A Mid-term Stocktake ofProgress Towards the Bogor GoalsBusan Roadmap to the Bogor Goals

17th APEC Ministerial Meeting • Busan, Korea • 15-16 November 2005

Content

Chapter One Overview2 The Bogor Declaration2 The Impact of the Bogor Goals2 The Evolving International Trade Environment3 Commitment to the Bogor Goals3 Key Tasks

Chapter Two Achievements6 Trade and Investment Barriers have Fallen7 APEC has Strengthened the Multilateral Trading System7 Economic and Technical Cooperation (ECOTECH)

Chapter Three Opportunities and Challenges Ahead11 A Consensus-based and Non-binding Forum11 Supporting the Multilateral Trade Negotiations11 ECOTECH and Capacity Building11 The Spread of Free-trade Agreements11 Strengthening APEC’s Work on Investment12 Trade Facilitation

Chapter Four Busan Roadmap to the Bogor Goals14 Support for the Multilateral Trading System14 Strengthening Collective and Individual Actions15 Promotion of High-Quality RTAs/FTAs15 Busan Business Agenda16 A Strategic Approach to Capacity Building16 The Pathfinder Approach

Chapter One

Overview

1

In 1994, APEC Leaders agreed in the BogorDeclaration to a common goal of free andopen trade and investment in the Asia-Pacificregion - by 2010 for industrialised economiesand 2020 for developing economies. Thesetargets became known as the Bogor Goals.

The Declaration gave a sharp focus to thevision of regional economic cooperation thathad driven APEC’s creation five years earlier,and set an ambitious target for APECeconomies’ emerging trade and investmentwork program. It reflected the basic principlesof APEC cooperation: voluntary participation,comprehensiveness, mutual respect andconsensus-based decision making.

In adopting the Bogor Goals, APEC Leadersmade two key commitments:

• Free and open trade and investment in theAsia-Pacific should encourage and

strengthen trade and investmentliberalization in the world as a whole. APECmust not be an inward-looking tradingbloc that diverts from the pursuit of globalfree trade.

• Trade liberalization efforts alone areinsufficient to generate trade expansion.Trade and investment facilitation must alsobe expanded and accelerated to furtherpromote the flow of goods, services, andcapital among APEC economies.

The mid-term stocktake (MTST) commissionedby APEC Leaders in 2001, assesses how farAPEC has moved towards the Bogor Goalsand what further actions are needed to reachthe target. The MTST is based on the self-assessment reports from 21 membereconomies and the expert analysis thereonas well as the results from the MTSTsymposium held in May 2005.

The BogorDeclaration

The Impactof the

Bogor Goals

Eleven years later, the Bogor Goals remain akey organising principle for APEC and thedriving force behind its trade and investmentliberalisation and facilitation work program.Driven by this shared commitment, the APECregion has emerged as the engine of worldeconomic growth over the last decade,outpacing the rest of the world in openingitself to international trade and investmentand increasing its share of global output andtrade as a result.

The results of the Stocktake demonstrate thatAPEC economies have achieved significantliberalisation and facilitation of trade andinvestment since 1994. Multilateral, regional,bilateral and unilateral initiatives all havecontributed to a more open regional

environment. Tariff and non-tariff barriershave been removed in many cases andlowered in many others, though liberalisationhas clearly been more successful in somesectors than others. Foreign investment hasbeen liberalised. Outcomes in a range ofother areas designated by the Osaka ActionAgenda (OAA), such as services, competitionpolicy, intellectual property rights and customsprocedures have improved. Economic andtechnical co-operation (ECOTECH) activitieshave developed in parallel to the progressmade on the liberalisation and facilitationfronts. The rewards from these policy choiceshave been substantial and have contributedto sustained economic growth and significantwelfare improvements in the region.

