APEC 2010 Japan: Agenda

"Japan has managed to create a new administration through change of government," proclaimed a newly-elected Prime Minister Yukio Hatoyama at the end of 2009. In the lead-up to APEC Leaders' Week in Singapore, he told audiences to expect change in 2010 - not just for Japan but for APEC:

"How can APEC manage to change itself? I believe that [between 2009 - 2011] APEC will address this question? As the growth centre of the world, APEC has the responsibility of identifying a new economic order."ⁱ

Indeed, as host of APEC in 2010, Japan has asserted a theme of "change and action" and the idea that this year will serve as a catalyst is recurrent in discourse.

At a recent visit to the Japan Society in New Yorkⁱⁱ, Hidehiko Nishiyama, Director-General for Trade Policy at Japan's Ministry of Economy, Trade and Industry and co-Chair of the APEC Senior Officials' Meeting in 2010, explained that challenges could be used as a way to make improvements and to operate more effectively. He was emphatic that progress in achieving APEC goalsⁱⁱⁱ would be "evaluated and the future of the Asia-Pacific region seriously discussed."

As senior APEC officials prepare to meet for the first meeting of 2010, Japan has asserted three pillars that will lend new direction and upon which actions should be based: promoting regional economic integration, devising a new growth strategy and enhancing human security.

Promoting regional economic integration

Apart from addressing the most obvious challenges - the threat of protectionism, lack of trust in financial institutions - 2010 is also the deadline for industrialised economies to achieve the Bogor Goals. The outcome, says Mr. Nishiyama, could help to identify the path toward a free trade area of the APEC region.

Already, he says, work toward a region-wide free trade area is "speeding along."^iv A number of studies have been conducted to examine possibilities, from expanding the regional trade agreements already in place to accelerating trade liberalisation in specific sectors like environmental goods and services and the services sector in general. These studies are critical to any fruitful discussion and, ideally, will reveal which pathways are most feasible.

At a more immediate level, APEC is determined to improve scores on the World Bank's Ease of Doing Business Index. With several APEC economies already in the top five and even more in the top twenty, the index is a good indicator of actual experiences. Although APEC economies continue to forge trade agreements among themselves, the region should be the easiest place to conduct trade not just on paper but also in real-life.

Devising a new growth strategy

In fact, the recent financial crisis brought loudly to attention the fact that real life experiences are widely variant and very often at odds with stated principles.

In his address last year, Prime Minister Hatoyama drew attention to growing disparities among rural and urban populations with regard to levels of education, medical care and social inclusion:

"We have to shift our interest from concrete buildings to human beings' lives," he said. "We want to change Japan into a place where people can find their places in society... We would like to engage in policy that attaches importance to people."

To APEC economies, globalisation - a phenomenon frequently cited as the root of economic disparity - is a critical element in the new economic order. Trade and investment are exactly what is needed to restore confidence, enable innovation, generate wealth and ensure equity.

"Today, everyone marvels at the breadth, depth and speed of globalisation. At the same time, everyone is amazed by the change and new challenges that come along with it," notes Mr. Nishiyama. It is absurd to think that in such rapidly changing times, the concept of globalisation should not evolve.

Economies must observe the effects of their approaches and adapt policies to improve the outcome. As an example, Nishiyama points out that fluctuation in the cost of commodities affects low-income households more acutely than it does high-income households and, on a macro-level, disrupts incentives for the development of new and alternative resources that could, in the long term, be of benefit to everyone. The solution is not to dismiss globalisation altogether but to find ways to maximise the benefits.

So visible was the need for decided action that in last year's Declaration, APEC Leaders determined to "pursue growth which is balanced, inclusive and sustainable, supported by innovation and a knowledge-based economy to ensure durable recovery that will create jobs and benefit our people."

A playground of creativity, Japan is an archetype for knowledge-based initiatives designed to accelerate growth and strengthen industry. This year's APEC agenda includes cooperation on patent licensing and standards conformance, greater professional mobility and more efficient use of internet and communications technology.

Enhancing human security

Economic confidence-building is inextricable from the most elementary forms of confidence. In recent years, diseases such as the H1N1 virus and avian flu have virtually halted travel to specific areas and caused human suffering. Similarly, even unfounded threats or the mere possibility of contamination can have adverse effects that reverberate throughout society at all levels.

Quite simply, says Nishiyama, "human security is important to create an environment to allow people to engage in business activities without anxiety in this region." To this end, a very important pillar of APEC in Japan will be counter-terrorism measures, food security and the counteraction of infectious diseases.

Regional architecture

The APEC region represents 40 percent of the world's population and accounts for 56 percent of the world's GDP. Including both developed and developing economies, APEC is a natural complement to international bodies such as the G20 and its influence extends far beyond the Pacific.

Prime Minister Hatoyama has asserted his belief that "APEC should put a regional economic cooperation firmly into place, [should] advocate that on the world stage at the G20 - and lead the world."

Mr. Nishiyama has told audiences that the Prime Minister expressed to the United Nations Japan's will to "reduce the region's security risks and share each other's economic dynamism based on the principle of open regionalism." This, he said would build on and extend cooperation on free trade agreements, finance, currency, energy, environment and disaster relief, among other things.

To view Prime Minister Hatoyama's speech to audiences at the APEC 2009 CEO Summit, go to: http://www.apec.org/apec/news___media/webcast/151109_ceo_hatoyama.html