Asia Pacific Economic Cooperation (APEC), and the 2007 Meetings in Sydney, Australia
Asia Pacific Economic Cooperation (APEC) and
the 2007 Meetings in Sydney, Australia
Updated September 21, 2007
Michael F. Martin
Analyst in Asian Political Economy
Foreign Affairs, Defense, and Trade Division
Asia Pacific Economic Cooperation (APEC)
and the 2007 Meetings in Sydney, Australia
Summary
There is apparent agreement between Congress and the Bush Administration
that the Asia Pacific Economic Cooperation (APEC) is a potential vehicle for
advancing U.S. economic, trade, diplomatic, and security interests both globally and
regionally. In particular, APEC offers the United States an organizational
counterpoint to other proposed regional associations in Asia. However, the
organization’s approach and perspective on these issues may pose problems for the
United States. By design, APEC operates on the basis of consensus, under which its
members voluntarily liberalize their economic and trade policies. As a result, APEC
lacks enforcement mechanisms commonly seen in other multilateral organizations.
The main topics of discussion during the September 2007 two-day Leaders’
Meeting and the two-day Ministerial Meeting were climate change and regional
economic integration. The Leaders issued a separate joint declaration on climate
change, which included “aspirational” commitments to reduce energy intensity by at
least 25% by 2030 and to increase regional forest cover by at least 20 million hectares
by 2020. APEC’s consensus position on the latter topic entitled “Strengthening
Regional Economic Integration,” was endorsed by the Leaders. The APEC meetings
also discussed the recent global problem with food and product safety.
For the Bush Administration, the APEC meetings provided an opportunity to
reiterate its interest in forming a Free Trade Area of the Asia-Pacific (FTAAP) and
to hold bilateral talks with a number of important Asia leaders. During the APEC
meetings, Australian Prime Minister John Howard and President George Bush signed
the U.S.-Australia Defense Trade Cooperation Treaty. Also, during his speech to the
APEC Business Summit, President Bush proposed the creation of an “Asia Pacific
Democracy Partnership.” Some APEC members were critical of the departure of
President Bush and Secretary Rice prior to the end of the Leaders’ Meeting.
Proponents of greater U.S. involvement in APEC argue that the association
provide the United States with a vehicle to re-energize its involvement in Asian trade
discussions and to take a more active diplomatic role in the region. They suggest the
United States should increase its financial assistance to APEC, through the annual
contribution and specific assistance programs, and alterations in U.S. laws and
policies on key issues. Others maintain that APEC may not be an effective
mechanism for advancing U.S. interests in the region.
The President’s initiatives at Sydney present the 110th Congress with
opportunities to weigh in on the issue. Congress may take up the issue of the current
level of direct and indirect financial support for APEC. Also, Congress may consider
APEC’s goals of trade and investment liberalization when legislating on various
other programs. In addition, the Senate faces consideration of the new defense treaty
with Australia.
This report will be updated as circumstances warrant.
Contents
In troduction ......................................................1
APEC’s Approach to Trade Liberalization..............................2
APEC Organization and Operation....................................4
Results of the 2007 Meetings in Sydney................................7
Outcomes of the Major Meetings..................................7
Climate Change, Energy Security, and Clean Development.........7
WTO Negotiations.........................................8
Regional Economic Integration and Free Trade Agreements........8
Trade and Investment Liberalization and Facilitation..............8
Human Security..........................................10
Strengthening APEC......................................10
Other Important Developments..............................11
Noteworthy Bilateral Meetings..................................12
Australia and Prime Minister Howard.........................12
China and President Hu....................................13
Indonesia and President Yudhoyono..........................13
Japan and Prime Minister Abe...............................13
Russia and President Putin..................................14
South Korea and President Roh..............................14
ASEAN Leaders..........................................14
Assessment by the Bush Administration...........................15
Progress on a FTAAP.....................................15
Regional Economic Integration..............................15
Climate Change..........................................16
WTO Negotiations........................................16
Concerns about Meetings in Lima............................16
Comments from the Media.....................................16
APEC and International Trade.......................................18
Assessing APEC’s Impact on Exports and Imports...................18
APEC as a Vehicle for Liberalizing Trade.........................20
APEC and “Human Security”.......................................23
Counterterrorism and Secure Trade...............................24
Diseases ....................................................24
Natural Disasters.............................................25
Implications for Congress..........................................26
Previous Congressional Actions on APEC.........................26
Issues for the 110th Congress....................................27
Proposed Legislation......................................27
Potential Senate Action....................................28
Financial Support.........................................28
APEC as Vehicle for Promoting a FTAAP.....................28
Focus on Human Security Issues.............................29
Competition for Regional Influence..........................29
Appendix A: Annotated Chronology of Past APEC Meetings..............30
List of Figures
Figure 1. APEC Organization........................................4
Figure 2. APEC and World Export Growth (1970=100)..................19
Figure 3. APEC and World Import Growth (1970=100)..................20
Asia Pacific Economic Cooperation (APEC)
and the 2007 Meetings in Sydney, Australia
Introduction
The Asia Pacific Economic Cooperation (APEC) has been identified by both
Congress and the Bush Administration as an organization that may help promote the
U.S. goal of liberalizing international trade and investment in Asia, and possibly the
rest of the world. In addition, because of the unique nature of APEC’s membership
and organization, the association provides a forum at which the United States can
hold bilateral discussions on non-economic matters such as international security and
human rights.
As one indicator of congressional interest in APEC, in the National Defense
Authorization Act for Fiscal Year 2006 (P.L. 109-163), Congress called for the
President to develop a comprehensive strategy to address the “emergence of China
economically, diplomatically, and militarily; promote mutually beneficial trade
relations with China; and encourage China’s adherence to international norms in the
areas of trade, international security, and human rights.”1 It continues by specifying
that this comprehensive strategy should “identify and pursue initiatives to revitalize
United States engagement in East Asia.” The act then states, “The initiatives should
have a regional focus and complement bilateral efforts. The Asia Pacific Economic
Cooperation forum (APEC) offers a ready mechanism for pursuit of such2
initiatives.” [emphasis added]
The notion that APEC may be an effective forum for advancing U.S. interests
in Asia is apparently shared by the Bush Administration. During a White House pre-
trip press briefing on August 30, 2007, National Security Council Senior Director
Dennis Wilder stated, “The importance that the President attaches to APEC is
demonstrated by the fact that he has not missed an APEC leaders meeting since3
taking office.”
In addition, senior administration officials indicate that the White House sees
APEC as a model for regional economic integration in the Asia Pacific which allows
the United States to play a significant role in the region’s political and economic
development. Some members of the Association of Southeast Asian Nations
1 P.L. 109-163, section 1234(b).
2 P.L. 109-163, section 1234(c)(4).
3 “Press Briefing on the President’s Trip to Australia and the APEC Summit by Senior
Administration Officials,” U.S. Department of State, August 30, 2007.
(ASEAN)4 have been actively pursuing alternative “Asian only” models for regional
economic development, including “ASEAN + 1” (ASEAN and China), “ASEAN +
3” (ASEAN, China, Japan, and South Korea), and the East Asia Summit (EAS), also
known as “ASEAN + 6” (ASEAN, Australia, China, India, Japan, New Zealand, and
South Korea).
The Bush Administration’s interest in APEC may bring up the regional forum
before the 110th Congress in several ways. First, Congress may choose to consider
the level of direct and indirect financial support provided to APEC. Second,
Congress may take into account U.S. commitments to APEC when considering
legislation on various trade and non-trade issues. Third, Congress may increase
oversight of APEC-related activities and programs of the U.S. Trade Representative,
the Department of State and other federal departments and agencies.
Although both Congress and the Bush Administration view APEC as important
to U.S. trade and economic and human security interests in the Asia, it is uncertain
that APEC is a reliable mechanism for advancing those interests and if Congress and
the Bush Administration share a common view of what the U.S. interests in Asia are.
In particular, the organizational and operational structure of APEC is unusual among
multilateral associations, reflecting an atypical approach to trade liberalization. As
a result, APEC’s approach, organization, and operations may make it difficult for the
United States to promote its positions on various issues through its activities in
APEC.
APEC’s Approach to Trade Liberalization
APEC is an association of 21 “member economies”5 bordering the Pacific
Ocean that are working cooperatively to promote economic growth and prosperity in
the Asia-Pacific region. During the 1994 meetings in Bogor, Indonesia, APEC
established the “Bogor Goals” of “free and open trade and investment in the
Asia-Pacific by 2010 for industrialized economies and 2020 for developing
economies.”6 These goals have been reaffirmed at the Leaders’ Meeting each
subsequent year.
APEC began in 1989 as an Australian initiative — backed by Japan and New
Zealand — in recognition of the growing interdependence among Asia-Pacific
4 ASEAN members include Brunei Darussalam, Burma (Myanmar), Cambodia, Indonesia,
Laos, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
5 It currently consists of 21 “member economies” — Australia, Brunei Darussalam, Canada,
Chile, Chinese Taipei (Taiwan), Hong Kong (China), Indonesia, Japan, Malaysia, Mexico,
New Zealand, Papua New Guinea, the People’s Republic of China, Peru, the Republic of
Korea, the Republic of the Philippines, the Russian Federation, Singapore, Thailand, the
United States, and Vietnam. The members of APEC are referred to as economies or
members — not nations or countries — due to the concurrent membership of Hong Kong,
the People’s Republic of China, and Taiwan.
6 The complete text of the Bogor Goals is available on APEC’s web page at
[ ht t p: / / www.apec.or g/ apec/ l e ader s__decl ar at i ons/ 1994.ht ml ] .
economies and in response to the free-trade areas that had developed in Europe and
North America. It is the only international trade organization in which Hong Kong,
mainland China, and Taiwan are all members.
In contrast to most other multilateral organizations, APEC is a cooperative
forum in which members arrive at decisions via consensus. All commitments made
by members are voluntary; APEC has no formal enforcement mechanisms to compel
members to comply with any trade liberalization policies previously declared at
APEC meetings — an approach often referred to as “open regionalism.”7 Point 9 of
the 1994 “APEC Economic Leaders’ Declaration of Common Resolve” states,
“APEC economies that are ready to initiate and implement a cooperative arrangement
may proceed to do so while those that are not yet ready to participate may join at a
later date.”8
The underlying notion of the APEC approach to trade liberalization is that
voluntary commitments are easier to achieve and more likely to be implemented than
obligatory commitments derived from agreements negotiated by more traditional —
and potentially, confrontational — methods. By establishing a common vision or
goal for the organization, the belief is that future APEC discussions can make more
rapid progress towards the organization’s goals by seeking consensus views with
which members are willing to comply.