The EvolvingInternational

TradeEnvironment

These achievements are significant and shouldbe recognised as such, and APEC’s progresstowards trade liberalization must bemaintained and strengthened. However, asthe global economy and the world tradingsystem have changed significantly since 1994,an assessment of progress towards the BogorGoals now also has to take into accountfactors such as:• the negotiations under the Doha

Development Agenda (DDA), launched in2001, which have now entered a criticalphase

• the globalisation of business acceleratingthe movement of people, goods, services,and capital in the region

• the widening international trade andinvestment agenda that is now morefocused on issues such as business mobility,anti-corruption, intellectual property rightsand secure trade

• the rapid spread of free trade agreementsseen by most APEC members as one meansto accelerate economic development aswell as trade and investment liberalizationand facilitation

• the additional challenges imposed on tradeand investment through the changinginternational security environment

2

1 Behind-the-border issues arise from economic and social policies concerned primarily with the internal regulation of an economy and the institutionsrequired implementing and enforcing them. They include laws, policies and regulations and practices administering competition, consumer protection,education, government procurement, judicial systems, health services, infrastructure problems, investment regulation, labour market policies, protectionof intellectual property rights, standards, structural reform, taxation, transparency, etc. Some of these laws and policies may also have an effect onforeigners wishing to engage in economic activities within the economy.

As the process of globalisation unfolds andregional integration intensifies, new ways ofconducting business are emerging and newbarriers to trade and investment, both actualand potential, are surfacing.

It is important that APEC does not interpretthe goals of free and open trade andinvestment in a finite or static manner. Theexpanding international trade agenda hassince 1994 broadened to include not onlyborder issues directly related to tradeliberalization, but also facilitation and behind-the-border1 issues such as standards and

conformance, customs procedures,e-commerce and business mobility. Only inrecognising this reality and the fact that theenvironment for trade is constantly evolving,will APEC be able to adapt its focusaccordingly and continue to deliver concreteand commercially relevant outcomes in theyears ahead to realise the Bogor Goals.

While recognizing that the Bogor Goals aredynamic, APEC Leader’s pledge in1994 toachieve free and open trade must bemaintained.

Commitmentto the Bogor

Goals

Key TasksAPEC must revitalise its current agenda inorder to meet the challenges presented bythe changing regional and global businessenvironment. Key components of a futureAPEC agenda should involve:• continuing work on the World Trade

Organisation (WTO)• more ambitious and effective Collective

Action Plans(CAPs) and Individual ActionP lans ( IAPs ) w i th s t r eng thenedimplementation and review processes

• a more intensive focus on trade andinvestment facilitation and improving thebusiness environment behind the border

• more focused and action-orientedcooperation on ECOTECH and a strategicapproach to capacity building

• a comprehensive workplan on RTAs/FTAs

3

Chapter Two

Achievements

5

Tariffs and Non-tariff Measures

Average applied tariffs of APEC economieshave been reduced significantly since APEC'sinception, from 16.9 per cent in 1989 to 5.5per cent in 2004. Almost half of all APECeconomies' tariff lines are at less than 5 percent, and tariffs on many goods are now setat zero or negligible levels. Tariff informationhas been available “on-line” in most APECeconomies s ince 1996, enhancingtransparency across the region. The APECSecretariat maintains an APEC Tariff Databasewhich provides an on-line service forinformation on-line by line tariff rates, relatedcustoms information and links to membereconomies' tariff and trade statistics. A rangeof non-tariff barriers including quotas, importand export levies and licensing and exportsubsidies have also been removed orconverted into tariffs within the Asia-Pacificregion since APEC's inception. This hasresulted in reduced overall levels of protectionand increased transparency of trade regimes. The major challenges remaining for APEC inthis area are to continue to liberalize tariffsand non-tariff measures in line with the BogorGoals.

Trade in Services

There has been substantial growth in servicestrade among APEC member economies overthe past decade. A vibrant regional marketfor services has emerged due to the effortsof individual APEC economies to eliminatemarket access restrictions, extend nationaltreatment and MFN, pursue a process ofderegulation and de-bureaucratisation andenhance domestic capacity building. Someof this progress on services has been madelegally enforceable through commitments inthe GATS. However, further progress isneeded, including high quality services offersfrom APEC member economies in the WTODoha Round and substantial servicesliberalization through FTAs.

Investment

The APEC region has become much moreopen to foreign direct investment (FDI) dueto members' efforts to eliminate barriers andimprove measures for promoting investment.Administrative procedures includinginvestment screening have also beensimplified in a number of economies. TheAPEC Non-Binding Investment Principles(NBIP), adopted in 1994, has served as areference for APEC members to make theregion more open to foreign investment.However, progress in moving towards Bogordeadlines for investment has been uneven.Although 100 per cent foreign ownership ispermitted in many APEC economies for mosttypes of investment, caps on foreignownership in key sectors are common. Moreneeds to be accomplished, particularly inreducing restrictions on foreign ownershipin key sectors.

