Economics assignment: APEC
When the ?Asian-Pacific Economic Cooperation? (APEC) was established in 1989 in response to the
growing interdependence among Asia-Pacific economies, its goal was to advance Asia-Pacific economic
dynamism and sense of community. When the cooperation was established, there were 12 founding
member economies, namely Australia, Brunei Darussalam, Canada, Indonesia, Japan, Republic of Korea,
Malaysia, New Zealand, Republic of the Philippines, Singapore, Thailand and the United States. Since then
there has been more countries/economies joining APEC. APEC has come a long way since 1989. It has
built steadily on the efforts of the past and looks forward to further positive progress. The initial years of
APEC were focused largely on exchange of views and project based initiatives. As needs of the member
economies has evolved into a forum of higher purpose: to build the Asia-Pacific community through
achieving economic growth and development through trade and economic cooperation. In the Osaka
meeting in 1994, APEC leaders adopted the Osaka Action Agenda, which firmly established three pillars of
APEC activities: Trade and investment liberalization, business facilitation and economic-technical
cooperation. Its main objective is to develop a region-wide, free trade and investment regime by the year
2000. APEC operates by consensus. In 1991, members committed themselves to conducting their activities
and work programs on the basis of open dialogue with equal respect for the views of all participants.
The APEC chair, which rotates annually among members, is responsible for hosting the annual ministerial
meeting of foreign and economic ministers. At the 1989 Canberra Ministerial Meeting, it was agreed that it
would be appropriate that every alternative ministerial meeting be held in an ASEAN economy/country.
Senior Official Meeting (SOM) are held regularly prior to every ministerial meeting. APEC senior officials
make recommendations to the ministers and carry out their decisions. They oversee and coordinate, with
approval from Ministers, the budgets and work programs of the APEC for a.
Mr. Fischer, Deputy Prime Minister and Minister for Trade, said Australia’s IAP (Individual Action Plan)
would address the main trade liberalization issues of tariffs, non- tariffs, investment and services, although
the 1996 IAP would not pre-judge the outcomes of the existing and previously announced reviews into the
passenger motor vehicle, textile clothing and footwear and sugar sectors. Other elements of the IAP deal
wit the important trade facilitation issues such as standards and customs procedures, intellectual property
rights, competition policy, and mobility of business people and deregulation.
?Australia’s plan is fully consistent with the general principals of the Osaka Action Agenda agreed by that
leaders in November 1995, including comprehensives,? Mr. Fischer said. ?Australia’s done a great deal to
liberalize our market consistent with APEC goals, and we expect others to match our record. The
government will pursue vigorously Australian trade and investment priorities within APEC,? Mr. Fischer
Australia’s IAP address the objectives and guidelines of the Osaka Action Plan in a comprehensive manner:
Australia’s IAP includes reduction in applied tariffs to the year 2000.
Table: Tariff Reductions in the APEC region
Simple Average Applied Tariff
1988 1993 1997
Australia * 15.6 7.0 5.3
Brunei 3.9 3.9 2.0
Canada (*) 3.7 2.4 1.3^
Chile 19.9 11 11
China 39.5 37.5 17
Hong Kong 0 0 0
Indonesia 18.1 17 11.7
Japan * 4.3 3.4 4.6
Korea 19.2 11.6 7.9^
Malaysia 13.6 12.8 7.8^
Mexico * 10.5 12.6 9.8^
New Zealand 14.9 8.5 5.2
PNG NA NA 23^
Philippines 27.9 23.5 12.1
Singapore 0.3 0.4 0
Chinese Taipei 12.6 8.9 8.6
Thailand 31.2 37.8 17
United States (*) 4.2 4.2 3.4^
Note: Does not include calculation of non-ad valorum tariffs
? Indicates trade-weighted advantage
? ^1996 data
Australia’s applied simple tariff has fallen from 15.6% in 1998 to 6.1% in 1996 and will reduce further to
4.5% by the year 2000. Australia is also hoping to have tariffs reduced to zero in numerous sectors of our
economy by the year 2000.
