About APEC

Asia-Pacific Economic Cooperation (APEC) was established in 1989 in response to the growing interdependence among Asia-Pacific economies. Begun as an informal dialogue group, APEC has since become the primary regional vehicle for promoting open trade and practical economic cooperation. Its goal is to advance Asia-Pacific economic dynamism and sense of community. Despite the financial instability of 1997-98, the Asia-Pacific remains one of the fastest growing regions in the world. It is a major contributor to global prosperity and stability. Today, APEC includes all the major economies of the region and the most dynamic, fastest growing economies in the world. APEC's 21 member economies had a combined Gross Domestic Product of over US$16 trillion in 1998 and 42 percent of global trade. Brunei Darussalam is the APEC Chair for the year 2000.

The member economies represent the rich diversity of the region as well as differing levels of economic development. Despite such differences there is a growing sense of common purpose and cooperation aimed at sustained regional and world growth.

APEC has come a long way since 1989. It has built steadily on the efforts of the past and looks forward to further progress. The initial years of APEC were focused largely on exchanges of views and project-based initiatives. The concerns were simply to advance the process of Asia-Pacific Economic Cooperation and to promote a positive conclusion to the Uruguay Round of GATT negotiations. Today, APEC has evolved with the needs of its members to be a forum of greater substance and higher purpose–it aims to build the Asia-Pacific community through achieving economic growth and equitable development through trade and economic cooperation.

At Blake Island near Seattle the APEC Economic Leaders met for the first time for informal discussions in November 1993. They envisioned a community of Asia-Pacific economies based on the spirit of openness and partnership; of cooperative efforts to solve the challenges of change; of free exchange of goods, services and investment; of broadly based economic growth and higher living and educational standards; and, of sustainable growth that respects the natural environment.

In subsequent annual meetings, APEC Ministers and Leaders further refined the vision and launched mechanisms to translate it into action. In 1994 in Bogor, Indonesia the vision of an open trading system became the very ambitious goal of free and open trade and investment in the Asia-Pacific by 2010 for developed member economies and 2020 for developing ones.

In Osaka in 1995, APEC Leaders adopted the Osaka Action Agenda, which firmly established the three pillars of APEC activities: trade and investment liberalization, business facilitation and economic and technical cooperation. The Manila Action Plan for APEC (MAPA), adopted by the Economic Leaders in November 1996, compiled members' initial individual action plans to achieve the objectives outlined in Bogor. APEC Leaders also instructed that high attention be given to the following six areas of economic and technical cooperation: developing human capital; fostering safe and efficient capital markets; strengthening economic infrastructure; harnessing technologies of the future; promoting environmentally sustainable growth; and encouraging the growth of small and medium-sized enterprises.

In Vancouver in 1997 the APEC Economic Leaders recognized members' efforts to improve the commitments in their Individual Action Plans and reaffirmed their intention to update these annually. The Leaders endorsed their Ministers' agreement that action should be taken with respect to early voluntary sectoral liberalization (EVSL) in 15 sectors, with nine to be advanced throughout 1998 and implementation to begin in 1999. The Leaders welcomed the progress of APEC fora in involving business, academics and other experts, women and youth and encouraged them to continue these efforts. The Leaders endorsed the Vancouver Framework for Enhanced Public-Private Partnership for Infrastructure Development, as infrastructure is inextricably linked to the questions of financial stability that APEC addressed that year.

In Kuala Lumpur in 1998, the APEC Leaders reaffirmed their confidence in the strong economic fundamentals and prospects for recovery for the economies of the Asia-Pacific. They agreed to pursue a cooperative growth strategy to end the financial crisis. They pledged efforts to strengthen social safety nets, financial systems, trade and investment flows, the scientific and technological base, human resources development, economic infrastructure, and business and commercial links so as to provide the base and set the pace for sustained growth into the 21st century. Leaders also welcomed Ministers' decision to seek an EVSL agreement with non-APEC members at the World Trade Organisation.

The Leaders adopted the Kuala Lumpur Action Program on Skills Development with the objective of contributing towards sustainable growth and equitable development while reducing economic disparities and improving the social well-being of the people, through skills upgrading/improvement.