Trade and Investment Facilitation

More importantly, APEC has shown awillingness to tackle other significant non-border barriers to trade and investmentbeyond the formal WTO agenda as reflectedin the 2002 Trade Facilitation Action Plan(TFAP) for reducing the costs of trading andthe Santiago Initiative for Expanding Tradein APEC adopted in 2004. While work insome areas is at a more formative stage,collective action to promote paperless trading,transparency, business mobility, alignment ofstandards with international standards,improved competition and anti-corruptionpolicies and regulatory reform is now a featureof APEC's trade and investment facilitationwork program.

The Mid-Term Stocktake has identified anarray of APEC economies’ achievements inthe areas of trade and investmentliberalisation and facilitation. Guided by theBogor Goals, APEC economies have outpacedthe rest of the world over the last decade-and-a-half in opening their markets tointernational trade and investment, resulting

in higher than average economic growth inthe region.

More importantly, this growth hasaccompanied significant improvements ingovernance and social policy, resulting ingreatly improved health and welfare outcomesfor their citizens.

Trade andInvestment

Barriers haveFallen

6

20

10

01989

16.9%

2004

%

5.5%

Average Applied Tariff Rates ofAPEC Economies 1989-2004

APEC, which represents close to 50 per centof world trade and almost 60 per cent ofglobal GDP, has consistently lent its weightto pushing forward WTO negotiations. APECwas a significant force in bringing the UruguayRound negotiations to a conclusion, and hasplayed a similarly positive role in progressingthe Doha Round. Recent examples include:the APEC Ministerial Meetings and Leaders'Declaration in October 2003 which re-energised the Doha Round following thesetback at Cancun; the strong 2004 MinistersResponsible for Trade statement in the lead-up to the July package, including anagreement that trade facilitation be launchedas a negotiating item in the Doha Round;the 2004 APEC Ministerial Joint Statementidentifying three new information technologyproducts to forward to the WTO for

consideration and possible tariff eliminationin the context of a balanced outcome ofnegotiations; the 2005 intersessionalMinisterial statement on services; and thebreakthrough agreement of APEC MinistersResponsible for Trade in June 2005 endorsinga Swiss formula for tariff reductions on non-agricultural goods.

APEC's impressive record in dealing withtrade facilitation issues and tackling non-border barriers to trade and investmentbeyond the formal WTO agenda has resultedin elevating some of these issues into theglobal trade negotiations agenda. It has alsofostered ideas and programs for the WTOsuch as the Information TechnologyAgreement.

APEC hasStrengthened

the MultilateralTrading System

High-quality RTAs/FTAs

APEC has led the world in recognising anddeveloping the link between high-qualityRTAs/FTAs and the broader trade andinvestment liberalisation and facilitationagenda. APEC Leaders and Ministers haverepeatedly referred to the constructive rolethat RTAs/FTAs can play in contributing tothe Bogor Goals and accelerating the WTOprocess, while recognising the necessity forsuch agreements to be WTO consistent,comprehensive, transparent and truly trade-liberalising as described in the 2004 APECBest Practice for RTAs/FTAs. RTAs/FTAs canalso have a positive flow-on effect on tradeliberalisation by demonstrating theadvantages of opening markets. As more

APEC economies have sought to useRTAs/FTAs to liberalise their economies andpursue their development ambitions, APEChas accelerated its work in this area toencourage members to conc ludecomprehensive, high-quality agreements tomaximise their contribution to achieving theBogor Goals. Ministers and Leaders endorsedthe APEC Best Practice for RTAs/FTAs inNovember 2004 and work has commencedin 2005 on model measures for tradefacilitation in RTAs/FTAs. In addition, APECeconomies seek to promote high-quality FTAsthrough targeted programs of technicalassistance and capacity building.

