete measures in September.

Given the evolution of circumstances since 1995, Ministers instructed officials to review the Collective Action Plan component of the Osaka Action Agenda including the need to broaden, deepen or modify this component of the Agenda, and instructed officials to report on this issue in September.
APEC Food System

Ministers welcomed the progress being made by the Task Force studying the APEC Business Advisory Council (ABAC) proposal for an APEC Food System. Ministers agreed the proposal offers a useful approach to food issues by focussing on the development of rural infrastructure, dissemination of technological advances in food production and processing, and promotion of trade in food products. Ministers emphasised the importance of addressing these three areas in a balanced way. They looked forward to receiving a final report and recommendations, for their consideration in September, on what APEC needs to do to respond effectively to the proposal. Ministers were also informed of ABAC's ongoing work on the APEC Food System.
APEC/World Trade Organisation

APEC is committed to open regionalism and supports the multilateral trading system. Ministers noted the mutually reinforcing role of the goals of both APEC and WTO. Ministers recognised the importance of this area of APEC's work to the region's business community, particularly as a response to protectionist pressures in the region.

Ministers agreed on the importance of ensuring full implementation of existing WTO agreements. Ministers encouraged acceleration of outstanding accession negotiations in accordance with WTO rules and based on commercially viable market access commitments with a view to achieving a universality of WTO membership.

Ministers recalled the particular importance which Leaders in Kuala Lumpur attached to early progress being made on broad-based multilateral negotiations in the WTO, achieving an overall balance of interests of all members. Ministers expressed satisfaction with the preparations in the WTO of the agenda for the Third WTO Ministerial Meeting in Seattle. They noted that a number of proposals have been tabled and agreed that APEC economies should take the lead in ensuring that all proposals are put on the table, desirably by the end of July. They agreed on the need for an intensification of activity in Geneva in the final phase of preparations for the Seattle Ministerial and endorsed calls for work to begin on drafting the Seattle Ministerial declaration during August. They agreed that the Seattle Ministerial Declaration should contain agreement on both the subject matter for negotiations and on the modalities for progressing negotiations. They also agreed that further consideration should be given to the possibility of specific decisions to support the launch at Seattle of such broad-based negotiations.

Ministers agreed that the negotiation agenda should be broader than that already specified in the built-in agenda principally on agriculture and services, and that these areas and negotiations on industrial (non-agricultural) tariffs should serve as an integral part of the forthcoming negotiations. Ministers agreed that the negotiations should be concluded within three years.

Ministers further agreed on the need to ensure that the concerns of developing economies, including the least developed economies, are addressed in any new WTO negotiations. They noted that this was something to which APEC, with its broad membership and unique approach to trade and investment liberalisation, is well placed to contribute. Ministers instructed officials to consider the concerns of developing economies and least developed economies together with other possible issues for inclusion on the agenda for the Seattle WTO Ministerial Meeting including transparency in government procurement, electronic commerce, and trade facilitation and to report to Ministers at their September meeting.

Pursuant to their agreement in Kuala Lumpur on the front nine EVSL sectors, Ministers of participating economies emphasised the importance of the Accelerated Tariff Liberalisation (ATL) initiative in providing impetus to the wider negotiation on industrial (non-agricultural) tariffs which they agreed should be launched at Seattle. They welcomed progress in the initiative since November, including the support it had received from a number of non-APEC WTO members and instructed officials to continue to promote the initiative, endeavouring to conclude agreement in the WTO in 1999. They also agreed that participating economies should engage again with WTO members in July on their reaction to the initiative and on how it will tie into the launch, conduct, and outcome of any new WTO negotiations.

Ministers of participating economies noted the growing support for new WTO negotiations on industrial tariffs, and agreed that the atmosphere in the WTO was now positive for the negotiation in the WTO of the tariff elements of the remaining six EVSL sectors (Early Voluntary Sectoral Liberalisation) sectors - automotive (no tariff element), civil aircraft, fertilisers, food, oilseeds, and rubber. In this regard, they recalled the instructions received from Leaders in Vancouver to pursue an ongoing programme of voluntary liberalisation, and their intention that APEC continue to act as a catalyst for promoting trade and investment liberalisation globally, and in Kuala Lumpur to further advance work on the remaining six EVSL sectors.

Ministers of participating economies therefore resolved that the tariff elements of the remaining six EVSL sectors should be negotiated in the WTO during the course of the negotiations on agriculture already mandated in the WTO under the BIA, and the negotiations on industrial (non-agricultural) tariffs which they agree should be launched at the Third WTO Ministerial meeting. They took note of the efforts made by participating APEC economies to develop a framework for the reduction or elimination of tariffs in these sectors within an expedited timeframe, in accordance with the principle of flexibility, and called upon the WTO to take these efforts into account in the upcoming WTO negotiations.

APEC's EVSL initiative has always been about more than tariff liberalisation. Ministers welcomed progress made on implementing the non-tariff measure, facilitation and Ecotech elements agreed at Kuala Lumpur and the further initiatives developed since then, a list of which is attached. Ministers emphasised the need to continue implementation of all three elements and requested that officials report in September on further deliverables in this area.
Theme 2: Strengthening the Functioning of Markets

The pace of globalisation and the scope and depth of the economic crisis have underscored the need for broader policy responses to support sustainable long term economic growth and prosperity in the region. Trade liberalisation on its own is not enough. Efficient, innovative and competitive businesses require efficient, flexible and competitive markets. Ministers agreed on the need to improve the openness and efficiency of domestic markets in the region. This requires strengthened competition frameworks to support wider structural and regulatory reform, improved economic governance (public and corporate) arrangements, and accelerated efforts to reduce business costs in all markets.