On 20 November 1993, APEC economic leaders, hosted by U.S. President Clinton, met for the first time at Blake Island, Seattle, Washington to hold informal discussions. Their vision was for an Asia-Pacific that harnesses the energy of its diverse economies, strengthens cooperation, and promotes prosperity, in which the spirit of openness and partnership deepens and dynamic growth continues, contributing to an expanding world economy and supporting an open international trading system. They envisioned continued reduction of trade and investment barriers so that trade expands within the region and with the world, and goods, services, capital, and investment flow freely among APEC economies. People in APEC economies would share the benefits of economic growth through higher incomes, high skilled and high paying jobs and increased mobility. Improved education and training would produce rising literacy rates, provide the skills for maintaining economic growth and encourage the sharing of ideas that contribute to the arts and sciences. Advances in telecommunications would shrink time and distance barriers in the region and link APEC economies so that goods and people move quickly and efficiently. Finally, they envisioned an Asia-Pacific in which the environment is improved as APEC economies protect the quality of air, water, and green spaces and manage energy sources and renewable resources to ensure sustainable growth and provide a more secure future

On 15 November 1994, Indonesian President Soeharto hosted the second meeting of APEC economic leaders who discussed where the economies of the region need to go in the next 25 years. In their Declaration of Common Resolve, the economic leaders agreed to achieve the goal of free and open trade and investment in the region no later than 2010 for the industrialized economies and 2020 for developing economies. The economic leaders further agreed to narrow the gap in the stages of development among Asia-Pacific economies. To this end, APEC will provide opportunities for developing economies to increase further their economic growth and level of development consistent with sustainable growth, equitable development, and member economy stability.

In Osaka on 19 November 1995, APEC economic leaders initiated the work of translating the Blake Island vision and the Bogor goals into reality. They adopted the Osaka Action Agenda, a blueprint for implementing their commitment to free and open trade and investment, business facilitation, and economic and technical cooperation. Part I of the Action Agenda deals with trade and investment liberalization and facilitation. Part II deals with economic and technical cooperation in areas such as energy and transportation, infrastructure, small and medium enterprises, and agricultural technology. A Trade and Investment Liberalization & Facilitation (TILF) Special Account was established under the APEC Central Fund for APEC projects that support implementation of the Osaka Action Agenda.

The Manila Action Plan for APEC (MAPA), adopted by economic leaders on 25 November 1996, includes the individual and collective action plans and progress reports on joint activities of all APEC economies to achieve the Bogor objectives of free and open trade and investment in the APEC region by 2010 and 2020, and joint activities among members under Part II of the Osaka Action Agenda. MAPA revolves around six themes: greater market access in goods; enhanced market access in services; an open investment regime; reduced business costs; an open and efficient infrastructure sector, and strengthened economic and technical cooperation. Current joint activities include the APEC Educational Network (EduNet), the Asia-Pacific Energy Research Center (APERC), the APEC Labor Market Information Network (LMI), and the Trade and Investment Data Database. Economic leaders further instructed that high priority be given to the following themes in economic and technical cooperation in six areas: developing human capital; fostering safe and efficient capital markets; strengthening economic infrastructure; harnessing technologies of the future; promoting environmentally sustainable growth; and encouraging the growth of small and medium enterprises.

At their 1997 meeting, the APEC Economic Leaders recognized members' efforts to improve the commitments in their Individual Action Plans and reaffirmed their intention to update these annually. The Leaders endorsed their Ministers' agreement that action should be taken with respect to early voluntary sectoral liberalization (EVSL) in 15 sectors, with nine to be advanced throughout 1998 and implementation to begin in 1999. The Blueprint for APEC Customs Modernization, which put forward a comprehensive program to harmonize and simplify customs clearances by the year 2002, provided a model of business facilitation. The Leaders also believed that full and active participation in and support of the WTO by all APEC economies is key to APEC's ability to continue to strengthen the global trading system. The Leaders welcomed the progress of APEC fora in involving business, academics and other experts, women and youth in 1997 activities, and encouraged them to continue these efforts. The Leaders applauded the initiative to involve youth throughout APEC's activities in 1997 as continued prosperity in the region will depend on APEC's ability to vest the next generation of leaders of the region with the skills and knowledge they require. Leaders also noted the benefits of electronic commerce and instructed that a work program on electronic commerce be developed, taking into account relevant activities in other international fora. The Leaders endorsed the Vancouver Framework for Enhanced Public-Private Partnership for Infrastructure Development as infrastructure is inextricably linked to the questions of financial stability that APEC is addressing.