APEC has also led the way in linking closelyeconomic and technical cooperation(ECOTECH) with trade and investmentliberalisation and facilitation. With a firmbelief that trade and investment liberalizationprogresses at a faster pace with capacitybuilding, APEC has played a constructivecapacity building role, helping to reducetechnological gaps between its members,foster sustainable development and achievegreater common prosperity. ECOTECHactivities have included fostering of humanresources and improvements in systemssupporting trade and investment flows withparticular emphasis on trade facilitation,technical collaboration, the digital economyand small and medium enterprises. Theyhave been funded collectively through theAPEC budget and unilaterally by economiesin a position to do so.

Trade and investment flows havegrown

Reductions in tariff, non-tariff and behind-the-border barriers have correlated directlywith increased trade and investment flowsin the APEC region. In dollar terms, intra-APEC trade in goods and services more thantripled between 1989 and 2003, and accountfor an ever-growing share of APEC economies'GDP (18.5 per cent in 2003, compared to13.8 per cent in 1989). Trade in services forthe APEC region as a whole more thandoubled over the same period. Trade betweenAPEC economies and the rest of the worldhas also strengthened, with exports morethan doubling since APEC was formed.

Economic andTechnical

Cooperation(ECOTECH)

7

Foreign investment flows have also increased,supplementing domestic savings andfacilitating transfer of technology, skills, andimproved production processes. Foreign DirectInvestment outflows from the APEC regionmore than doubled from 1989 to 2003, whileinflows increased more than five-fold to amaximum of $565 billion in 2000, beforefalling off considerably to a level still some50 per cent higher than in 1989. APEC

economies accounted for 28 per cent of worldFDI inflows and 42 per cent of FDI inwardstocks in 2003. Lower-income economieswere particular beneficiaries of foreign directinvestment, with inflows into these economiesremaining positive even during the Asianfinancial crisis.

Trade and investment policy hasgenerated economic growth

APEC economies have grown strongly sincethe inception of APEC, making up 61 percent of world growth from 1989 to 2003. By2003, APEC economies made up 57 per centof the world economy. Real GDP in the APECregion grew by 46 per cent between 1989and 2003, compared to 36 per cent for non-APEC economies over the same period.APEC’s lower income economies have grownparticularly strongly, with real GDP increasingby 77 per cent since APEC’s inception. Percapita GDP has increased at similarlyimpressive rates, growing by 26 per centbetween 1989 and 2003 (or about 1.7 percent per year) compared to 8 per cent for non-APEC economies. (see Figures 1 and 2).

Employment grew by 18 per cent in the APECregion between 1990 and 2002. Whileunemployment edged slightly higher over thisperiod, it remains at a particularly low levelgiven the negative impact of the Asian financialcrisis on employment in some APECeconomies. Unemployment in the APEC regionaveraged 4.3 per cent in 2003, compared tothe world average of 6.2 per cent.

International Openness

Commentators on international economicaffairs generally agree that the APEC regionis significantly more open to internationaltrade than the rest of the world. Improvementin this regard has been particularly notableamong APEC developing economies.

APEC economies’ impressive trade andinvestment liberalisation and facilitation gainsare largely a result of each individualeconomy’s policy choices. Economies havechosen to liberalise their trade and investmentregimes based on the potential gains of suchpolicy actions. However, APEC’s work has alsomade a significant contribution to this process.It has promoted multilateralism through itscommitment to open economies, and its effortshave helped set the agenda for WTOnegotiations and the promotion of regionalgoodwill and cooperation by providing a forumfor Leaders and Ministers to discuss key issuesand develop strategies to address them. Ithas also provided a forum for discussion andof commitment to the benefits of openmarkets.

8

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 20030

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

US$bn

Rest of WorldTotal APEC

Figure 1:APEC’s contribution to world GDP 1989-2003

Source: Open Economies Delivering to People (2005)

10000

8000

6000

4000

2000

0APEC Non-APEC

GD

P p

er p

erso

n (

US$

)

Per capita Real GDP

26%1989

2003

8%

25000

20000

15000

10000

5000

0APEC APEC

lower-income

GD

P (U

S$ b

illio

n)

Real GDP

46%1989

2003

77%

Figure 2: Real and per capita GDP growth 1989-2003

Non-APEC

36%

Chapter Three

Opportunities andChallenges Ahead

9

The Stocktake clearly demonstrates that APEChas played an active and supportive role insustainable economic development andgrowth in the region. All APEC economiesare making genuine efforts, individually andcollectively, to reduce impediments tointernational commerce, and are all makingreal progress towards the Bogor Goals. TheStocktake also concludes that the BogorGoals remain as relevant today as when firstagreed by APEC Leaders in 1994, even withina changing business environment. APECeconomies should use this opportunity torenew with vigour their joint commitment tothese Goals and the principle of openeconomies.

