Address to 17th General Meeting of the Pacific Economic Cooperation Council Sydney
APEC 2007 - The Challenges and Opportunities
I have been asked this morning to talk to you about APEC 2007 -
the challenges and opportunities. Actually, I can sum it up in two sentences.
The challenge is to reinvigorate APEC as the pre-eminent
forum for economic cooperation in the region and to set it on a new
The opportunity arises from the fact that the annual host
of APEC has considerable flexibility to determine the agenda,
manage the meetings, and influence the outcomes.
But before elaborating, let me, on behalf of the Australian
government, welcome all our overseas participants to this PECC
PECC has played a significant role in promoting economic
cooperation in the Asia-Pacific region. Along with the APEC Business Advisory Council, PECC is the only
non-government official observer of APEC. PECC had a major role in the creation of APEC and you have been
at the forefront of working with APEC to promote cooperation and
Australia is, of course, delighted to be hosting this year both
APEC and your 17th Annual Meeting.
When you had your inaugural meeting in Canberra in 1980, there
were 11 economies in attendance. Nine years later, when APEC had its
first meeting in Canberra, there were only 12 participating
We in APEC were unsure in 1989 as to what lay ahead. Some of us
had lofty visions of a Pacific OECD. Others were sceptical of
setting up a new regional institution.
APEC has travelled a good distance in 17 years. We now have 21
members, annual meetings of heads of government, annual meetings of
key economic Ministers, a private-sector Advisory Council, an
agenda that covers a wide spectrum of economic affairs, a dedicated
Secretariat and a large number of committees, working groups and
I think we can look back with some pride at what we have
We stand out as the world's most dynamic region. We have
benefited enormously from the growth in trade and investment, from
the unprecedented changes in technology, transport and
communications and the freer flow of people and capital across
APEC has played an instrumental role in building cooperation
within the region and facilitating the underlying trend towards
greater economic integration. It has done this through sharing
policy experiences, capacity building and technical assistance,
developing best practices, drawing on international expertise,
setting targets and agreeing on joint actions.
In providing a forum for cooperation, APEC has ameliorated the
transition from the old tensions of the cold war, helped to build
new confidences among old rivals, promoted open markets in the
region, expanded its agenda to address new challenges, tackled
issues pragmatically and helped smooth the region's economic power
Since APEC was first formed, there has been a dramatic
improvement in economic prosperity. Among our population of 2.7
billion, the share of people in poverty has more than halved.
Income per person has more than doubled.
We are a disparate group of economies. Our levels of development
differ markedly. Our cultures and languages are different, as are
our systems of government and political institutions and commercial
enterprises. Our broad economic interests are similar but our
immediate priorities often differ.
We are not a rules-based organisation or a negotiating forum so
our achievements will not always be as visible, but they are
nevertheless real and substantive.
As a forum based on voluntarism, consensus and concerted
unilateralism, APEC has some sui generis behavioural norms.
APEC Members have done well in the past couple of decades, but
we face new challenges. From a changing paradigm of investment and
trade, from the environmental and climatic impact of rapid economic
development, from shifts in our demographics, from the emergence of
a new sense of regional integration in East Asia, from the illegal
movement of people, counterfeit products, drugs and weapons across
borders. And from the increased risk of pandemics.
As this year's host of APEC, Australia feels a responsibility to
do what we can to ensure that APEC can meet these challenges.
We think we have got off to a good start and we have high
expectations for September when Leaders will meet here in
Senior officials have mapped out a set of priorities based, in
large part, on instructions from APEC Leaders last year in Hanoi
and begun to prepare the ground for the meetings of Ministers and
Leaders. We have already hosted three Ministerial meetings - Mining
in Perth, SME's in Hobart and Transport in Adelaide - and have put
in train meetings of Energy Ministers in May, Trade Ministers in
July and Finance Ministers in August.
We have established a sound working rapport with the APEC
Business Advisory Council and many of us are working with our PECC
colleagues in developing the agenda.
Australia's priorities for 2007 are APEC priorities.
If I were to highlight six main objectives they would be as
First, we want to do what we can to strengthen the
multilateral trade system and to bring the Doha negotiations to a
successful conclusion. APEC Members account for nearly half of
global trade so they have a strong interest in having a reliable
rules-based multilateral system
Some of you may think that the enthusiasm with which APEC
governments have embraced bilateral free-trade agreements,
indicates that we are turning our back on the MTS. This is
incorrect. We are all firmly committed to the WTO. We believe the
work we are doing on model FTA measures will help the multilateral
We are continuing with our work on trade facilitation. We have
already made progress in reducing the government red-tape involved
in business transactions and expect to agree in a few weeks on
another raft of measures to reduce costs further by developing a
Customs single window, protecting data privacy, food standards
harmonisation and work to protect the internet from malicious
Second, we want to develop a coherent regional policy
response to one of the major challenges now facing APEC members,
namely the interrelated issue of energy security, the
environment and climate change. Prime Minister Howard has written to his counterparts
foreshadowing his intention to put this issue at the top of the
agenda for the Leaders' retreat in Sydney.
