APEC Third Senior Officials' Meeting (SOM III)

APEC THIRD SENIOR OFFICIALS' MEETING (SOM III)

ROTORUA 11-13 AUGUST 1999

MEDIA BACKGROUNDER

This note outlines the main issues likely to be discussed at the third APEC Senior Officials' Meeting for 1999 (SOM III) in Rotorua 11-13 August.

The Senior Officials' Meeting (SOM) provides overall coordination and direction to the APEC officials' process. SOM III will be the most important officials' meeting of APEC 99. It provides the last formal opportunity to gain agreement at officials' level on the package of outcomes that will be put to Ministers and Leaders when they meet in Auckland on 9-10 and 12-13 September respectively. (Senior Officials will meet again informally on 7-8 September in Auckland but will have only limited time and opportunity at that point to add to decisions already taken).

SOM III will bring together the work carried out in APEC this year, including at the Ministerial meetings on Human Resource Development (held in Washington DC 29-30 July), on Trade (held in Auckland 29-30 June), on Small and Medium Enterprises (held in Christchurch on 27-28 April) as well as at SOM I (Wellington 8-9 February), and SOM II (Christchurch 5-7 May). Senior Officials will seek to finalise the work programme for 1999 in response to the instructions of Leaders and Ministers in Kuala Lumpur in November 1998, and to recommend some directions for work in 2000 and beyond. (Finance officials will be meeting separately in Wellington on 26-27 August). The first day of SOM III will consist of an all-day "Retreat" for Senior Officials. This format allows for a more informal exchange among Senior Officials.

The following are the main issues likely to be considered by SOM III in Rotorua.

· Individual Action Plans: APEC economies use these plans to record their progress towards the goals of free trade and investment in the region by 2010/2020 agreed at Bogor, Indonesia in 1994. SOM will look at reviews of progress made to date with IAPs that have been conducted by PECC (Pacific Economic Cooperation Council) and by economies themselves. Four economies: Japan, the United States, the Philippines and Brunei Darussalam, will submit their 1998 IAPs for voluntary peer review by other APEC economies in Rotorua on 7-8 August.
· Strengthening the Multilateral Trading System APEC's role in resisting protectionism and continuing to push for continued liberalisation of trade and investment in the region as essential to recovery from the crisis and return to sustained economic growth will be a focus of discussion. A new set of multilateral trade negotiations is due to start late this year following a WTO Ministerial meeting in Seattle in November/December. Officials will discuss how APEC Ministers and Leaders in September might influence those negotiations. Those discussions will build on the outcome of the Auckland meeting of Trade Ministers which agreed to support the inclusion of industrial tariffs in the WTO negotiations. Officials will get an update on discussions underway in the WTO on the Accelerated Tariff Liberalisation (ATL) initiative involving eight sectors targetted for early tariff liberalisation.
· Trade Facilitation: Trade facilitation means making it easier for businesses to trade across borders and lowering their "red tape" costs. Initiatives underway include business-critical areas like mutual recognition agreements, customs harmonisation, standards and conformance, business mobility and recognition of qualifications. SOM III will look at what outcomes may be deliverable in this area by September.
· APEC Food System: SOM III will consider the final report of a Task Force, co-chaired by New Zealand and Chinese Taipei, which has been studying the APEC Food System proposal put forward by the APEC Business Advisory Council (ABAC). The proposal suggests an integrated approach to food including rural infrastructure development, technology transfer and promotion of trade.
· Early Voluntary Sectoral Liberalisation (EVSL): This initiative, born at the Leaders' Meeting in Vancouver in 1997, identified 15 sectors for removing tariff and non-tariff barriers ahead of the Bogor time frame. APEC Ministers have agreed to transfer the tariff elements of all the sectors to the World Trade Organisation for negotiation. Discussion has been underway in Geneva for some time on the first eight sectors, now known as Accelerated Tariff Liberalisation (ATL). SOM III will hear an update on progress with the ATL, and discuss progress on the non-tariff elements of EVSL (facilitation, and economic and technical cooperation measures).
· Strengthening Markets: This theme has been accepted by APEC members as a major focus for its work this year. It recognises the need to address areas of structural and regulatory weakness that were exposed by the economic crisis, and the need for improved policy frameworks and human and institutional capacity to improve the functioning of markets - including financial markets - throughout the region.
· Competition and regulatory reform: A major New Zealand initiative under the strengthening markets theme is a draft set of principles aimed at establishing a coherent policy framework that encourages competition and good governance. It is hoped that SOM III will put forward the principles for agreement by Ministers.
· E-commerce/Y2K: APEC's Blueprint for Action on electronic commerce set a target of paperless trading in the region by 2005 for developed economies and 2010 for developed economies. The US will report to SOM III on behalf of a Steering Group taking forward work in this area. SOM III will also review the efforts underway within APEC to ensure Y2K issues are managed as smoothly as possible at the end of this year.
· Economic and Technical Cooperation: Discussion will focus on improving the effectiveness and coordination of Ecotech programmes. One specific proposal on the table from New Zealand aims to establish a 'clearing house' which can identify gaps between the infrastructure and technical assistance needs of some APEC economies and the capacity of other members to meet those needs.
· Social Impact of the Economic Crisis: SOM III will look at how APEC is responding to the initiative of Secretary of State Albright in Kuala Lumpur in November to work on the social impact of the crisis. Priority areas include health, human resources development, food and jobs/employment creation.
· Integration of Women in APEC: New Zealand also chairs a Task Force set up to establish a framework for the integration of women in APEC. The Task Force will provide its final report to SOM III, including a draft framework which will be recommended for endorsement by Ministers in September.
· Management Review: SOM III will finalise recommendations to Ministers on a number of means of focussing and streamlining APEC's management and structure. Suggestions include reducing the number of bodies, making more use of 'virtual' meetings and improving the coordination between the Finance Ministers and other APEC processes.

Ministry of Foreign Affairs and Trade
August 1999

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