APEC economies should also recognise thatwhile the Goals remain valid, the trade and

investment policy landscape has changedconsiderably since the Bogor commitmentwas made. Today, the definition of free andopen trade and investment is much moreambitious and complex. More importantly,there is now broad acceptance that opennessis good for an economy. APEC developingeconomies have led the way in demonstratingto the broader international economiccommunity the benefits of outward-lookingsystems. Reducing tariff and non-tariff barriersand further improving market access remainpriorities for APEC. However, at the sametime, policy attention is increasingly shiftingbeyond border measures to behind-the-bordermarket conditions such as intellectual propertyrights, government procurement, competitionpolicy, good regulatory practice and anti-corruption.

Trade in services represents the fastestgrowing component of global trade, withsignificantly increasing contributions toindividual economies’ GDP, employment andinvestments and to the future growth anddevelopment of the Asia-Pacific region.Increasing globalization of production andregional economic integration will no doubtcontinue to expand the international tradeand investment policy agenda.

The ABAC list of features of the new

business environment illustrates clearly how

essential it is for APEC economies to accept

that new issues will continue to arise, and

that there will always be new challenges

ahead. The pursuit of free and open trade

and investment is demanding and requires

ongoing commitment.

Features of the new business environment:an ABAC view

In its contribution to the Mid-term Stocktake, the APEC Business AdvisoryCouncil identified a range of features associated with the new businessenvironment. These included:• Rapid global economic integration• Expansion of information technology• Spread of RTAs and FTAs• Diminished regional business confidence following the Asian financial

crisis• Changing demographics in certain APEC economies• Increased importance of trade in services and intellectual property• Growing importance of sustainable development in the region• Threats of regional and global crises, including the rise in terrorism,

epidemics such as SARS and bird flu and natural disasters such asearthquakes and tsunamis

• Increased volatility of energy prices and supply, which has a disruptiveeffect on APEC economies as a whole

One of APEC’s strengths is that it is a flexibleforum in which decisions are consensus-based and non-binding. APEC must remainfocused on its institutional strengths andcomparative advantage in promoting policydevelopment a imed at openness,transparency, and improved regulatorypractices.

From an organisational perspective, APECneeds to respond to the challenges of thenew business environment in a range ofdifferent ways. Member economies must bemore committed to implement APEC decisionsand these decisions must be supported bymore effective, targeted and demand-drivencapacity-building. The IAP process can befine-tuned to make it more efficient and

effective in helping economies monitorprogress towards the Bogor Goals.

APEC must also lift its performance as anorganisation through closer cooperation andprioritisation across fora. To assist APEC foraand sectoral ministerial processes to work incloser alignment with Leaders’ priorities andto improve the organisation’s strategic focus,APEC Senior Officials will provide moredirection to APEC’s work and in particular,apply greater attention to its oversight role.Strategies are currently being developed toensure APEC’s financial sustainability, enhanceAPEC’s efficiency and reinforce a culture ofongoing institutional improvement andreform.

A Consensus-based and

Non-bindingForum

10

As a region of global traders, with a largestake in the world trading system, APECplaces high priority on the effectivefunctioning of the WTO. Without a timely andpositive outcome to the Doha DevelopmentAgenda, regional aspirations for a freer tradeand investment environment will bechallenged.

Given its ability to make trade-offs acrosssectors, the WTO DDA negotiations representthe best channel for addressing many of

these complex issues at the present time.Reflecting this, it will be important for APECto continue to provide strong support for theWTO’s work. APEC, however, must also spareno effort to push for greater market opennessthrough its Individual Action Plans (IAPs) andCollective Action Plans (CAPs). So far, thesetwo vehicles have underpinned APEC’ssuccesses by sustaining a steady momentumof concerted unilateral and collective tradeliberalisation.