Sectors Selected for Early Voluntary Sectoral Liberalism
Sector EVSL Proposal
Toys Progressive reduction to zero of tariffs on toys, preferably by 2000. Elimination of unjustified non-tariff barriers. Economic and technical cooperation
Gems and jewelry Elimination of trade-restrictive measures on these products (phased out by 2005), which include pearls, diamonds, silver, gold, platinum, jewelry, goldsmiths’ and silversmiths’ wares.
Environmental Goods and Services Elimination of tariffs by 2003 on environmental goods and liberalization of environmental services. Work on non-tariffs barriers. Economic and technical cooperation.
Food Further impetus to trade facilitation work on food. Studies on market prospects on sugar, processed food. Tariff liberalization by 2004 for fruit and vegetables, processed food and beverages.
Energy Removal of tariffs on coal, gas, electricity, and energy related equipment by 2004. Work on non-tariff measures, services, government procurement, and facilitation.
Fish/fish products Elimination of tariffs by the end of 2005. Elimination of non-tariff measures. Work on subsides, sanity and phytosantitary measures.
Forest products Elimination of tariffs on paper and wood products by 2000 and 2002 respectively. Work on non-tariff measures. Detailed provisions applying to building codes.
Oilseeds/oilseed Products Elimination of all tariffs, non-tariff barriers, exports subsidies, quotas and other trade-distorting measures by 2002.
Chemicals Tariff harmonization by 2001/2004 inline with the Chemicals Tariff Harmonization Agreement and eventual elimination of tariffs.
Telecommunications Development of Mutual Arrangement. Aims to allow parties to test and certify equipment to an importing economy’s mandatory technical requirements.
Rubber Reduction/elimination of tariff and phasing out of unjustifiable non-tariff measures.
Fertilizers Elimination of tariffs by 2002/2004. Work on non-tariff measures.
Automotive Products Private-public sector automotive dialogue. Harmonization of standards. Work on customs issues. Identify barriers to trade and investment.
Medical Equipment Tariffs on medical equipment and instruments to be eliminated by 2001. Work on non-tariff measures.
Civil Aircraft Elimination on tariffs on civil aircraft and related equipment by 200 and 2002 respectively. Trade facilitation.
Australia will abolish export controls and certain mineral products (coal, mineral sand liquefied natural gas,
bauxite and aluminum).
Australia is committed to further liberalize the business services, communication, transport, financial
services and energy sectors including to:
Telecommunications: Introduce full and open competition from 1 July and privatize 1/3 of
Telstra with 35% of the float available to foreign investors.
Transport: Windback maratime cabotage protection by year 2000 and discontinue schemes which
provide financial incentives for certain Australian vessels. In aviation, Australia will progressively
liberalize access to the market for freight and passengers and ensure airlines are free to set fares in
response to market conditions.
There are many other IAP’s in Australia’s list, however these were some of the main IAP’s.
Why is APEC important? APEC is taking on strategic significance internationally for a number of reasons:
? It acts as a forum between Asia and the Americans. The 18 countries of PAEC represent 56% of the world’s gross national product and 46% of all trade. Historically, contention between Japan and the United States over Asia cumulated in the outbreak of the Second World War in the pacific.
? APEC is gaining momentum as one of the world’s centers for trade and liberalization discussions.
? All three Chinas (Taiwan, Hong Kong and the people’s republic) are participants in APEC. The reversion of Hong Kong to China in 1997 is a historic change, which brought regional stability within APEC.
? Asian immigration to Canada has been increasing in recent years. The growing population of Asian descent in Canada, particularly in Vancouver, means heightened awareness and interest in Asian-Pacific affairs.
The international called APEC is a great force in today’s business. It is a thriving force, which will be
around for many years to come. The effectiveness of this organization is extremely great, as it will benefit
many people throughout the world, in all areas of business.