The APEC Leaders in Kuala Lumpur in November 1998 reaffirmed their confidence in the strong economic fundamentals and prospects for recovery for the economies of the Asia-Pacific. They agreed to pursue a cooperative growth strategy to end the financial crisis. They pledged efforts to strengthen social safety nets, financial systems, trade and investment flows, the scientific and technological base, human resources development, economic infrastructure, and business and commercial links so as to provide the base and set the pace for sustained growth into the 21st century. Leaders also welcomed Ministers' decision to seek an EVSL agreement with non-APEC members at the World Trade Organisation.

The Leaders adopted the Kuala Lumpur Action Program on Skills Development with the objective to contribute towards sustainable growth and equitable development while reducing economic disparities and improving the social well-being of the people, through skills upgrading/improvement. The action program seeks to encourage greater participation of the private/business sectors in skills development in APEC through public-business "smart partnership".

At their meeting in September 1999 in Auckland, APEC Leaders agreed that the performance and prospects of the APEC economies had improved, but they were not complacent about the risks to recovery. Accordingly they pledged to strengthen markets and improve the international framework governing trade and investment flows. Leaders also put people and their prosperity at the forefront of their discussions, welcoming the more active participation of women and business in APEC's work during 1999.

In addition to reaffirming their commitment to the Bogor Goals of free and open trade and investment by 2010/2020, Leaders endorsed new APEC Principles to Enhance Competition and Regulatory Reform; further work on an APEC Food System; and agreed that priority would be given to trade facilitation in 2000.

Leaders endorsed the Finance Ministers' work to strengthen domestic financial markets and the return of capital to the region. In addition they agreed that Finance Ministers should work, in collaboration with other relevant organisations to develop a set of banking standards for consideration and possible adoption by APEC economies.

Looking ahead to the Seattle WTO Ministerial, Leaders committed to the launch of a new Round of multilateral trade negotiations including comprehensive negotiations on industrial tariffs, in addition to services and agriculture; improved market access; completion within three years as a single package; and the abolition of agricultural export subsidies and unjustifiable export prohibitions and restrictions.

The emerging signs of economic recovery in the region present APEC with a greater prospect of working towards preserving and strengthening market opening in the region as well as sustaining economic recovery. For APEC 2000, Brunei Darussalam will map the direction with the objective of delivering on the various agreements to the people and the community APEC aims to serve. The priorities are:

1.Continued efforts to advance APEC's agenda on trade and investment liberalization and facilitation.

2.A focus on the development of human resources with a particular emphasis on capacity-building.

3.A focus on the development of small and medium enterprises (SMEs), continuing to take into account valuable input from the business community and looking into ways of enhancing APEC's relevance to businesses.

4.With the increasing emergence of knowledge-based economies, a strengthening of work in the areas of information and communication technology, including growing problems of "digital divide" in electronic commerce and information technology infrastructure.

As Chair, Brunei Darussalam will continue to consult with member economies to consolidate the APEC agenda next year to ensure that the deliverables be more meaningful and beneficial to all.

Leaders in Auckland also reviewed the broad-based though still fragile economic recovery enjoyed by the APEC region over the past year. They agreed that the cooperative strategy adopted at the 1998 APEC meeting in Kuala Lumpur and sound macroeconomic policies in key economies have contributed to a restoration of confidence and growth. The Leaders agreed to pursue a range of steps to strengthen markets including to:

1.Provide greater transparency and predictability in corporate and public sector governance;

2.Enhance the role of competition to improve efficiency and broaden participation by enterprises;

3.Improve the quality of regulation and the capacity of regulators to design and implement policies for sustainable growth;

4.Reduce compliance costs and facilitate business growth;

5.Build a favorable regional and international environment for free and fair competition.