By contrast, trade agreements negotiated according to more traditional
approaches tend to foster confrontation and expectations of reciprocal concessions.
Lacking a shared goal or objectives, it may be difficult to resolve differences among
the parties and complete an agreement. Later on, if any party to the agreement feels
that it was inequitable, they may fail to comply with the terms of the agreement, or
withdraw from the agreement in its entirety, even if there are formal sanction or
grievance provisions within the agreement.
APEC strives to meet the Bogor Goals in three “broad areas” of cooperation.
First, members consult with each other to formulate individual and collective actions
to liberalize merchandise and service trade, as well as international investment.
Second, members discuss their domestic regulations and procedures to find ways of
facilitating international business. Third, the members engage in “Economic and
Technical Cooperation,” or ECOTECH, to provide training and foster greater
cooperation among APEC members.
In 1995, APEC created a template to achieve the Bogor Goals in its “Osaka
Action Agenda.”9 The Osaka Action Agenda emphasizes APEC’s “resolute
opposition to an inward-looking trading bloc that would divert from the pursuit of
7 For a more detailed discussion of APEC and the concept of “open regionalism,” see
Christopher M. Dent, New Free Trade Agreements in the Asia-Pacific, Palgrave MacMillan,
8 See [http://www.apec.org/apec/leaders__declarations/1994.html].
9 The complete text of the 1995 Leaders’ declaration and a link to the Osaka Action Agenda
is available on APEC’s web page at [http://www.apec.org/apec/leaders__declarations/
global free trade” by accepting a set of fundamental principles for APEC’s trade and
investment liberalization and facilitation. These principles include
comprehensiveness; WTO consistency; comparability; non-discrimination;
transparency; flexibility; and cooperation.
APEC Organization and Operation
APEC’s unusual approach to trade liberalization is reflected in its organization
and operation. APEC’s organization consists of a small Secretariat in Singapore,
which reports to the constituents of five separate groups: the preeminent Leaders’
Meeting, the APEC Business Advisory Council, the Ministerial Meeting, the Sectoral
Minister Meetings, and the Senior Officials Meetings. The Secretariat, in turn,
supervisors the work of six different groups: the Committee on Trade and
Investment, the Economic Committee, the Steering Committee on ECOTECH, the
Budget and Management Committee, Special Task Groups, and Working Groups.
Each member of APEC seconds representatives to work on the Secretariat’s staff to10
serve as program directors.
Figure 1. APEC Organization
The focal point of APEC activities is the annual Leaders’ Meeting in which the
APEC leaders set goals, publicize them, and provide momentum for the process.11
This is usually held in October or November of each year, and is attended by heads
of state except for those from Taiwan and Hong Kong who, because of China’s
10 In 2006, the United States seconded Scott Smith to work with the APEC Secretariat.
11 The Leaders’ Meetings are technically not summits because of the presence of Hong Kong
and Taiwan, whose leaders are not officially heads of state.
objections, send other representatives. The first Leaders’ Meeting was held in 1993
on Blake Island, near Seattle, Washington.
Major decisions are generally affirmed and/or announced at the Leaders’
Meeting. The meeting also provides a platform for and gives momentum to major
APEC initiatives. Although APEC confines its agenda primarily to economic issues,
the leaders often hold bilateral meetings during the Leaders’ Meeting to discuss
international security, human rights, and other issues.
Most of the decisions announced at the Leaders’ Meeting are first considered
in a series of Ministerial Meetings held throughout the year. These include the
respective ministers dealing with trade, finance, transportation, telecommunications,
human resources development (education), energy, environment, science and
technology, and small and medium-sized enterprises. The largest ministerial is the
annual Joint Ministerial Meeting which precedes the Leaders’ Meeting. It usually is
attended by foreign trade or commerce ministers from member states. The various
Ministerial Meetings make recommendations to the Leaders’ Meeting; they do not
have the authority to act independently on behalf of APEC.
Working under the direction of the various APEC ministers, the Senior Officials
coordinate the activities of the various committees, working groups and task forces
within APEC. Senior Officials Meetings are held three or four times a year. The
current U.S. Senior Official for APEC is Ambassador Patricia M. Haslach.
The APEC Business Advisory Council (ABAC) consists of up to three
individuals appointed by each APEC member. It provides advice on implementing
the APEC agenda and other specific business-related issues.12 ABAC also can make
comments on the recommendations of the various Ministerial Meetings.
Most of the specific tasks before APEC are addressed in committees, working
groups, or expert groups that deal with economic issues of importance to the region.
For implementing the Bogor goals, the Committee on Trade and Investment plays the
key role. APEC has ten working groups that work on specific areas of cooperation
and facilitation: (1) Trade and Investment Data, (2) Trade Promotion, (3) Industrial
Science and Technology, (4) Human Resources Development, (5) Energy
Cooperation, (6) Marine Resource Conservation, (7) Telecommunications, (8)
Transportation, (9) Tourism, and (10) Fisheries. Each working group has one or
more shepherds (members) who take responsibility for coordinating the work of the
group.
The APEC chair rotates annually and since 1989 has been held by (in order):
Australia, Singapore, South Korea, Thailand, the United States, Indonesia, Japan, the
Philippines, Canada, Malaysia, New Zealand, Brunei, People’s Republic of China,
Mexico, Thailand, Chile, South Korea, and Vietnam. In 2007, Australia was once
again the APEC chair, with the Leaders’ Meeting held on September 8-9 in Sydney.
12 U.S. representatives to ABAC are: Spencer Kim, Chairman of CBOL Corporation; and
Michael Phillips, Chairman of Russell Investment Group.
Decisions within APEC’s various organizational bodies are based on the
consensus approach of APEC. Most committees, working groups, and special task
groups have representatives from all 21 members, and select their leadership from
amongst themselves. Members may delay or refrain from any action recommended
or approved by a meeting, committee, working group or special task force without
facing sanctions or recriminations from other members. However, all decisions and
agreements of the various meetings, committees, and working groups must be
implemented in accordance with the Osaka Action Agenda.
APEC actions take place at three levels: actions by individual members; actions
with the confines of APEC; and collective APEC actions with respect to other
multinational organizations. The primary form of individual member actions are the
“Individual Action Plans,” or IAPs. Each year, APEC members submit at the
Ministerial Meeting an IAP that spells out what steps the member has taken and/or
will take to advance their trade regime towards the achievement of the Bogor Goals.
IAPs typically are organized along both sectoral (e.g., architectural services) and
topical (e.g., customs procedures) lines. Although members cannot impose changes
on each other’s IAPs, the Osaka Action Agenda calls on each member to consult,
submit, and review the IAPs to foster comparability, transparency, and cooperation
amongst the IAPs.
The internal actions of APEC generally involve research on topics related to
trade liberalization, the exchange of best practices, and the standardization of policies
and procedures related to international trade and investment. In some cases, APEC
will create a working group on a particular topic, with the goals of generating a
“collective action plan,” or CAP. In some cases, the CAPs are little more than a
topical summary of the member IAPs; in other cases, the working group plays a more
active role in promoting trade liberalization and facilitation via the CAPs.
Another example of an APEC’s internal action is the “APEC Business Travel
Card,” an idea advanced by the ABAC. Business travelers possessing an APEC
Business Travel Card are allowed fast-track entry and exit through special APEC
lanes at major airports, and multiple, visa-free entry amongst members that recognize
the card.
Collective actions of APEC usually involve joint or coordinated efforts to
advance trade and investment liberalization in other multilateral organizations. Most
recently, APEC’s collective actions have focused on helping complete the Doha
Round of the WTO. For example, following the 2006 Leaders’ Meeting in Hanoi,
APEC released a statement on the “Doha Development Agenda of the WTO” that
affirmed the members’ “collective and individual commitments to concluding an
ambitious and balanced WTO Doha agreement” by each member “moving beyond
our current positions in key areas of the Round.” The key areas mentioned were
“trade-distorting farm support,” “market access in agriculture,” “real cuts in
industrial tariffs,” and “new openings in services trade.”
Results of the 2007 Meetings in Sydney
In January 2007, Australia assumed the chair of APEC, and was the host for the
various APEC meetings held throughout the year. Following the meetings in 2006,
various goals were suggested for 2007, including “further studies on ways and means13
to promote regional economic integration.” The official theme for the APEC 2007
meetings was “Strengthening Our Community, Building a Sustainable Future.”
In the runup to the events in Sydney, the host country indicated that the main
foci for the meetings would be climate change and regional economic integration.
These themes were echoed in pre-event statements by several other APEC members,
including China. Successful conclusion of the Doha Round negotiations, energy
security, and counter-terrorism efforts were other major topics raised by members
prior to the meetings in early September.
Outcomes of the Major Meetings
The major APEC meetings for 2007 were held in Sydney in September. The
delegation was headed by President George W. Bush. The 19th APEC Ministerial
Meeting was held on September 5 and 6; the U.S. delegation was headed by
Secretary Rice.
Consistent with past practices, a Leaders’ joint declaration and a ministerial
joint statement were released after their respective meetings. Both documents
focused on a limited number of topics, which generally reflected the goals established
for 2007 at the end of the 2006 APEC meetings. What follows is a topical summary
of APEC’s achievements for 2007 as presented in the two documents.
Climate Change, Energy Security, and Clean Development. The issue
of climate change became the top topic for the 2007 Economic Leaders’ Meeting.
In a separate joint declaration on the subject, the economic leaders agreed that
“economic growth, energy security and climate change are fundamental and
interlinked challenges for the APEC region.”14 The leaders reaffirmed their
commitment to the United Nations Framework Convention on Climate Change and
stated their support for a post-2012 international climate change arrangement to
replace the expiring Kyoto Protocol. With the exception of Australia, Brunei
Darussalam, and the United States, all APEC members are parties to the Kyoto
Protocol.
The APEC members pledged to take four specific actions on climate change.