Supportingthe

MultilateralTrade

Negotiations

Achievement of the Bogor Goals and APEC’svision of a commonly prosperous region willrequire a renewed focus on APEC’s thirdpillar: ECOTECH and capacity building.

ECOTECH is the pursuit of APEC’s commonobjectives and goals through comprehensiveand effective economic and technicalcooperation. These activities are aimed atpromoting sustainable growth and equitable

development, while reducing economicdisparities among APEC economies.Recognising the central importance of thiscooperative capacity building effort, APECeconomies are committed to using anddeveloping skills and other resources fromall APEC economies through better focusedand, more targeted economic and technicalcooperation.

ECOTECHand Capacity

Building

As of 1 July 2005, at least 180 free-tradeagreements and regional trade agreements(RTAs/FTAs) have entered into force, 53 ofthem undertaken by APEC members. Animportant trade policy feature in all APECeconomies is their determination to liberalisetrade and investment through free-tradeagreements. Economies share the convictionthat for RTAs/FTAs to contribute to broadertrade liberalisation and progress towardsBogor they must be of high quality,

transparent and broadly consistent in theirrules. As a result, APEC members areencouraged to implement the APEC BestPractice for RTAs/FTAs by using it as ameaningful reference when undertakingRTAs/FTAs negotiations. APEC needs tocontinue to find ways to promote best practicein this area and to ensure that RTAs/FTAshelp lower the cost to business of tradinginternationally.

The Spreadof Free-tradeAgreements

Investment does not figure fully on the WTOagenda, but it is critically important toeconomic development and growth in theregion and will remain an essential part ofthe APEC agenda. APEC Ministers adopteda set of Non-Binding Investment Principlesin 1994. Since then, many APEC economies

have liberalised their policies on internationalinvestment, making them more consistentwith these Principles. In this regard, membereconomies are encouraged to furtherimplement the Principles aimed at increasedinvestment liberalization and facilitation.

StrengtheningAPEC’s Work

on Investment

11

The Trade Facilitation Action Plan (TFAP) andthe associated 5 per cent reduction in businesstransactions costs by 2006 is well on track.Individual APEC economies undertake theseactions and measures voluntarily. Thisobjective represents the beginning of whatmust be a sustained APEC effort to targetspecific impediments to regional commerce.This will include collective actions if we areto maximise business cost reductions andefficiency. It is therefore important to setsome objective criteria to assess progresswith the facilitation agenda. Managing andmonitoring progress towards such targetswould need to be supported by a morefocused approach to the Individual andCollective Action Plans as well as to the IAPpeer review process.

The Santiago Initiative also responded tocalls from business in relation to theimportance of trade facilitation, by callingfor further work to reduce transaction costsby cutting red tape, embracing automation,harmonizing standards and eliminatingunnecessary barriers to trade. Leaderscommitted to work together to advance thetrade facilitation negotiations in the WTO, topromote secure trade, and to build on theAPEC Best Practice for RTAs/FTAs in the areaof trade facilitation. APEC must respond ina decisive way to this call.

Against this background and in order toaccelerate progress towards the Bogor Goals,the following Busan Roadmap to Bogoris recommended for Ministers and Leadersendorsement. The Roadmap outlines keypriorities to reshape APEC work so that itcan better respond to the new businessenvironment and continue to drive free andopen trade and investment in the region.

TradeFacilitation

12

Chapter Four

Busan Roadmap tothe Bogor Goals

13

APEC’s Collective Action Plans will requireupdating to ensure they too reflect revisedpriorities and are suitably outcome-oriented.For example, the services CAP can bestrengthened by integrating a robust programof trade and investment liberalization, coupledwith a focused capacity building program, toensure widespread benefits particularly fordeveloping members.

IAPs must be more transparent and accessibleto business and the IAP Peer Review processneeds to be made more robust, forward-looking and policy relevant interaction as

well as to include a greater focus on whatAPEC members are doing individually andcollectively to implement specific APECcommitments and priorities. The reviewprocess also needs to address capacitybuilding strategies to assist individualeconomies in reaching APEC targets.

Consequently, the 2nd round of the IAP peerreviews will be conducted from 2007-2009under the strengthened review frameworkto effectively monitor the progress achievedby member economies towards the BogorGoals.

