Speech Notes

Mid-Term Stocktake

Speech to APEC Ministerial Meeting Plenary, Busan, Korea,

15 November 2005

The Bogor Goals adopted by APEC leaders in Indonesia in 1994 set out ambitious targets for the fledgling regional organisation - "free and open trade and investment by 2010 for industrialised economies, by 2020 for developing economies".

This year we have before us a formal stocktake, asked for by leaders in 2001, of firstly what progress we have made towards realising those goals. And secondly, leaders asked for advice on APEC's future trade and economic priorities in light of changes in the global and regional trading environment.

On the first question, the Mid-Term Stocktake Report answers that all APEC economies have made significant progress towards the Bogor Goals.

- APEC's average applied tariffs have reduced significantly from 16.9 per cent in 1989 to 5.5 per cent in 2004. In this respect APEC has outperformed the rest of the world.

- In opening up their countries for trade and investment APEC economies have also spectacularly outperformed other economies in growth.

o Between 1989 and 2003, APEC economies achieved 46 per cent real GPD growth, non-APEC economies 36 per cent.

o APEC achieved 28 per cent per capita GDP growth, against 8 per cent for non-APEC economies over the same period.

That is reflected in strong social outcomes for APEC.

- Most importantly, APEC has proven flexible in adapting to an evolving international trade agenda. In 1994, the focus was principally on removing tariffs and non-tariff barriers. Now we are looking more intensively at trade facilitation issues such as customs facilitation, standards, e-commerce and business mobility.

The Bogor Goals have imposed some discipline on the direction and pace of policy development and we should reaffirm our commitment to achieving them for that reason. The job, however, is not yet complete and must be completed.

The second question is about APEC's future trade and economic priorities. While acknowledging different levels of ambition amongst our membership, this report articulates a relevant and credible future agenda.

On the World Trade Organisation/Doha Development Agenda, it is important that APEC is a lobby group maintaining pressure for a positive completion of the Doha Round. It should also continue to make specific strategic interventions on aspects of the negotiation where there is deadlock.

There was no consensus on dealing with sensitive sectors, but as these are embraced within the Bogor Goals, it lacks credibility for us not to address these issues.

On the Free Trade Agreements (FTAs) and Regional Trade Agreements, work has started on best practice guidelines. We have a small window of opportunity, perhaps two-three years to promote best practice model FTA chapters if we are to secure some coherence between FTAs in the region. The spaghetti bowl of rules in multiple FTAs that will confront business will otherwise stand in the way of achieving the vision of the Bogor Goals.

We welcome the Busan Business Agenda. APEC must embrace the newer trade issues of trade facilitation, intellectual property protection, investment liberalisation, anti-corruption, transparency, structural reform, and secure trade. We simply have to do more to address behind-the-border obstacles to growth to make it easier for business to operate. Behind-the-border constraints are now often bigger and more costly barriers to exporters than tariffs.

Thirdly, I note that the Mid-Term Stocktake and indeed APEC itself has made no response to the APEC Business Advisory Council's promotion of an Asia-Pacific FTA. It may be an idea ahead of its time, but it would be a shame not to explore the vision for the future which it may hold.

The APEC story is a good one. We should celebrate according to the old analogy, that it is a glass three quarters full rather than a quarter empty. But we need to continue until the glass is full and through further reforms ensure APEC remains relevant and credible.

ENDS

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