APEC has played a key role in catalyzing efforts by industrialized and emerging market economies in the Group of 22 to strengthen the global financial system. Leaders in Auckland were encouraged by the progress made in strengthening the international financial architecture, calling for continued cooperation in further strengthening the international financial system. They also supported the on-going efforts in the region in crisis prevention and crisis resolution and urged prompt action to improve the transparency of highly-leveraged financial institutions.

Many of these efforts are the fruit of the APEC Finance Ministers process which supports a variety of collaborative initiatives to promote development of regional financial and capital markets and to support freer and stable capital flows in the Asia-Pacific region. One project led to the establishment of the Asia Recovery Information Centre for economic recovery information and analysis exchange. Other activities included holding a joint APEC-OECD workshop on insolvency law, establishing a web site for information sharing among member economies, holding a forum on pension reform, launching a privatization forum initiative, increasing interaction among APEC bank supervisors and working more closely with the private sector through organizations such as the APEC Financiers' Group, the APEC Business Advisory Council, and the Pacific Economic Cooperation Council.

APEC Leaders already provided an important boost that helped bring the Uruguay Trade Round to a close in the early 1990's. Continuing in this tradition, Leaders in Auckland strongly supported the launch of a new trade round at the upcoming World Trade Organization talks in Seattle in November-December. They agreed that the new Round should:

1.Include comprehensive market access negotiations covering industrial tariffs in addition to the already mandated negotiations on services and agriculture.

2.Lead to timely and effective improvements in market access to the benefit of all participating economies, particularly developing economies and, consistent with this objective, provide scope to review and strengthen rules and disciplines.

3.Have a balanced and sufficiently broad-based agenda and be concluded with three years as a single package that does not preclude the possibility of early results on a provisional basis.

The Leaders also supported the abolition of export subsidies and unjustifiable export prohibitions and restrictions and, in addition, called on all WTO members not to impose new or more restrictive trade measures for the duration of the negotiations.

Turning to development, the Leaders directed their Ministers to focus in the coming year on improving APEC economic and technical cooperation and capacity-building efforts. In the area of food, the Leaders directed their Ministers to implement the recommendations of the APEC Food System, which aims at developing rural infrastructure, disseminating technological advances in food production and processing, and promoting trade in food products.

In the area of human resources development (HRD), the Leaders welcomed the outcome of the meeting of HRD Ministers in Washington, DC in July 1999. During their meeting, the Ministers adopted an action plan for responding to the needs of people affected by the crisis. The plan includes policies and programs to improve labor markets and social safety nets as well as those aimed at enhancing productivity through better workplace practices.

The three-year management review aimed at achieving the increased efficiency and effectiveness of the APEC process continues. Further to the achievements in 1998, some additional measures were endorsed and taken by both the Senior Officials and the Ministers in 1999. The major measures are:

1.The Chair of annual Leaders/Ministerial meetings will also chair the APEC Finance Ministers process starting from 2000 to make them mutually supportive and reinforcing;

2.All APEC fora are requested to prepare annual operational plans to ensure that their activities are contributing to the achievement of the goals of APEC;

3.All APEC fora are requested to implement the measures designed to strengthen the processes of project design; preparation of funding proposals; and project approval, implementation and evaluation.

During the final year of the process, a common set of criteria for the establishment of new APEC fora will be prepared. It will form an important part of the concluding report of the process at the end of 2000.

Business has always been the primary force behind dynamic growth in the Asia-Pacific region. The continuing globalization of business means that the APEC economies must develop region-wide practices and policies to encourage the free flow of goods, services, investment and capital within the region. APEC aims to achieve concrete and pragmatic results that will benefit business, contribute to increased income and create jobs in the region.

Key features that set APEC apart from other international organizations are therefore its commitment to facilitating business and regularly bringing the business/private sector into a wide range of APEC activities. Business expertise and resources can help APEC achieve its objectives, and business is a key constituency for APEC both regionally and in individual member economies. Business already participates in many of APEC's working groups and helps shape the policy dialogue in partnership with member economy officials. APEC Economic Leaders receive advice from the APEC Business Advisory Council (ABAC) established in late 1995. Such involvement is important to ensure that APEC's work is relevant to real problems and proposes practical solutions. Nevertheless, a major APEC goal is to continue to expand the essential role of business in the APEC process.