Status of the 1998 APEC Leaders CommitmentsFact sheet released by the Bureau of East Asian and Pacific AffairsU.S. Department of State, August 13, 1999 |
Financial Crisis
Commitment: Leaders in Kuala Lumpur committed to pursue a "cooperative growth strategy" that included growth-oriented macroeconomic policies, financial and corporate sector restructuring, expanded financial assistance from the international community strengthen social safety nets, support for efforts to build stronger financial systems, and a renewed commitment to the Bogor Goals of achieving free and open trade and investment within APEC.
Status: Economies' efforts to implement the above strategy in the wake of the Asian financial crisis have helped to restore investor confidence and bring stability back to much of the region, with measurable improvement in several of the hardest-hit economies. The major concern is that complacency and overconfidence will stop or slow reform efforts in the region, thereby derailing full recovery and diminishing prospects for sustainable economic growth. Finance Ministers in APEC have noted this danger and have urged that economies continue with structural economic reforms necessary for sustainable growth.
Trade Liberalization
Commitment: Leaders in Kuala Lumpur instructed Ministers to "implement the agreement reached" at their meeting regarding the nine priority sectors in Early Voluntary Sectoral Liberalization (EVSL) initiative. This agreement called for cooperative work to reach early agreement in the WTO on the tariff elements of the priority EVSL sectors by the time of the Seattle WTO Ministerial in November 1999. Leaders also instructed Ministers to "further advance work" on the remaining six lower-priority EVSL sectors.
Status: New Zealand, as Chair of the APEC process this year, has taken the lead in advancing EVSL in the WTO. Now called the Accelerated Tariff Liberalization (ATL) initiative for WTO purposes, the initiative is confronting resistance from the European Union, which is reluctant to pursue sector liberalization prior to the start of the anticipated new round of WTO negotiations. Senior officials in APEC continue to pursue work on the non-tariff elements -- identification of non-tariff barriers to trade, facilitation work, and economic and technical cooperation initiatives -- of the EVSL initiative within the APEC work program. APEC Trade Ministers at their meeting in June in Auckland also agreed to place the so-called "back six" EVSL sectors into the WTO process for further development in the context of the forthcoming round of WTO negotiations.
Social Safety Net Issues
Commitment: In their 1998 Kuala Lumpur Meeting, Leaders directed that "as a matter of high priority, APEC should intensify efforts to address the social impacts of the crisis" and "work with the World Bank, the ADB, the Inter-American Development Bank and, where appropriate, public and private institutions to formulate strategies of concrete actions aimed at strengthening social safety nets."
Status: Several programs have been initiated to meet those goals. The United States has established the APEC Virtual Task Force on the Social Impact of the Financial Crisis to exchange inventories and information on available technical assistance and social safety net programs through the Internet. The Finance Ministers' work program includes examining the social impact of the crisis and lessons learned to help build and strengthen social safety nets, as well as the institutional capacity to adjust programs flexibly in times of crisis. The World Bank will be providing a paper on principles and good practices in social policies at the September IMF and World Bank annual meetings, which will be relevant to APEC work. The U.S. has funded the Accelerating Economic Recovery in Asia (AERA) Program focusing on Thailand, Indonesia, and the Philippines. This program provides $35 million in FY1999 -- and $53 million in FY2000 -- to assist in the financial restructuring of corporations and banks; improve transparency and accountability in banks, businesses and governments; and establish more effective mechanisms to alleviate the social impact associated with economic adjustments.
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