StrengtheningCollective and

IndividualActions

The Mid-term Stocktake of Progress towardsthe Bogor Goals has demonstrated that APECeconomies have contributed significantly tothe growth and prosperity in the Asia-Pacificregion by promoting free and open trade andinvestment. The Stocktake has alsodemonstrated that for APEC to remainrelevant, it must be prepared to evolve in adynamic and responsive way to today’s morecomplex and integrated business environmentand the changing trade and investment policylandscape. APEC must also encourageimplementat ion of dec is ions andcommitments taken in the APEC context,both individually and collectively, whilepreserving APEC’s core principles ofvoluntarism, comprehensiveness, andconsensus-based decision-making.

APEC will continue to support trade andinvestment liberalisation through multilateral,regional and bilateral trade arrangements. Itwill look for opportunities to undertake workon pressing issues, specifically in ways thatadd value to activities under way in otherfora. In addition, it sees significant benefit indevot ing inc reased a t ten t ion tocomprehensive business facilitation withparticular focus on behind-the-border issues.

APEC economies acknowledge the clear linkbetween security and prosperity and recallLeaders’ 1993 Blake Island vision of achievingstability, security and prosperity for ourpeoples. APEC members note thecommitments of its Leaders and Ministers totake all essential actions to dismantletransnational terrorist groups that threatenthe APEC economies; eliminate the severeand growing danger posed by the proliferationof weapons of mass destruction and theirmeans of delivery; and confront other directthreats to the security and economicprosperity of our region, be they health,natural disaster or energy-related. Stabilityand security are a necessary foundation forAPEC members to achieve the Bogor Goals.In this context, APEC’s human security agendahas been evolving in response to thechallenges posed to the regional economy.

APEC economies acknowledge that thedevelopment of effective policy responses inthe following areas is crucial to true free andopen trade and investment in the APECregion. Above all, APEC member economiesreaffirm their commitment to achieving theBogor Goals.

APEC is not a negotiating forum but rathera voluntary process of cooperation in supportof open and efficient markets. APECeconomies have made good progress ontrade liberalisation and recognise that furtherliberalisation is necessary to maximiseeconomic benefit. Accordingly, APEC reaffirmsits deep commitment to the multilateraltrading system and its support for the WTO.

The Doha Development Agenda (DDA) offersan immediate opportunity to bring all APECeconomies rapidly closer to achievement ofthe Bogor Goals. APEC has demonstratedwith good effect the value of bringingconcerted regional weight and critical massto the WTO negotiations. APEC economies

and their Geneva Caucus must redouble theircollective efforts to advance negotiations inall areas of the DDA.

APEC will make strategic interventions onaspects of negotiations where there isdeadlock.

Once the results of the DDA negotiations areknown, APEC members will need to considerwhat further liberalization and facilitationsteps may be needed in the WTO context tohelp reach the Bogor Goals. They will alsoneed to look at possible follow-up activitiesincluding capacity-building to support theimplementation of the DDA results.

Support forthe

MultilateralTradingSystem

14

APEC will also continue to contribute to tradeand investment liberalisation through thepursuit of high quality RTAs/FTAs. To helpmaximise the contribution of theseagreements to APEC-wide progress towardsthe Bogor Goals, APEC should develop amore comprehensive workplan on RTAs/FTAs.This program should include work indeveloping model measures for a wide rangeof RTA / FTA chapters to encourage a highquality and comprehensive approach to thedesign and content of these agreements.

In pursuit of high quality, transparency andbroad consistency in RTAs/FTAs, APEC willdevelop by 2008 comprehensive modelmeasures on as many commonly acceptedRTA/FTA chapters as possible by building onits work in developing model measures fortrade facilitation.

APEC also encourages ABAC’s participationin its work related to FTA developments inthe region.

Promotion ofHigh-Quality

RTAs/FTAs

The Stocktake has also made it clear that theagenda required to further drive growth inthe region is much broader than what wasenvisaged in 1994 and encapsulated in theBogor Goals. At that time, the major focuswas on tariffs and on a limited range of non-tariff measures. Accordingly, while APECmust ensure that the Bogor Goals areachieved, the APEC agenda should also berevitalised to keep pace with this new businessenvironment.