APEC economies already account for 60% of global energy demand
and include the world's four largest energy consumers. Energy
demand across APEC is projected to double by 2030.
APEC economies are now actively engaged, individually and
collectively, in a range of initiatives to respond to the
challenges of energy security and climate change.
Within APEC, there are a number of groups involved in developing
cooperative policy responses. Mining Ministers agreed in February
to look at ways of further reducing barriers to trade and
production of key mining, including energy, products. Energy
Ministers are scheduled to meet at the end of May to consider a
number of efficiency, conservation and diversification initiatives.
The recent meeting of Transport Ministers welcomed a proposal for
work on measures to reduce aviation emissions.
I expect that Trade Ministers in July and Finance Ministers in
August will also address aspects of the issues ahead of the Leaders
meeting in September.
Australia is committed to doing its part to promote clean
development. We have already committed billions of dollars to
develop low-emissions technology. We are supporting more
efficient energy use, the uptake of renewable energy and reductions
in land clearing. We were a founder and major contributor to the Asia-Pacific
Partnership on Clean Development and Climate which aims to develop
and disseminate low-emissions technologies and recently announced a
Global Initiative on Forests and Climate to reduce
The Sydney meeting represents an unprecedented opportunity for
APEC Leaders to draw the various threads together in a way which
will help shape the global agenda on these important issues in the
Third, we want to submit to Leaders a practical plan for
promoting further economic integration in the region.
Leaders asked in Hanoi last year for a report and directed that
we look at an FTAAP as a long term prospect.
Strengthening regional economic integration has been a dominant
theme of APEC's work since its inception. We believe there are a variety of ways of promoting and
facilitating further integration and will be putting forward
recommendations in September. We are actively seeking PECC and ABAC
input to this exercise.
Fourth, we want to encourage APEC members to focus as
much energy on ways of reforming domestic economic policies as we
have in the past in reducing barriers at the border.
Over the last 17 years, APEC has focussed mainly on the way in
which the liberalisation and facilitation of trade and investment
can help to promote economic growth and cooperation. These are usually more visible and easier to deal with than
other less transparent impediments to growth.
We have made considerable progress in reducing general levels of
protection. Average tariffs have been cut by around two-thirds
(16.5 per cent - 5.5 per cent) and now average only five per cent across the APEC
We want to give equal attention to work on structural reform and
behind-the-border issues, as we all know that inadequate or overly
burdensome regulatory systems, lack of transparency, measures which
inhibit domestic and foreign competition, insufficient investment
in infrastructure and poor governance have all impeded growth as
much as trade barriers.
All the empirical data suggest that over the longer term,
economies that embark on these micro-reforms achieve greater
macroeconomic stability, experience faster productivity growth and
higher living standards and are more resilient to economic
Fifth, we want to press ahead with the work on the human
We need a stable regional environment in which to encourage
growth and development. Work on counter-terrorism, secure trade,
pandemics and disaster preparedness demonstrates how APEC can
provide the forum for regional responses to trans-national
Sixth, we want to strengthen APEC's institutional
capacity to support its membership.
Over recent years APEC members have introduced a number of
measures to become more efficient and results oriented. We have
reduced the number of technical groups, improved our systems of
evaluation and coordination, provided more money for capacity building, built more effective delivery mechanisms and
strengthened the Secretariat, which is small and under-funded. However, we still have some way to go in ensuring we have the
capacity to support our activities.
Australia has proposed a term-appointed Executive Director to
replace the annual rotating ED which we have at present. This is
designed to ensure more professional leadership and representation
and greater continuity in the Secretariat's work. Frankly, we
are bewildered that one or two Members are resisting.
We have also proposed the establishment of a policy support unit
of economists to assist with our trade and behind-the-border
agenda. This would provide greater analytical support for APEC's
work and facilitate capacity building for developing member
APEC has had its share of critics over the years. Some think it
has grown too big and over-extended itself. Others think it should
be doing more. Some think that it should stick to trade and
investment whereas other suggests that we need to broaden our
dialogue. Some suggest we should set a new goal of a Free Trade
Area of the Asia-Pacific region whereas others suggest this
would be unrealistic and possibly counter-productive.
Since its inception in 1989, APEC has played an instrumental
role in building cooperation within the region.
We think that a reinvigorated APEC has the capacity to be even
more relevant in the future than it has in the past. We see a
number of major issues for 2007 - to help bring Doha to a
conclusion, to develop a platform of concerted actions to take
forward on clean development and climate change, to agree on ways
of promoting regional economic integration, including through
exploring the feasibility of an FTAAP, to reach agreement on a new
trade facilitation plan, to move forward with a new APEC agenda on
structural reform, and to strengthen the Secretariat so that it is
better equipped to support members.
We look forward to working with our colleagues in PECC and to
the outcome of your discussions over the next two days.