Ministers agreed to intensify work in these areas and welcomed the strengthening markets approach this year to underpin recovery in the real economy. They noted that the sound operation of markets would improve the welfare of citizens by giving them better choice and better quality at lower costs. Strengthening markets provides a means of linking and reinforcing APEC's efforts on trade and investment, regulatory reform, and capacity building. Ministers highlighted the importance that business, SME Ministers and Women Leaders attached to reducing compliance costs on small business, improving the capacity of financial markets to meet the needs of small business, and building management capability. Ministers agreed to intensify work under the Collective Action Plans and Ecotech programmes on these issues.

Ministers recognised the importance of developing a framework for advancing work on the strengthening markets approach. They supported the work underway to develop non-binding principles on competition and regulatory reform and instructed officials to complete recommendations by September. They appreciated PECC's contribution. Ministers welcomed initiatives undertaken by the Finance Ministers on international financial issues and on strengthening financial markets. They welcomed Japan's initiative to strengthen market infrastructure. Ministers also recognised the critical importance of building relevant institutional capacity and human skills, and agreed to develop further specific proposals in this area by September.
Economic and Technical Cooperation

Ministers welcomed work underway to improve the effectiveness of APEC's Economic and Technical Cooperation (Ecotech) agenda through strengthening coordination and intensifying work on priority areas. They expected this work would be reflected in the 1999 report on Ecotech activities and instructed officials to report in September on concrete outcomes achieved including the following specific initiatives:

The Electronic Commerce Steering Group updated Ministers on progress in implementing the APEC Blueprint for Action on Electronic Commerce adopted by Ministers in November 1998. Key areas for action are:

Ministers emphasised that it was a matter of utmost urgency to ensure regional economies were as prepared as possible to manage the Y2K problem. When Leaders met in September, little more than 100 days before the new millennium, they would want to be confident that everything possible was being done. Ministers focussed in particular on the need for effective contingency planning and cross-border cooperation among economies to reduce risks from potential disruptions. They welcomed the activities underway in APEC, and directed officials to prepare a full and substantive report in September on actions underway.

Ministers therefore instructed officials to accelerate work on cross-sector and cross-economy dependencies including testing, information dissemination and improving systems to bolster regional contingency plans and continuity of operations. Specifically, Ministers urged economies to respond urgently to the questionnaire circulated by Canada, Japan and Singapore and the request for contact information from each economy on the key sectors, in order to develop a Y2K readiness and network of contact points. They agreed that the website being developed by Canada and the US was a useful means of exchanging information and develop contingency planning, and welcomed the US proposal for a Y2K risk assessment toolkit for cross-border issues, which would be posted on the this website.
Theme 3: Broadening Support

Ministers agreed that the understanding and engagement of communities was increasingly critical to APEC's credibility and its capacity to deliver on its goals. Drawing on the outcome of the seminar 'Bridging the Gap: Explaining Trade and Investment Liberalisation' held in Auckland on 28 June, Ministers noted that perceptions about liberalisation are often distorted because the substantial benefits of liberalisation are widely dispersed whereas the adjustment costs are localised and more visible. Ministers endorsed the emphasis of the seminar on the importance of developing innovative tools for communicating effectively with communities; the need to eliminate jargon; to focus on things that are directly relevant to people's experience; and to improve transparency. They agreed that the Seattle WTO Ministerial Meeting would be a key opportunity for conveying a strong message on trade and investment liberalisation.

Ministers reiterated the critical importance of direct dialogue with business. ABAC urged Ministers to take work forward in five main areas: continued trade and investment liberalisation, strengthening Individual Action Plans, the APEC Food System, capacity-building, Y2K and aviation liberalisation. Ministers took note of all the comments. In particular they noted the strong links between tourism and air services liberalisation, and agreed that the Chair should write to APEC Transport Ministers urging them to implement the four priority recommendations for air services liberalisation that have been developed by the Transportation Working Group in the areas of doing business matters, air freight, multiple airline designation, and airlines cooperation arrangements. Ministers instructed officials to report to Ministers on APEC's response to ABAC's recommendations in September.

A Trade Roundtable with business representatives from around the region was held for the first time as part of the Ministerial meeting. Ministers welcomed the conclusions of the Roundtable and directed officials to examine the conclusions to make sure that they inform our work. The conclusions of the Trade Roundtable are attached. Ministers were also briefed on the outcomes of the Business Symposium held in Auckland 24-26 June. The symposium identified the critical importance of macro-economic adjustment, structural reform and transparent regulatory regimes to support open, market-based economies.

Ministers agreed that women in APEC are an enormous untapped potential for improving economic and social well-being and recognised the unique contribution of indigenous businesswomen in APEC. They welcomed the recommendations from the Women Leaders' Network meeting held in Wellington 21-23 June, and the Indigenous Women in Business Seminar held on 18-20 June. Recognising the differential impact of trade on men and women, Ministers agreed that particular attention needs to be paid to women's access to finance, information, technology and their full participation in APEC. Ministers reinforced the importance of the Framework for the Integration of Women in APEC as requested by Leaders. They looked forward to finalising the Framework by September for forwarding to Leaders.

Ministers also welcomed reports from representatives of the Pacific Economic Cooperation Council (PECC), the South Pacific Forum and the Association of South East Asian Nations (ASEAN).