First, they set “an APEC-wide regional aspirational goal of a reduction in energy
intensity of at least 25 percent by 2030 (with 2005 as the base year). Second, APEC
13 “2006 Leaders’ Declaration,”14th APEC Economic Leaders’ Meeting, 18-19 November
14 The full text of the Leaders’ declaration on the climate change is available at:
[ ht t p: / / www.apec2007.or g/ document s / Decl a r a t i on% 20Cl i mat e% 20Change.pdf ] .
members will attempt to increase forest coverage by at least 20 million hectares of
all types of forests by 2020. Third, they agreed to create an Asia-Pacific Network for
Energy Technology (APNet) to strengthen collaboration on energy research. Fourth,
APEC will also establish an Asia-Pacific Network for Sustainable Forest
Management and Rehabilitation.
WTO Negotiations. For the third year in a row, the APEC Leaders issued a
separate statement on the ongoing WTO negotiations.15 Their joint statement
maintains that the negotiations “offer unparalleled potential to create a better trading
environment.” In addition, the APEC leaders “insist that consensus will only be
possible on the basis of an ambitious, balanced result that delivers real and
substantial market access improvements for agricultural and industrial goods and for
services and real and substantial reductions in trade-distorting agricultural subsidies.”
The joint statement on WTO negotiations ends with a call for all APEC
members to participate in the continuing talks in Geneva, and to resume negotiations
based on the draft texts tabled by the chairs of the negotiating groups on agriculture
and non-agricultural market access.
Regional Economic Integration and Free Trade Agreements. In
contrast to the 2006 meetings in Hanoi, the topic of regional economic integration
was not the leading issue for the 2007 APEC meetings. The economic leaders
“welcomed and endorsed” a report submitted by the APEC ministers entitled,
“Strengthening Regional Economic Integration.”16 In their report, the ministers
reaffirmed APEC’s commitment to the Bogor Goals and their support for a
“multilateral trading system.” To that end, they stated that APEC’s priority was the
successful conclusion of the Doha Round, but that APEC also supported regional
economic integration through “high-quality and comprehensive” regional trade
agreements (RTAs) and free trade agreements (FTAs), including the possible long-
term prospects for forming a “Free Trade Area for the Asia-Pacific (FTAAP).”
Trade and Investment Liberalization and Facilitation. The annual
Leaders’ and Ministerial Meetings are generally the occasions at which APEC
members submit an update on their individual IAPs, and committees and working
groups submit their CAPs. The meetings also provide an opportunity for APEC to
provide guidance on which areas of trade liberalization and facilitation are of the
greatest interest among the member economies.
In their joint declaration, the Leaders endorsed three specific areas where APEC
members have agreed to “accelerate efforts” to promote trade and investment
liberalization and facilitation: (1) Reducing barriers to trade and investment through
FTAs and RTAs; (2) Improving the regional business environment; (3) Facilitating
15 The full text of the Leaders’ statement on the WTO negotiations is available at:
[http://www.apec2007.or g/ document s / S t a tement% 20on%20the%20WT O%20Negotiatio
ns.pdf].
16 A copy of the ministers’ report on regional economic integration is available online at:
[ h t t p : / / www.apec2007.or g/ d o c u me n t s / St r engt heni ng% 20Regi onal % 20Economi c % 20Int e
gration.pdf].
integration of the such sectors as transportation, telecommunications, mining, and
energy. 17
In 2007, the Ministers “welcomed” the completion of seven “IAP Peer
Reviews” by Australia, China, Hong Kong, Japan, New Zealand, South Korea and
Taiwan. They also “endorsed the revised CAPs being implemented by all APEC
members in pursuit of APEC’s free trade and investment goals.”18 They also
“welcomed” APEC’s 2nd Trade Facilitation Action Plan that was endorsed at a
Ministers Responsible for Trade (MRT) meeting in July 2007. The action plan set
out a framework for reducing trade transaction costs by 5% by 2010.
The Ministers expressed their pleasure at Mexico and the United States joining
the APEC Business Travel Card Scheme, increasing the number of APEC members
participating in the program to 19.19 However, the United States is considered a
transitional member. Business travelers from APEC member economies to the United
States are still required to present a valid passport and visa (if required by U.S. law).
APEC Business Travel Card holders are provided expedited visa interviews and
entitled to use “fast-track” immigration lanes (typically the lanes designated for flight
crews) at U.S. international airports.
The United States cited a few new advances in trade and investment
liberalization and facilitation in its 2007 IAP.20 First, the United States designated
East Timor and Liberia as “beneficiary developing country” under the Generalized
System of Preferences (GSP), in order to foster trade with both nations.21 Second,
the United States concluded a number of bilateral free trade agreements and bilateral
investment treaties (BITs) lowering trade and investment barriers.22 In addition, the
bilateral trade agreements with Bahrain and Morocco and a bilateral investment
treaty with Uruguay went into force in 2006, as well as the multilateral U.S.-Central
American-Dominican Republic (CAFTA-DR) Free Trade Agreement. In general, the
United States maintains that it has very few trade and investment barriers that prevent
its achievement of the Bogor Goals.
Prior to the meetings in Sydney, during an APEC Budget and Management
Committee meeting in Singapore, the United States announced it was going
17 Joint Declaration of the 15th APEC Economic Leaders’ Meeting, September 9, 2007.
18 Joint Statement of the 19th APEC Ministerial Meeting, September 5-6, 2007.
19 Canada and Russia are not currently members of the APEC Business Travel Card Scheme.
20 The separate chapters of the U.S. IAPs — as well as the IAPs for all the other member
economies — are available at [http://www.apec-iap.org/].
21 For an overview of GSP, see CRS Report RL33663, Generalized System of Preferences:
Background and Renewal Debate by Vivian C. Jones.
22 For an list of existing U.S. bilateral trade and investment agreements, see “2007 Trade
Policy Agenda and 2006 Annual Report,”on the USTR’s web page:
[http://www.ustr.gov/Document_Library/Reports_Publications/2007/2007_T r a d e _ P o l i c y
_Age nda/Section_Index.html ].
contribute $1.5 million to APEC’s Trade and Investment Liberalization and
Facilitation Special Account and a total of $800,000 to the APEC Support Fund.23
Human Security. Over the last few years, APEC has expanded its agenda to
consider issues of “human security,” principally on issues related to terrorism,
disease and natural disasters. Besides the obvious direct suffering of the victims,
APEC sees threats to human security as undermining international trade, economic
development, and prosperity.
A new item added to the list of threats to human security in 2007 was product
safety. In their joint declaration, the Leaders “agreed to the need to develop a more
robust approach to strengthening food and consumer product safety standards and
practices in the region, using scientific risk-based approaches and without creating
unnecessary impediments to trade.” The Leaders directed the Ministers to work on
this priority issue.
On the subject of terrorism, the Leaders “reaffirmed our commitment to
dismantle terrorist groups, eliminate the danger posed by the proliferation of weapons
of mass destruction, and to protect our economic and financial systems from abuse
from terrorist groups.”
Concerning threats posed by disease, the Leaders focused their efforts on the
potential risk of pandemics and combating the spread of HIV/AIDS. The Leaders
reiterated APEC’s commitment to build regional preparedness to respond to potential
pandemics. Also, they endorsed guidelines for the creation of a supportive workplace
environment for workers living with HIV/AIDS.
Natural disasters were also a priority during the Sydney meetings. Since the
2004 tsunami, the possible consequences of another major natural disaster has
continued to be a concern in the region. In December 2005, Congress passed the
“Tsunami Warning and Education Act” (P.L. 109-424), which authorizes increased
U.S. funding for the tsunami warning system in the Pacific over the next five years.
Finally, the Leaders identified “high and volatile energy prices” as an ongoing
economic risk to the region, and that the risk can “best be met by expanded trade and
investment to boost supply and greater efficiency in use.”
Strengthening APEC. Besides the preceding economic and trade issues, the
Leaders raised one administrative issue in their joint declaration — the need to make
APEC more efficient and responsive. To that end, the Leaders established the APEC
Support Unit and transferred the appointment of the Executive Director to a fixed
term.
Also, in order to “maintain APEC’s momentum,” the Leaders decided to
continue its current moratorium on new members until at least 2010. The new
member moratorium was seen as a blow to India, who is considered a leading
23 “United States Contributes $2.3 Million to Support APEC Projects,” Office of the
Spokesman, U.S. Department of State, August 2, 2007.
candidate for the next round of new APEC members. According to a source on the
Philippine delegation, “western members” opposed India joining APEC because of
its political and economic strength, but were open to the admission of “smaller
countries” such as Colombia and Panama.24 Other economies that have expressed
an interest in joining APEC are Burma, Cambodia, Ecuador, Laos, Macau, Mongolia,
Pakistan, and Sri Lanka.
Other Important Developments. In his speech to the APEC’s business
summit, President Bush spoke at some length about the development of democracy
in Asia.25 According to President Bush, “The expansion of freedom and democracy
in the Asia Pacific region is one of the great stories of our time.” After noting that
at the end of World War II, Australia and New Zealand were the only democracies
on the western side of the Pacific, he pointed out that 60 years later, East Timor,
Indonesia, Japan, the Philippines, South Korea, and Taiwan are now democracies.
Later on in his speech, President Bush called for efforts to bring democracy to Burma
and North Korea; and said that the United States looked forward to “free and fair
elections” in Thailand. He also spoke of “encouraging Russia’s leaders to respect the
checks and balances that are essential to democracy” and working with China’s
leaders to use the opportunity of the 2008 Olympics to demonstrate “a commitment
to greater openness and tolerance.”
Following his summary of democracy in Asia, President Bush proposed “the
creation of a new Asia Pacific Democracy Partnership.” As he described it,
“Through this partnership, free nations will work together to support democratic
values, strengthen democratic institutions, and assist those who are working to build
and sustain free societies across the Asia Pacific region.” No details were provided
in the speech or following the speech on the membership or financing of the Asia
Pacific Democracy Partnership.
The annual Leaders’ and Ministerial Meetings are also an occasion for APEC
to release new reports and make important announcements. The 2007 meetings
continued this tradition. During the Ministerial Meeting, APEC announced the
publication of its “Code of Conduct for Business” as part of its ongoing anti-
corruption campaign.26 It was also announced that APEC had accepted the offers of
the United States and Russia to host the 2011 and 2012 meetings respectively. The
24 “India to Remain Outside APEC until at least 2010,” IST, September, 9, 2007. The article
is not specific on he meaning of the ambiguous term, “western members.”
