Executive Summary
At their meeting in Osaka in November 1995, the APEC Economic Leaders agreed to appoint the members of the APEC Business Advisory Council (ABAC) to provide insights and counsel for their APEC activities. Having been appointed early this year, we respond to this call by providing this initial report. With this, we declare ABAC's commitment to be a constructive and active player in the attainment of APEC's vision. We commit ourselves to help the APEC Economic Leaders in their pursuit of free and open trade and investment, as well as economic and technical cooperation within our region.
To achieve this, we aim to generate specific, results-oriented recommendations to advance the APEC vision in ways most valuable to the region's business and to the wider APEC community. We also intend to assess beginning in 1997, from a business perspective, the progress being made in implementing the Osaka Action Agenda and the individual, collective and multilateral action plans that will emerge from the Manila and Subic meetings in November 1996.
In our inaugural year, we have examined five broad priority action areas which business considers critical to the momentum of the APEC process within the next few years. For each action area, we offer practical and achievable recommendations, which are outlined in this report. We submit these recommendations to the APEC Economic Leaders for their consideration at their November 1996 meeting in the Philippines.
Cross-border flows
Impediments to flows of people, goods, services, information and capital across borders directly affect business, although consumers bear the ultimate cost. We submit four flagship recommendations focused on movement towards a more productive "borderless" regional business community:
- Endorse the creation of an APEC Business Visa and the establishment of APEC Business Immigration Lanes in ports of entry to facilitate business-related travel.
- Endorse the establishment of an APEC Central Registry for Trademarks and Patents to promote investment and technology flows.
- Develop and commit to adopt a set of common professional standards for business-related service providers in the region, to be developed by appropriate professional accreditation bodies, and supported by any needed legislative measures.
- Adhere to 100% implementation of the Bogor trade and investment liberalization goals, with ABAC's continued aspirations to accelerate the process kept in view.
Finance and investment
We reiterate the business community's desire to see the scope and reach of the current APEC Non-Binding Investment Principles expand. We offer recommendations on evaluating progress and on the accelerated implementation of member economies' commitments under the General Agreement on Trade in Services and the Agreement on Trade-Related Investment Measures. We call for the development of a multilateral understanding on the avoidance of double taxation. In particular, we offer an interim recommendation:
- Establish APEC Voluntary Investment Projects (AVIP), under which economies can voluntarily apply a specific set of principles for enhanced investment protection to selected projects above and beyond the protection provided for in the Non-Binding Investment Principles.
Through the AVIP concept, projects accorded higher levels of investment protection can enjoy improved access to capital. We consider that the implementation of this proposal will lead to increased investment flows within the region and demonstrate the benefits of adopting principles that protect investment.
Infrastructure
Expanded public-private sector cooperation is needed to meet the region's urgent need to expand, coordinate and rationalize investment in major projects. Our flagship recommendation:
- Hold a series of Joint Public-Private Sector Infrastructure Roundtables in interested APEC economies to examine the infrastructure needs of the host economy, identify and recommend corrections to remove impediments to private sector involvement in developing new infrastructure, disseminate regional best practices, and establish productive linkages between entities from both sectors that are able to meet particular infrastructure needs.
Beyond this recommendation, we offer guidelines for ways in which host and investor governments and multilateral institutions can enhance their efforts to attract expanded private sector investment in the development of the region's infrastructure.
Small and medium enterprises and human resources development
We recognize the enormous importance of small and medium enterprises in economic development and in creating employment and wealth in the Asia-Pacific region. There is no path to national development that does not involve the small and medium enterprise. SMEs provide the largest volume of productive units and the majority of employment both domestically and regionally.
The Osaka Action Agenda calls on member economies to institute policies to maintain and develop SME dynamism. To do this, frameworks of operation favorable to SMEs must be introduced to enhance their capabilities. The business environment in which they operate can also be improved through appropriate policies such as, for example, the provision of favorable financial and fiscal support. We note the constraints facing the further development of SMEs, especially in such other areas as human resources development, access to markets, technology and information. In this regard, we ask the Economic Leaders to:
- Endorse the establishment by September 1997 of an APEC Network for SMEs, to function as a network of networks in each economy, linked electronically at the regional level through the APEC Center for Technology Exchange and Training for Small and Medium Enterprises (ACTETSME). It shall pursue an initial action program focusing on four key areas: human resources development, access to technology and information, access to credit and capital, and access to market opportunities. We also ask the Economic Leaders to direct appropriate government agencies to undertake actions in support of the program.
- Endorse the holding of initial Roundtables in each economy that bring together all relevant government agencies, banks, venture capital and other credit facilities or sources, associations, and SME representatives to address the growth and export financing needs of SMEs in concrete ways, with the recommendations from the Roundtable reinforced by government policy.
- Endorse the collection and reporting of data on SME statistical indicators by September 1997 to create a baseline from which targets for progress can be established.
Economic and technical cooperation
Economic and technical cooperation is vital to the building of a sense of community within APEC. The Economic Leaders have established this as one of the two parts of the Osaka Action Agenda alongside trade and investment liberalization and facilitation. In doing so, they have acknowledged that the development needs of APEC's diverse economies cannot be met by trade and investment alone.
To facilitate effective and strategic implementation of economic and technical cooperation efforts, we ask the Economic Leaders to:
- Launch APEC's new model of economic and technical cooperation based on strategic focus in line with the "essential elements" agreed to in the Osaka Action Agenda; partnership between government and business/private sector; and the establishment of a regional network for economic and technical cooperation.
In formulating each of these recommendations, ABAC has attempted to contribute to the major themes of this year's APEC activities: "APEC means business" and "Building the spirit of community." We urge our region's Economic Leaders to act by transforming their vision of APEC into concrete and measurable actions that will effect significant and tangible improvements in the business environment and benefit the community at large.