Issues like trade and investment facilitation,transparency and behind-the-borderregulations and administrative proceduresare now acknowledged as importantdeterminants of economic progress, becauseof their powerful impacts on the developmentof the private sector. Improving the businessenvironment amounts to facilitating tradeand investment, and at the same time, as akey strategy to alleviate poverty, furthersAPEC's economic and technical cooperationobjectives.

APEC must develop a comprehensive businessfacilitation program, with due considerationgiven to private sector development, buildingon the commitments made in the TradeFacilitation Action Plan (TFAP), the APEC

Transparency Standards, and the SantiagoInitiative, along with strategies that alsoaddress behind-the-border administrativeburden and impediments to trade andinvestment taking into account the diversityof member economies with respect toeconomic development and national policyobjectives. The program responds to ABAC'sconsistent calls for APEC economies tobecome more active in this area. Based onconsultations with ABAC and the businesscommunity in general, the program mustidentify specific priorities and targets in areaswhere substantial improvements in thebusiness environment are achievable andwhere APEC's current work can be betterfocused to respond to the needs of the privatesector and especially of SMEs. APEC willthen support the implementation of thesepriorities and targets through focused capacitybuilding programs. These areas may include,but are not limited to: customs procedures;standards and conformance; businessmobility; e-commerce; transparency; anti-corruption and corporate governance; foodcooperation; security in trade; intellectualproperty rights protection and enforcement;structural and regulatory reform; competitionpolicy and financial systems.

Busan BusinessAgenda

15

In this regard, APEC will:• Build on the 2001 Shanghai target which

is currently on track to be met by 2006,by further cutting transaction costs byanother five percent by 2010 andidentifying a list of collective actions thatall 21 APEC economies will take to facilitatetrade;

• Build on the APEC Anti-counterfeit andPiracy Initiative and model guidelines toreduce on-line piracy and trade incounterfeit and pirated goods withadditional measures to strengthen IPRprotection and enforcement in the region;

• Develop, in collaboration with the APECbusiness community, an expanded workprogram targeting increased investmentliberalization and facilitation;

• Continue to develop new areas of work incurtailing public and private corruptionthat build on the 2004 SantiagoCommitment and the APEC Course ofAction to Fight Corruption and EnsureTransparency, including the denial of safehaven, asset recovery and legal cooperationamong authorities in the region;

• Accelerate APEC's existing work plans thatare most relevant to business, includingSMEs in particular, specifically to addressissues of human resource and technology,business regulat ion and relatedadministrative procedures;

• Continue to combat threats to secure tradein the APEC region by measures includingincreased public private partnerships inthe implementation of the Secure Trade inthe APEC region (STAR) initiative and theprovision of capacity building assistanceto help members meet their STARcommitments; and

• Develop a fully integrated approach tostructural reform issues, with the aim ofpromoting greater market openness andcompetition and improving the resilienceof economies in the face of structuraladjustment and adverse shocks, therebylifting growth prospects.

Comprehensive and effective economic andtechnical cooperation (ECOTECH) amongAPEC member economies is fundamental tothe achievement of the Bogor Goals andhelps to promote sustainable growth in theAsia-Pacific region. Recognizing the centralimportance of this cooperative capacitybuilding effort, APEC economies commit tobetter focused and, more targeted economicand technical cooperation in order to developand utilize skills and other resources from allAPEC economies. To better serve its members,APEC's improved, systematic approach tocapacity building should be linked to APEC's

policy agenda. This system should includefeatures to:• Incorporate capacity building components

into the full range of APEC activities;• Tailor capacity building programs to

accommodate the specific needs of eachmember economy;

• Explore additional sources of technicalcapacity building;

• Assess outcomes of programs with thecooperation of the private sector;

• Ensure that successful public-privatepartnerships in capacity-building areestablished.

A StrategicApproach to

CapacityBuilding

APEC members must also continue toacknowledge the diversity in our economiesand the respective differences in domesticpolicy priority settings amongst our broadmembership. APEC economies remaincommitted to the concept of “pathfinder”

initiatives, recognising that it may not bepossible for all APEC economies to do thesame things at the same pace. The pathfinderapproach is a valuable tool in furthering tradeand investment liberalisation and facilitation.

The PathfinderApproach

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