25 The full text of President Bush’s speech to the APEC Business Summit is available at:
[ ht t p: / / www.whi t e house.gov/ news/ r el eases/ 2007/ 09/ pr i nt / 20070907.ht ml ] .
26 The press release of the announcement and a copy of the “APEC Code of Conduct for
Business” is available online at: [http://www.apecsec.org.sg/apec/news___media/media_
releases/060907_aus_bizc odeconduct.html #].
Noteworthy Bilateral Meetings
The annual APEC Leaders’ Meeting also provides a rare opportunity for the
U.S. President to hold bilateral meetings with a number of important government
leaders at one location. In particular, the annual APEC gathering is the one time
when top officials from China, Hong Kong, and Taiwan are attending the same event.
As a result, it has not been unusual for the U.S. President to schedule a series of
bilateral meetings during the week of the APEC Leaders’ Meeting.
In 2007, President Bush continued the tradition of bilateral meetings. During
his time in Sydney, he met with Australia’s Prime Minister John Howard, China’s
President Hu Jintao, Indonesia’s President Susilo Bambang Yudhoyono, Japan’s
Prime Minister Shinzo Abe, Russia’s President Vladimir Putin, and South Korea’s
President Roh Moo-Hyun. In addition, President Bush hosted a working lunch with
the leaders from seven members of the Association of Southeast Asian Nations
(ASEAN) that are also members of APEC — Brunei Darusaalam, Indonesia,
Malaysia, the Philippines, Singapore, Thailand, and Vietnam. What follows is a
summary of President Bush’s bilateral meetings.
Australia and Prime Minister Howard.27 The bilateral meeting between
President Bush and Prime Minister Howard was originally scheduled to occur after
the Leaders’ Meeting. However, President Bush’s controversial decision to leave
early meant the bilateral meeting was moved forward to September 4, 2007. The
rescheduling of the bilateral meeting, and President Bush’s early departure,
apparently caused some friction between Australia and the United States prior to the
start of the APEC events.
The main announcement made following the September 4, 2007 meeting
between President Bush and Prime Minister Howard was the signing of
U.S.-Australia Defense Trade Cooperation Treaty. A White House summary of the
terms of the treaty indicates that most U.S. and Australian military articles would be
able to be exported within a “circle” consisting of the U.S. government, the
Australian government, and specific defense companies in both nations without prior28
government approval. President Bush indicated that he intended to submit the
treaty to the U.S. Senate for approval after his return to the United States.
In addition to the new treaty, the two leaders held what Prime Minister Howard29
called “a very broad-ranging discussion.” Prime Minister Howard commented in
particular on the topics of climate change and conditions in the Middle East
(including Iraq, Iran and the Israeli-Palestinian situation). President Bush’s
27 For more information on U.S.-Australia relations, see CRS Report RL33010, Australia:
Background and U.S. Relations, by Bruce Vaughn.
28 “U.S.-Australia Defense Trade Cooperation Treaty,” White House fact sheet, September
29 “President Bush and Australian Prime Minister Howard Discuss U.S.-Australia Defense
Trade Cooperation Treaty in Joint Press Availability,” White House Office of the Press
Secretary, September 4, 2007.
comments on their meeting focused on the new treaty and the situations in Iraq and
Afghanistan. He also raised concerns about the recent demonstrations in Burma and
what he characterized as “tyrannical behavior” by the nation’s military government.
President Bush held a separate meeting with Australia’s opposition Labour Party
leader, Kevin Rudd, on September 6, 2007. When asked about the intent of the
meeting prior to President Bush’s departure for Sydney, State Department officials
pointed out similar meetings with opposition party leaders in the past, and that the
President Bush’s primary objective would be to explain the importance of Australia
keeping its troops in Iraq. Many political observers in Australia expect the Labour
Party to win the next parliamentary elections, and believe Mr. Rudd may be
Australia’s next Prime Minister.
China and President Hu.30 The meeting between President Bush and
China’s President Hu Jintao occurred on September 6, 2007. In his summary of the
meeting, President Bush highlighted their talks on North Korea, Sudan, climate
change, and economic and trade relations. He also mentioned that the subjects of
product safety, exchange rates, and religious freedom were raised during the meeting.
Summarizing their conversation as “candid and friendly,” President Hu focused his
comments on climate change, Taiwan, the Korean Peninsula, the Iranian nuclear
issue, and Sudan.
Indonesia and President Yudhoyono.31 The main topic of the meeting
was what President Bush called Indonesia’s “struggle against extremism” — an
indirect reference to the Jemaah Islamiah (JI) and other terrorist organizations or
separatist movements operating in Indonesia.32 The two presidents also spoke about
the importance of military-to-military cooperation between Indonesia and the United
States, pointing out the value of a recent U.S. visit by Indonesian military officers.
President Bush also complemented Indonesia’s efforts on climate change,
highlighting their efforts in forest and coral reef preservation.
Japan and Prime Minister Abe.33 In what proved to be his last official
meeting with President Bush, Prime Minister Abe summarized the main topics of
their discussion of September 8, 2007, as being climate change, the fight against
terrorism, and the importance of the Japanese-American military refueling operation
30 For more information about U.S.-China relations, see CRS Report RL33877, China-U.S.
Relations: Current Issues and Implications for U.S. Policy, by Kerry Dumbaugh.
31 For more information about U.S.-Indonesia relations, See CRS Report RL32394,
Indonesia: Domestic Politics, Strategic Dynamics, and American Interests, by Bruce
Vaughn.
32 For more information about terrorist organizations operating in Indonesia, see CRS Report
RL32394, Indonesia: Domestic Politics, Strategic Dynamics, and American Interests, by
Bruce Vaughn.
33 For more information about U.S.-Japan relations, see CRS Report RL 33436, Japan-U.S.
Relations: Issues for Congress, by Emma Chanlett-Avery, Mark E. Manyin, and William
H. Cooper.
in the Indian Ocean. In his summary, President Bush echoed the topics mentioned
by Prime Minister Abe, and added energy security to the list.
Russia and President Putin.34 Following their meeting on September 7,
including missile defense, Russia’s WTO accession plans, Iran’s nuclear program,
and environmental issues.
South Korea and President Roh.35 President Bush and South Korean
President Roh Moo-Hyun met on the afternoon of Friday, September 7, 2007. The
two discussed a wide range of topics, including the six-party talks with North Korea
and the situation in Iraq. The pending U.S.-Korea Free Trade Agreement was not
mentioned in a White House summary of the content of the meeting.
The official post-meeting statements by both presidents focused on the talks
with North Korea and the prospects for the end of the Korean War. At a
post-meeting press conference, President Roh asked President Bush to “be a little bit
clearer in your message” on a supposed U.S. declaration to end the Korean War.
President Bush responded, “I can’t make it any more clear, Mr. President. We look
forward to the day when we can end the Korean War. That will end — will happen
when [North Korean President] Kim Jong-Il verifiably gets rid of his weapons
programs and his weapons.”36
The brief exchange was the subject of discussion in the international media and
among Korea analysts. Some speculate that President Bush had omitted an agreed
upon statement in his summary of the meeting and President Roh was reminding him
of the missing statement. Others have speculated that President Roh attempted to
press the issue in hopes of obtaining a stronger statement on the subject from the U.S.
President. There have also been claims that the exchange was the result of a
translation error during the Presidents’ meeting. Whatever the cause, President
Roh’s break with the usual post-meeting protocol, and the apparent irritation it
caused President Bush, was viewed by many as another example of lingering tensions
between the two presidents.
ASEAN Leaders. During the working lunch on September 7, 2007, President37
Bush announced his decision to create the position of Ambassador to ASEAN. He
34 For more information about U.S.-Russia relations, see CRS Report RL33407, Russian
Political, Economic, and Security Issues and U.S. Interests, by Stuart D. Goldman.
35 For more information about U.S.-South Korea relations, see CRS Report RL33567,
Korea-U.S. Relations: Issues for Congress, by Larry A. Niksch.
36 “President Bush Meets with South Korean President Roh,” White House Office of the
Press Secretary, September 7, 2007.
37 “United States Cooperation with Southeast Asia,” fact sheet, White House Office of the
Press Secretary, September 7, 2007.
also stated his intention to host a meeting in the United States to celebrate 30 years
of U.S.-ASEAN relations.38
President Bush’s invitation to ASEAN members to a meeting to be held in
Texas raised questions about the possible attendance by Burma. During a press
conference held on September 7, 2007, U.S. Deputy National Security Advisor Jim
Jeffrey stated, “we’ll work out the level of attendance of the various countries,
including, hypothetically, the attendance of Burma, at another time.”39 The United
States currently has a ban on economic and trade relations with Burma.40
Assessment by the Bush Administration41
To the Bush Administration, the key outcomes of the APEC meetings in Sydney
were: (1) Progress on the development of a FTAAP; (2) The endorsement of the
APEC report on regional economic integration; (3) Agreement on a joint declaration
on climate control; and (4) The Leaders’ joint statement on the WTO negotiations.
Looking ahead to the 2008 meetings in Lima, Peru, the White House is primarily
concerned about some hesitance on the part of some of Asian APEC members to
fully participate in the meetings.
Progress on a FTAAP. The U.S. proposal to explore the possible creation
of a FTAAP was accepted at last year’s APEC Leaders’ Meeting in Hanoi, but in
relatively general terms. In the view of the White House, various elements of this
year’s APEC meetings indicate progress was being made in obtaining more interest
and support for the concept of an FTAAP. In particular, the inclusion of the
exploration of a FTAAP as one of the “agreed actions” in the report on regional
economic integration was perceived as a qualitative change in APEC’s overall
attitude from a year before. In addition, by endorsing the report, the Leaders have
given a green light to specific research projects described in the report that may
become a precursor to a larger feasibility study for a FTAAP. However, the Bush
Administration is aware that China, Japan, and some ASEAN members remain
skeptical about the feasibility and desirability of creating a FTAAP.
Regional Economic Integration. To the Bush Administration, the report
on regional economic integration creates an “umbrella” over much of APEC’s work
on trade and investment liberalization, as well as advances the discussion on forming
a FTAAP (see above). In addition to its “agreed actions” on the exploration of a
FTAAP, the report on regional economic integration includes “agreed actions” on:
the promotion of “high-quality, comprehensive RTAs/FTAs”; the reduction of
“behind-the-border barriers” to trade and investment; support for structural reform
of member economies; the strengthening of financial markets; the improvement of
38 Ibid.
39 “Press Briefing by Deputy Press Secretary Dana Perino and Senior Administration
Officials,” White House Office of the Press Secretary, September, 7, 2007.
40 For details, see CRS Report RL33479, Burma-U.S. Relations, by Larry A. Niksch.
41 Analysis in this section is based on publicly available materials from various Executive
Branch agencies and conversations with senior trade officials in the Bush Administration.
key sectors in APEC (including transportation, mining, and the environment); and
capacity building for APEC’s developing economies. As described by one
administration official, the “agreed actions” provide APEC with a clearer agenda for
its trade and investment liberalization efforts.
Climate Change. The significance of APEC’s joint declaration on climate
control is largely in the inclusion of both the United States and China as endorsers
of the document. While the environmental objectives in the joint declaration are non-
binding, the document does find common ground between China and the United
States on pollution reduction efforts.
WTO Negotiations. Although this year’s joint statement on the WTO
negotiations is considered softer in tone and less specific in content that last year’s
statement, the Bush Administration considers it useful to have all 21 APEC members
endorsing the concept of completing the Doha Round negotiations. In addition, the
Bush Administration points to the statement’s agreement that the resumption of
negotiations “on the basis of the draft texts tabled by the chairs of the negotiating
groups” as a significant outcome.
Concerns about Meetings in Lima. From its inception, there has been
mixed attitude within APEC about the inclusion of members from the eastern rim of
the Pacific Ocean. For some of the Asian members of APEC, their economic interest
and connections to the eastern rim of the Pacific are focused almost exclusively in
the United States. As a result, according to administration officials, it may be difficult
for some Asian members to drum up sufficient domestic support to finance a
delegation to the meetings in Lima comparable in size and stature as those sent to
APEC meetings held in Asia. The concern is that reduced representation from Asia
may undermine the ability to make much progress during the 2008 meetings.
Comments from the Media
The early departure of both Secretary Rice and President Bush from their
respective meetings was heavily discussed by the media. The decision by President
Bush to depart after the first day of the two-day Leaders’ Meeting42 came only a few
days before the start of the APEC meetings, and was considered by some
commentators a blow to relations with Australia and counterproductive to U.S.
ambitions to forward its agenda during the event. To some analysts, Bush’s early
arrival did little to counteract the negative impact of the early departure.
In the weeks prior to the APEC meetings, the media ran stories indicating that
many of President Bush’s top advisors were recommending that he not attend the
APEC meetings at all. The perceived slight to APEC was compounded by President
Bush’s misstatement in which he referred to APEC as OPEC, and his comments
about visiting “Austrian troops” in Iraq when he meant “Australian troops.” In
addition, Secretary Rice’s decision to depart with President Bush, as well as her
decision not to attend the recent ASEAN meetings, exacerbated existing regional
42 U.S. Trade Representative Susan Schwab represented the United States at the second day
of the Leaders’ Meeting.
concerns that the Bush Administration is not giving adequate attention to the Asia
Pacific Region.
During the pre-trip press briefing, President Bush’s early departure was the
focus of two questions. The first question asked if the White House was “worried that
[it] sends the wrong signal to the region that he is not interested in their concerns, or
that he’s giving short shrift to their concerns.”43 The second question raised concerns
that by not giving “Asia the attention it deserves,” the Bush Administration has
“created an opening for China to increase its clout.”44 Senior Director Wilder replied
that he did not find such criticisms “very credible.” In addition, Deputy National
Security Advisor Dan Price, during a press briefing on September 7, 2007, made the
following unsolicited statement:
Now, there’s been a fair amount of chatter in some circles questioning the U.S.
commitment to this region. As the President made clear today, as well as in the
meetings and as he will make clear, U.S. engagement in APEC is permanent,45
unshakeable, and growing.
Besides the perceived inattention to the region as a whole, the late changes in
President Bush’s schedule supposedly created some tension with Australia and Prime
Minister Howard. According to media accounts, Prime Minister Howard had pressed
President Bush to remain for both days, or at least designate Secretary Rice as his
replacement for the second day of meetings. Both requests were unmet by the United
States. In addition, the changes in security arrangements made necessary by Bush’s
early arrival and early departure added to the already high $140 million security bill
for the event. Prime Minister Howard was already facing sharp domestic criticism for
the high cost and tight security arrangements implemented for the APEC meetings.
The APEC Leaders’ joint declaration on climate control received a mixed
response by the international media. To some, the fact that the 21 APEC members
— including China, Japan and the United States — had agreed to common targets for
improvements in energy efficiency and reforestation was a promising development
for the creation of a post-Kyoto Protocol agreement on pollution control. However,
others pointed to the voluntary nature of the “aspirational global emission reduction
goals” as proof that the statement has little real value or significance. Other
commentators felt that domestic political forces (for example, Prime Minister
Howard’s concerns about the upcoming elections) had driven APEC’s willingness
to agree to the joint declaration on climate control.
The second major document coming out of the 2007 APEC meetings, the report
on regional economic integration, also was met with a mixed response. Some
observers criticized the report for being too general and too encompassing in content,
and as a result, provided little sense of overall direction or guidance for APEC. For
43 “Press Briefing on the President’s Trip to Australia and the APEC Summit by Senior
Administration Officials,” U.S. Department of State, August 30, 2007.
44 Ibid.
45 “Press Briefing by Deputy Press Secretary Dana Perino and Senior Administration
Officials,” White House Office of Press Secretary, September 7, 2007.
example, they say the report presents the growing number of FTAs and RTAs, the
long-term possibility of forming a “Free Trade Area of the Asia-Pacific,” and the
continued development of the WTO as forces promoting regional economic
integration, but does not explore the possible tensions between those three trends.
Upon closer reading, the report endorses all three approaches to greater trade and
investment liberalization without discussing potential contradictions that might
ensue.
President Bush’s proposal of an “Asia-Pacific Democracy Partnership” (ADP)
garnered modest attention in the media and from other APEC members. According
to one report, “while China does not welcome the ‘Democracy Partnership,’ ... it is
not overly alarmed either.”46 The press in Taiwan noted, with some apparent
pleasure, that President Bush included Taiwan among the examples of democracy in
Asia.47 Commentators expressed misgivings about President Bush’s vagueness about
the membership and financing of the ADP, and were concerned that some APEC
members might be apprehensive about how their participation in the ADP would
impact their relations with China.
APEC and International Trade
The primary goal of APEC is to foster international trade by means of trade and
investment liberalization and facilitation. Since its inception in 1993 and the
adoption of the Bogor Goals in 1994, APEC members have lowered their trade
restrictions to varying degrees. With over a decade of history, one question is
whether or not there has been a corresponding rise in APEC members’ foreign trade
accompanying their liberalization and facilitation efforts.
Assessing APEC’s Impact on Exports and Imports
Figure 2 compares the growth of intra-APEC and total APEC exports to the
growth of global exports. Starting in 1981, total APEC exports begin growing faster
than global exports, and intra-APEC exports are outstripping total APEC exports.
However, the pace of export growth slows for all three categories in 1995, with
noticeable downturns in APEC exports occurring in 1998 and 2001, corresponding
to the Asia financial crisis and the attacks on the World Trade Center and the
46 “China Unfazed by Democracy Partnership,” by Stephen de Tarczynki, Inter Press
Services News Agency, September 12, 2007.
47 “Bush Lauds Taiwan’s Democratic Society,” by Charles Snyder and Jessie Ho, Taipei
Times, September 8, 2007.
Pentagon.48 Since the downturn in 2001, the pace of world export growth has
increased, and the pace of APEC export growth has increased even more.
Figure 2. APEC and World Export Growth (1970=100)
6,000
5,000
4,000
3,000
2,000
1,000
0
70 75 80 85 90 95 00 05
19 19 19 19 19 19 20 20
Intra-APECTotal APECWorld
Source: Data from UNCTAD
Import statistics reveal a similar pattern to exports (see Figure 3). From 1970
to 1980, there is little difference in the import growth rate for intra-APEC, total
APEC, and the world. Starting in 1981, APEC’s imports — both from amongst its
members and from the world — begin to increase faster than world imports. The
divergence between APEC import growth and world imports continues until 1997,
when the Asian financial crisis precipitates a sharp decline in APEC’s imports and
global imports in 1998. For the next two years — 1999 and 2000 — global imports
and APEC’s imports recover, only to drop once again following the attacks on
September 11, 2001. Import levels grew modestly in 2002 for both APEC and the
world, and then accelerated starting in 2003, with APEC’s import growth rate
outstripping that of the world.
48 For more information on the impact of the Asian financial crisis on world trade, see CRS
Report RL30517, Asian Financial Crisis and Recovery: Status and Implications for U.S.
Interests, by Richard P. Cronin and CRS Report 98-434, The Asian (Global?) Financial
Crisis, the IMF, and Japan: Economic Issues, by Dick Nanto; for more information about
the impact of the attacks on the World Trade Center and the Pentagon on world trade, see
CRS Report RL31617, The Economic Effects of 9/11: A Retrospective Assessment,
coordinated by Gail Makinen.
Figure 3. APEC and World Import Growth (1970=100)
6,000
5,000
4,000
3,000
2,000
1,000
0
70 75 80 85 90 95 00 05
19 19 19 19 19 19 20 20
Intra-APECTotal APECWorld
Source: Data from UNCTAD
While the trade data appear to support the notion that APEC has promoted trade
growth for its members, the results are not conclusive. Although APEC’s exports
and imports have grown at a faster rate than world trade figures since the creation of
APEC, it is uncertain if its trade growth is the result of trade liberalization and
facilitation, or caused by other economic factors. APEC’s members include several
of the fastest growing economies in the world — for example, China and Vietnam
— so the average economic growth rate for APEC members is higher than the global
average. APEC’s greater economic growth rate could be sufficient to explain most
of its better trade performance compared to global figures.
However, the fact that intra-APEC exports and imports are growing at a faster
rate than total APEC trade raises concerns about possible trade diversion. On the one
hand, the greater growth of intra-APEC trade could be the result of lower intra-APEC
trade barriers stemming from the members’ actions via their IAPs and CAPs, and the
spread of RTAs and FTAs amongst APEC members. On the other hand, the higher
intra-APEC trade expansion could represent the diversion of trade from other nations
as APEC members form preferential bilateral trade agreements that siphon off trade
from non-APEC members.
APEC as a Vehicle for Liberalizing Trade
Even with its “open regionalism” approach to trade and investment
liberalization, APEC has been seen since its inception as a possible vehicle for
liberalizing both regional and global trade. In general, observers focus on two
methods by which APEC may help foster greater trade and investment liberalization.
The first method is by forming a coalition during WTO negotiations. The efforts of
the APEC Geneva Caucus during the recent Doha discussions are often cited as an
example of how APEC can help promote trade and investment liberalization. There
is little disagreement among experts that APEC has been a positive force for trade
and investment liberalization within the WTO.
The second method is more controversial. Over the last decade, the number of
Asia-Pacific bilateral trade agreements (BTAs) has grown dramatically.49 However,
according to one observer, “The result is a competitive form of liberalization. As
occurred within APEC itself, there are competing models of FTAs that cannot be
integrated.”50 A reporter described the phenomena as follows:
The trade diplomacy of east Asia has become so blindingly complex that even
the metaphors are getting muddled. The subtitle of one academic paper on free
trade agreements (FTAs) suggests using “spaghetti bowls as building blocks.”
Another describes a “patchwork of bilateral hub-and-spoke FTAs in a noodle
bowl.”
According to some experts, the growth of bilateral trade agreements (BTAs)
amongst APEC members represents an unsystematic process that could lead to the
formation of an APEC-wide regional trade agreement (RTA) much like the proposed
FTAAP. According to this view, the actions of APEC — via the IAPs, CAPs, and
the various committee reports — forms a commonality of perspective on issues,
thereby permitting some members to conclude limited BTAs. The idea is that over
time, the network BTAs will form the basis for the creation of a RTA.
However, other experts view the proliferation of BTAs as forming a barrier to
trade and investment liberalization. As described by one scholar, “The resulting web
of agreements and negotiations is fragmented, uncoordinated, and uneven in content
and coverage.”51 Because many BTAs are politically (not economically) motivated,
the emerging BTAs in Asia generally suffer from several problems — WTO-
incompatibility; narrow sector focus; discriminatory rules of origin (ROOs) — that
make future amalgamation of the BTAs nearly impossible. As one expert describes
it:
The predictable results of foreign policy-driven FTA negotiations light on
economic strategy are bitty, quick-fix sectoral deals. Politically sensitive sectors
in goods and services are carved out.... Little progress is usually made in tackling
domestic regulatory barriers.... Finally, the sway of power politics can result in
49 For a description of the recent growth of BTAs in Asia, see CRS Report RL33653, East
Asian Regional Architecture: New Economic and Security Arrangements and U.S. Policy,
by Dick K. Nanto.
50 “APEC and Free Trade Agreements in the Asia Pacific,” by Prof. Jane Kelsey. Paper
presented at Asia-Pacific Research Network Policy Conference on Trade, July 11-13, 2005,
Hong Kong. Paper available online at [http://www.bilaterals.org/article-print.php3
?id_article=2346].
51 Kelsey, op. cit.
highly asymmetrical deals, especially when one of the negotiating parties is a52
major player.
Even if the merger of the various BTAs into an Asia-Pacific RTA were
accomplished, there are concerns that the resulting agreement would institutionalize
a number of tariff and non-tariff trade barriers in the region. A U.S. trade official
was quoted as saying, “Bilateral FTAs being pursued by China, and Japan, and Korea
to some extent, risk falling to the lowest common denominator. As someone once
quipped, ‘they are neither F, nor T, nor A.’”53
Some observers go on to argue that the rising number of BTAs in the region is
generating dynamics that are preventing the formation of a FTAAP and progress in
the Doha Round, despite the best efforts of APEC. One scholar writes:
I note how the current discussions with the Asia-Pacific Economic Cooperation
(APEC) forum to establish a Free Trade Area of the Asia-Pacific (FTAAP),”
writes one scholar, “was also proposed at APEC’s Santiago summit just two
years ago. It failed then as it will probably fail now because of the immense
political and technical challenge of harmonizing a large number of heterogeneous54
bilateral FTAs into a unified regional agreement.”
Another scholar is even more dismissive of APEC’s potential, writing, “It cannot be
expected to contribute anything serious to regional economic integration.”55
Others see a slightly different effect of the BTAs on prospects for the creation
of a FTAAP.56 In this view, the stalled Doha Round is fostering the further
disintegration of the global trading system, generating a rising number of BTAs, and
increasing the risk of the creation of a discriminatory and undesirable East Asia Free
Trade Area (EAFTA). The fear is that the EAFTA would become another barrier to
the completion of the Doha Round, and possibly generate protectionist reactions from
the European Union and the United States.
To counteract these trends, some experts say APEC should push for the creation
of a FTAAP. In this view, advancing the idea of a FTAAP, APEC might improve the
prospects for the Doha Round, as non-APEC members may prefer to see progress at
the WTO over the creation of a FTAAP. However, even if Doha talks remain stalled,
discussion of the creation of a FTAAP could limit the growth of BTAs in Asia,
and/or help insure that any new BTAs are less discriminatory and WTO-compatible.
52 “FTAs and the Prospects for Regional Integration in Asia,’ by Razeen Sally. ECIPE
Working Paper, No. 1, 2006.
53 “A Complex Curse: East Asia Exposes the Limits of the Regional,” by Alan Beattie,
Financial Times, Nov. 13, 2006.
54 “Put Effort into Doha Ahead of Proliferating Bilateral Deals,” by Dr. Christopher M.
Dent. Financial Times, Nov. 21, 2006, p. 12.
55 Sally, op. cit.
56 An example of this view is C. Fred Bergsten’s speech, “The Free Trade Area of the Asia-
Pacific Is the Next Step Forward for APEC (and for the World Trading System),” presented
to APEC’s CEO Summit on Nov. 18, 2006 in Hanoi, Vietnam.
In summary, supporters of this view see APEC “playing four roles in this new
regional dynamic.”57 Those roles are:
1. Organizing regular meetings of regional trade and finance ministers and
political leaders to advance the process at the multilateral and bilateral
levels;
2. Reinforcing the ‘Bogor Goal’ of free and open trade and investment by
3. Developing “model measures” for FTAs and RTAs to achieve “high
quality” liberalization and consistency; and
4. Promoting WTO-plus FTAs that are consistent with the policy agenda of
the international and regional financial institutions.
APEC and “Human Security”
Initially, APEC was viewed as a purely economic forum. APEC carefully kept
its distance from political matters for fear that such issues would cause divisions
within the group — particularly among China, Japan, Russia, Taiwan, and the United
States. Such divisions could thwart cooperation in achieving economic goals.
Consideration of non-economic issues was confined to bilateral meetings held before
and after the Leaders’ Meeting.
In 1995, the issue was raised of whether APEC should be expanded to include
consideration of regional security issues. The consensus in 1995 among APEC
members seemed to be that regional security issues should be discussed in the58
ASEAN Regional Forum and other fora rather than in APEC.
Starting in 2001, however, security was added to the official agenda of the
Leaders’ Meeting. At the October 2001 Meetings in Shanghai, the attacks on the
World Trade Center and the Pentagon overshadowed the economic agenda. The
Leaders issued a joint statement condemning the attacks — APEC’s first joint
statement on non-economic issues. Since 2001, the agenda for the Leaders’ Meeting
has included issues related to “human security,” with a focus on three topics:
terrorism, disease, and disasters.
57 Kelsey, op. cit.
58 The ASEAN Regional Forum usually meets after the ASEAN Ministerial Conference
and, in addition to the 10 members of ASEAN, includes the Australia, Canada, China, the
European Union, Japan, New Zealand, Russia, South Korea, and United States. For more
information about the 1995 discussions, see Moosa, Eugene. Regional Security Remains a
Taboo at APEC. Reuters Newswire Service. Nov. 19, 1995.
Counterterrorism and Secure Trade
Among APEC members, there are four principal areas of concern about
terrorism. First, some member economies face domestic extremists who episodically
conduct acts of violence targeted at the civilian population. Second, there is some
evidence suggesting that international terrorist networks, including Al Qaeda, are
utilizing financial institutions in the Asia-Pacific region to funnel money across
international borders. Third, APEC member economies wish to restrict the
movement of suspected terrorists through the region. Fourth, APEC has made the
security of trade one of its key priorities. Over the last five years, APEC has
developed programs to respond to each of these concerns.
To oversee its efforts on terrorism, APEC established the Counter-Terrorism
Task Force (CTTF) in October 2002. The CTTF reports directly to the APEC’s
Senior Officials. Its mission “is to identify and assess counter-terrorism needs,
coordinate capacity building and technical assistance programs, cooperate with
international and regional organizations and facilitate cooperation between APEC
fora on counter-terrorism issues.”59 The CTTF generally meets quarterly, in
coordination with the Senior Officials Meetings. At a meeting held in Cairns,
Australia, in July 2007, the CTTF set up a study group to develop a plan to facilitate
trade recovery in the aftermath of a major terrorist event. In addition to the work of
the CTTF, each APEC member has created a Counter-Terrorism Action Plan
(C TAP ). 60
Much of APEC’s counterterrorism efforts have focused on the issue of secure
trade. In 2002, APEC created the “Secure Trade in the APEC Region (STAR)
Initiative.” The STAR Initiative is “focused on policies and procedures to enhance
security and efficiency in the APEC region’s seaports, airports and other access
points, including port and airport security; shipping container security; coastal patrol;
capacity building; financial assistance, and private sector initiatives.”61 The most
recent STAR Conference, held in Sydney on June 27 and 28, 2007, focused on
enhancing security and safety while containing costs.
Diseases
In 2003, APEC established its ad hoc Health Task Force (HTF) to deal with the
threats posed by emerging infectious diseases. In part, the HTF was created in
response to the February 2003 outbreak of Severe Acute Respiratory Syndrome
(SARS) in several APEC member economies. Not only did the people of several
APEC members suffer serious health problems due to SARS, the economies of both
59 For more details about the CTTF, see [http://www.apec.org/apec/apec_groups/
som_special_task_gr oups/counter_terrorism.html ].
60 Copies of each member’s CTAP are available online at [http://www.apec.org/apec/
apec_gr oups/som_special_task_gr oups/counter _terrorism/coun t e r _ t e r r o r i s m_action_plan
s.html].
61 For more information about the STAR Initiative, see [http://www.apec.org/apec/
apec_gr oups/som_special_task_gr oups/counter _terrorism/secure_trade_in_the.html ].
SARS-infected and non-infected members were harmed by the loss of tourism.62 The
value of having the HTF was confirmed in 2004, with the outbreak of avian influenza
H5N1 in 2004. Besides its responses to SARS and avian influenza, APEC is also
concerned about the threat posed by HIV/AIDS. During the second Senior Officials
Meeting in 2007, APEC endorsed the transformation of the Health Task Force to the
Health Working Group (HWG) in 2008.
Most of APEC’s efforts on disease have focused on the exchange of medical
information and research, building a rapid-response and containment program, and
the exchange of “best practices.” For SARS and avian influenza, APEC has held a
series of meetings to discuss means of more rapidly identifying and responding to
possible outbreaks, and sharing “best practices” in areas such as passenger screening
techniques and safeguarding measures for poultry. Regarding HIV/AIDS, APEC’s
HTF is fostering the exchange of information on members’ programs to prevent the
spread of the disease, and improving workplace management of HIV/AIDS.
The second APEC Health Ministers Meeting was held on June 7 and 8, 2007,
in Sydney, Australia. During the meeting, the health ministers released APEC’s
guidelines for employers to create a workplace environment supportive for workers
with HIV/AIDS.63
Natural Disasters
The third form of threat to human security of great concern to APEC are natural
disasters. In December 2004, a 9.3 earthquake off the coast of Indonesia propagated
a devastating tsunami that killed thousands of people in several nations bordering the
Indian Ocean. Although there was a tsunami warning system in place, many people
were not warned of the impending natural disaster and fell victim to the tsunami.
In response to the Indian Ocean tsunami, APEC Senior Officials adopted in
March 2005 an “APEC Strategy on Response to and Preparedness for Natural
Disasters and Emergencies.” They also established APEC’s “Task Force for
Emergency Preparedness (TFEP).” Working with APEC’s Industrial Science and
Technology Working Group (ISTWG), the TFEP has held a number of seminars and
training sessions to help APEC members improve their seismic monitoring systems,
disaster response infrastructure, building and infrastructure construction codes, and
public education systems to reduce their exposure to natural disasters.
APEC members are also providing additional funding to natural disaster
warning systems. In December, Congress passed P.L. 109-424, the “Tsunami
62 For a study on the economic effects of SARS, see “Globalization and Disease: The Case
of SARS,” by Jong-Wha Lee and Warwick J. McKibbin, Brookings Discussion Papers in
International Economics, February 2004. Available online at [http://www.brookings.org/
vi ews/papers/mckibbin/20040203.pdf].
63 A copy of the document, “Guidelines for APEC Member Economies for Creating an
Enabling Environment for Employers to Implement Effective Workplace Practices for
People Living with HIV/AIDS and Prevention in Workplace Settings,” is available online
at: http://aimp.apec.org/Documents/2007/SOM/SOM3/07_som3_013.doc
Warning and Education Act.” The act, signed by the President on December 20,
2006, authorizes additional funding to “enhance and modernize the existing Pacific
Tsunami Warning System to increase coverage, reduce false alarms, and increase the
accuracy of forecasts and warnings....”64 It authorizes $25 million in FY2008, and
then authorizes an increase in funding by $1 million each year until FY2012.
Implications for Congress
Congress — and the Bush Administration — have identified APEC as the
primary regional institution in the Asia-Pacific for promoting open trade and practical
economic cooperation. APEC is also seen as a useful forum for advancing U.S.
concerns on issues related to human security.
Since APEC’s inception in 1989, congressional interest and involvement with
APEC has focused on two areas: (1) direct and indirect financial support for APEC;
and (2) oversight of U.S. participation in APEC.
Previous Congressional Actions on APEC
Section 424 of the Foreign Relations Authorization Act, Fiscal Years 1994 and
Pacific Economic Cooperation and provided for U.S. contributions of APEC out of
appropriations for “Contributions to International Organizations.” The Science, State,
Justice, Commerce, and Related Agencies Appropriations Act of 2006 appropriated
a total of $1.17 billion “to meet annual obligations of membership in international
multilateral organizations,” including APEC. The current level of direct U.S.
financial support for APEC is $601,000 per year.65
Section 2540 of the National Defense Authorization Act for Fiscal Year 1996
made “a non-communist country that was a member nation of the Asia Pacific
Economic Cooperation (APEC) as of October 31, 1993” eligible to participate in a
loan guarantee program “arising out of the financing of the sale or long-term lease
of defense articles, defense services, or design and construction services.”66
The Federal Agriculture Improvement and Reform Act of 1996 (P.L. 104-127)
included a finding by Congress that:
... during the period 1996 through 2002, there will be several opportunities for
the United States to negotiate fairer trade in agricultural products, including
further negotiations under the World Trade Organization, and steps toward
possible free trade agreements of the Americas and Asian-Pacific Economic
64 H.R. 1674, Section 3(2).
65 The United States provides indirect support for APEC programs and activities on a case-
by-case basis through discretionary funds from various federal departments and agencies.
The exact level of indirect support is unknown.
66 Language now codified into U.S. Law under Title 10, Subtitle A, Part IV, Chapter 148,
Subchapter VI, section 2540.
Cooperation (APEC); and the United States should aggressively use these
opportunities to achieve more open and fair opportunities for trade in agricultural67
products.
In the Intelligence Reform and Terrorism Prevention Act of 2004 (P.L. 108-
... other economic and regional fora, such as the Asia-Pacific Economic
Cooperation (APEC) Forum, and the Western Hemisphere Financial Ministers,
have been used to marshal political will and actions in support of combating the68
financing of terrorism (CFT) standards.
Finally, the National Defense Authorization Act for Fiscal Year 2006 (P.L. 109-
that the President should present to Congress quickly a comprehensive strategy
to —
(1) address the emergence of China economically, diplomatically, and militarily;
(2) promote mutually beneficial trade relations with China; and
(3) encourage China’s adherence to international norms in the areas of trade,
international security, and human rights.
To be included in that strategy are “[a]ctions to encourage United States diplomatic
efforts to identify and pursue initiatives to revitalize United States engagement in
East Asia. The initiatives should have a regional focus and complement bilateral
efforts. The Asia-Pacific Economic Cooperation forum (APEC) offers a ready
mechanism for pursuit of such initiatives.”
Issues for the 110th Congress
For the 110th Congress, issues related to APEC could arise in a variety of direct
and indirect ways. In addition to the issue of U.S. financial support for APEC,
Congress may choose to express its sense on different policy issues. Also, there are
oversight issues raised by U.S. participation in various APEC activities.
Proposed Legislation. In the 110th Congress, one proposed bill specifically
mentions APEC — the United States-China Diplomatic Expansion Act of 2007 (H.R.
3272).69 Introduced by Representative Mark Kirk, and cosponsored by
Representatives Rick Larsen, Steve Israel, Susan Davis, and Charles Boustany, H.R.
3272 would authorize the appropriation in FY2008 of $65 million for the
construction of a new consulate in China, $10 million for additional personnel for the
67 Language now codified into U.S. Law under Title 7, Chapter 41, Subchapter IV, section
68 Language now codified into U.S. Law under Title 31, Chapter, Subtitle IV, Chapter 53,
Subchapter II, section 770.
69 The House and Senate passed separate resolutions — H.Res. 422 and S.Res. 203 — that
mention APEC in passing, “... its seat as a permanent member of the United Nations
Security Council and on the Asia-Pacific Economic Cooperation, China is an emerging
power....”
U.S. diplomatic mission in China, $6 million for other State Department personnel,
$10 million for various Chinese language programs, and $2 million for rule of law
initiatives in China. The bill also would authorize the appropriation of $3 million for
a U.S. contribution to APEC.
Potential Senate Action. As previously mentioned, the U.S.-Australia
Defense Trade Cooperation Treaty signed during the APEC meetings would be
subject to the approval of the Senate, once submitted to the Senate by the President.
In addition, if and when the President nominates someone to be “Ambassador to
ASEAN,” the appointment would be subject to Senate advice and consent.
Financial Support. The most direct issue would be the level of U.S. financial
support for APEC. Although the President does have the authority under current
federal law to determine the level of APEC’s funding without action by Congress,
Congress may choose to take up this issue (see above). For example, Congress could
consider setting funding levels, directly or indirectly, for APEC’s trade facilitation
programs independently from the amounts announced in August 2007.
APEC as Vehicle for Promoting a FTAAP. Congress has recognized the
potential of APEC as a vehicle for promoting free trade. In addition, to the issue of
a possible Free Trade Area of the Asia-Pacific, negotiations over regional trade
integration under APEC would likely raise issues related to labor rights and
environment protection, and whether the United States would be able to respond to
foreign country violations of labor or environmental standards with economic
sanctions or monetary fines (as stipulated in the U.S.-Singapore/Chile FTAs).
Progress on the Doha Round. Successful completion of the Doha Round
is a major trade priority for the Bush Administration. However, negotiations are
complicated, in part by the U.S. merchandise trade deficit, especially bilateral trade
deficits with some APEC member economies. While many economists attribute the
U.S. trade deficit to U.S. macroeconomic conditions, when combined with specific
trade disputes with some APEC members, prospects for adjustments in the U.S. offer
on Doha are uncertain.
The 2006 Leaders’ joint declaration called on all APEC members — including
the United States — “to spare no efforts to break through the current deadlocks.”
This year’s “Statement on the WTO Negotiations” takes a slightly softer tone, stating
that “consensus will only be possible on the basis of an ambitious, balanced result
that delivers real and substantial market access improvements for agricultural and
industrial goods and services, and real and substantial reductions in trade-distorting
agricultural subsidies.”70 This would likely require congressional action on specific
legislation.71 In particular, the farm income and price support programs, which are
70 “Statement on the WTO Negotiations,” 15th APEC Economic Leaders’ Meeting,
September 9, 2007.
71 See CRS Report RL33934, Farm Bill Proposals and Legislative Action in the 110th
Congress, by Renee Johnson, Geoffrey S. Becker, Ralph M. Chite, Tadlock Cowan, Ross
W. Gorte, Charles E. Hanrahan, Remy Jurenas, Jim Monke, Jean M. Rawson, Randy
(continued...)
dictated primarily by Title I of the 2002 farm bill (P.L. 107-171) and expire in 2007,
might be affected by efforts to complete the Doha Round.
This touches on the broader domestic debate over whether the United States
should continue to pursue the liberalization of international trade and investment with
other nations, the effect of trade and globalization on import-sensitive industries, and
whether increased trade threatens or enhances U.S. prosperity, employment
opportunities, and economic security.
Focus on Human Security Issues. In addition to the various economic
and trade issues, Congress may also consider issues pertaining to human security as
a result of the U.S. involvement with APEC. For example, U.S. recognition of the
APEC Business Travel Card could raise domestic security concerns to the expedited
visa and entry privileges extended to card bearers. Similarly, concerns about a
potential influenza pandemic may engender interest in providing more support to
APEC’s Health Task Force.
Competition for Regional Influence. From a geopolitical perspective,
APEC is a leading forum through which the United States can broadly engage the
Asia-Pacific region. The United States is not included in the other regional
multilateral associations, such as ASEAN and the newly-created East Asian Summit
(EAS), and no other forum includes such a wide range of Asian economies. From
a strategic perspective, many experts believe APEC could plan a useful role in
advancing U.S. interests in Asia.
Over the last few years, the United States’ position as the leader in the region
has been challenged by China. China’s accession to the WTO, its recent efforts to
negotiate BTAs across Asia (including the Comprehensive Economic Partnership
Agreements with Hong Kong and Macau), and its unilateral liberalization of its trade
regime, has arguably placed China as a competitor to the United States.
Many argue that the United States should re-energize its involvement in Asian
trade discussion and elevate the importance of APEC to reassert U.S. leadership.
They advocate both increased financial assistance to APEC, though the annual
contribution and specific assistance programs, and alteration in U.S. laws and
policies on key issues. Others say that APEC should reformulate its mission by
focusing more narrowly on trade facilitation and economic integration, abandoning
many of the working groups that are not central to the core goals, and strengthening
the Secretariat. The annual Leaders’ Meeting continues to provide prestige and offer
an opportunity for heads of state, particularly those of smaller countries, to interact
with top U.S. officials. APEC offers the additional benefit of including Taiwan and
Hong Kong as member economies, unlike the EAS.
71 (...continued)
Schnepf, Jasper Womach, Jeffrey A. Zinn, and Joe Richardson.
Appendix A: Annotated Chronology of Past
APEC Meetings
The following table provides a brief summary of the past APEC Meetings. For
more details about each meeting, see the official APEC web page,
[ h ttp://www.apec.org/ ] .
Year and LocationKey Outcomes
1989 - Canberra,Concept of forming APEC is discussed at an informal
Australia Ministerial-level dialogue group with 12 members.
1993 - Blake Island,First formal APEC Leaders’ Meeting includes representatives
U.S.A. from 14 members: Australia, Brunei Darussalam, Canada, China,
Hong Kong, Indonesia, Japan, New Zealand, Philippines,
Singapore, South Korea, Thailand, and United States.
1994 - Bogor,APEC sets the Bogor Goals of “free and open trade and
Indonesiainvestment in the Asia-Pacific by 2010 for developed economiesa
and 2020 for developing economies.”
a framework for meeting the Bogor Goals.
1996 - Manila, theThe Manila Action Plan is adopted, which outlines the trade and
Philippinesinvestment liberalization and facilitation measures to be taken byc
APEC members to reach the Bogor Goals. The APEC economies
submit their first “Individual Action Plans,” or IAPs, indicating
how they intended to move toward fulfillment of the Bogor goals.
Moreover, APEC Leaders called for conclusion of the
Information Technology Agreement in the WTO, which acted as
a decisive catalyst toward successful completion of this
agreement in 1997.
Canadacaused by the Asian Financial Crisis. APEC ministers reject a
Japanese-backed proposal to establish a separate Asian fund to
provide financial support for countries coping with financial
difficulties. However, APEC does endorse a proposal for Early
Voluntary Sectoral Liberalization (EVSL) in 15 sectors, and
decides that Individual Action Plans should be updated annually.
1998 - KualaPresident Clinton does not attend because of the imminent
Lumpur, Malaysiabombing of Iraq. Economic recession continues for several
APEC members, with varying levels of hardship. Malaysian
Prime Minister Mahathir Mohamad, host of the APEC meetings,
continues criticism of trade and investment liberalization, which
he blames for causing the Asian Financial Crisis and his
country’s deep recession. APEC agrees on the first nine sectors
for EVSL and seeks an EVSL agreement with non-APEC
members at the World Trade Organization.
Year and LocationKey Outcomes
1999 - Auckland,APEC meetings occur earlier than usual because the World Trade
New ZealandOrganization’s Ministerial Conference is to be held in Seattle on
November 30-December 3, 1999. The APEC leaders endorsed
the launching of a new WTO round of multilateral trade
negotiations and agreed that the new round of trade negotiations
to be concluded within three years. The APEC Meetings occurs
at a time of increasing violence in East Timor; APEC leaders put
pressure on Indonesia to allow international peacekeepers into
East Timor. APEC commits to paperless trading by 2005 in
developed economies and 2010 in developing economies. APEC
Business Travel Card scheme is approved.
Begawan, Bruneisystem, providing IAPs online. APEC also states that China
Darussalamshould be accepted into the WTO soon, followed by Taiwan and
sometime later by Russia and Vietnam. Following a bilateral
meeting, the United States and Singapore announce that theye
would begin negotiations on a bilateral free trade agreement.
2001 - Shanghai,Meeting is held five weeks after the attacks on the World Trade
ChinaCenter and Pentagon. APEC adopts the Shanghai Accord, which
focuses on Broadening the APEC Vision, Clarifying the
Roadmap to Bogor and Strengthening the Implementation
Mechanism. The e-APEC Strategy is adopted, which sets out an
agenda to strengthen market structures and institutions, facilitate
infrastructure investment and technology for on-line transactions
and promote entrepreneurship and human capacity building. A
leaders’ statement on counterterrorism is the first issued by
APEC dealing explicitly with a non-economic topic. In the
statement, the leaders condemned the attacks on the United
States, committed themselves to preventing and suppressing all
forms of terrorists acts in the future, to enhance counterterrorism
cooperation, and take appropriate financial measures to prevent
the flow of funds to terrorists.
2002 - Los Cabos,APEC adopts a Trade Facilitation Action Plan, agreeing to
Mexicoreduce transaction costs in international trade by 5% by 2006.
Policies on Trade and the Digital Economy and Transparency
Standards are adopted. The leaders also declare support for the
Doha negotiations (including the abolition of agricultural export
subsidies) and call for their conclusion by January 1, 2005. In
conjunction with the Mexico APEC Meetings, the United States
announced the Enterprise for ASEAN Initiative, a new trade
initiative with the Association of Southeast Asian Nations.
APEC’s second Counter-Terrorism Statement is delivered, along
with the adoption of the Secure Trade in the APEC Region
(STAR) Initiative.
Year and LocationKey Outcomes
2003 - Bangkok,APEC issues first separate statement on Doha negotiations. The
ThailandAPEC ministers in attendance call for the reopening of the
negotiation process based on the text of the unsuccessful
proposal made during the WTO talks in Cancun, Mexico. APEC
pledges to take specific actions to dismantle terrorist groups,
eliminate the danger of weapons of mass destruction and
confront other security threats. Members sign up to the APEC
Action Plan on SARS and the Health Security Initiative to further
protect personal security. The Leaders’ statement calls for more
six-party talks and for North Korea to demonstrate “verifiable”
progress in dismantling its nuclear weapons program.
2004 - Santiago,APEC issues second statement on Doha Round, setting
ChileDecember 2005 as target date for completion of negotiations.
APEC adopts “Best Practices” guidelines to ensure that FTAs
and RTAs fully comply with or exceed WTO guidelines. APEC
establishes an Anticorruption and Transparency (ACT) program
to aid members in fighting corruption and increasing
transparency; the United States is among the seven member
economies funding the program.
2005 - Busan, SouthAPEC adopts the “Busan Roadmap,” which include deadlines for
Koreareducing transaction costs and developing a plan for structural
reform to make member economies more business-friendly. The
21 leaders issue a special statement regarding the Doha
negotiations encouraging member economies to exercise “the
necessary flexibility” to resolve “the current impasse in
agricultural negotiations, in particular in market access.” The
United States, Canada, and Australia push for the statement to
single out the European Union for their protectionist measures,
but other APEC members demur. Special attention is given to
the threat of a pandemic influenza stemming from the incidences
of avian flu in both birds and humans.
2006 - Hanoi,APEC initiates a study of regional economic integration to
Vietnaminclude consideration of U.S.-proposed Free Trade Area of the
Asia-Pacific. The APEC Leaders issue a separate declaration on
the Doha Round talks, calling for deeper reductions in trade-
distorting farm subsidies and increasing market access for goods
and services. The United States announces it will start
recognizing the APEC Business Travel Card in 2007.
a. The complete text of the Bogor Goals is available on APEC’s web page at
[http://www.apec.org/apec/leaders__declarations/1994.html].
b. The complete text of the 1995 Leaders’ declaration and a link to the Osaka Action Agenda is
available on APEC’s web page at [http://www.apec.org/apec/leaders__declarations/1995.html].
c. The complete text of the 1996 Leaders’ declaration, including the Manila Action Plan is available
on APEC’s web page at [http://www.apec.org/apec/leaders__declarations/1996.html#Manila].
d. See CRS Report RL30272, Global Financial Turmoil, the IMF, and the New Financial
Architecture, by Dick K. Nanto.
e. See CRS Report RL31789, Singapore-U.S. Free Trade Agreement, by Dick K. Nanto.