Text: APEC Coordinator Boucher before House Panel August 3, 1999
(Calls for open markets and strengthened marketplaces)The leaders of the 21 Asia-Pacific Economic Cooperation (APEC) economies, when they meet in September in Auckland, must reaffirm that trade liberalization is an essential ingredient for long-term, sustainable growth, according to U.S. Coordinator for APEC Richard Boucher.
In testimony before the House International Relations Committee August 3, Boucher noted that APEC leaders will gather just prior to the World Trade Organization (WTO) Ministerial in Seattle. "This provides another opportunity for APEC to push forward the global trading system," Boucher said. "We will work for a strong endorsement of a new, broad-based but manageable round of WTO negotiations. We also want APEC to make progress on our goals for the WTO Ministerial, such as increasing transparency in government procurement, extending the standstill on electronic commerce duties, and achieving early results on APEC's accelerated tariff liberalization in a manner that will not undermine our other WTO goals, for instance in agriculture."
Boucher stressed, however, that opening markets is not enough. He called for measures to strengthen the marketplace -- "things APEC members can do within borders to take advantage of the work we do across borders" -- establishing policies and practices to attract foreign investment, developing safe and efficient capital markets, and eliminating regulatory barriers.
"It is work like promoting transparency and good governance, enhancing air services, modernizing customs procedures, spurring E-Commerce, setting up legal and regulatory systems that will attract investment to develop energy infrastructure," he said. "Our vision in APEC is not just to define best practices but to get them in place, to build the infrastructure, install clean production technologies, and train people for the challenges of the 21st century."
Boucher's testimony also focused on Y2K -- the millenium bug. "Y2K problems have the potential to retard the positive economic signs we are seeing in the region," he warned. "Solid contingency plans, including cross border contingencies, are critical to keep Y2K from shoving APEC economies back into negative growth. It will be important for Leaders to be able to give a meaningful and credible message on the region's readiness for January 1, 2000."
APEC members, he said, have been working on an approach that focuses on cross-border assessments of readiness. "All APEC members," Boucher said, "need to know as best we can where vulnerabilities lurk and develop contingency plans to remedy problems that occur."
Following is the text of Boucher's testimony, as prepared for delivery:
(begin text)
"U.S. Interests in the Asia-Pacific Economic Cooperation Forum"
Testimony of Ambassador Richard A. Boucher
U.S. Coordinator for APECBefore the House International Relations Committee
Tuesday, August 3, 1999
Mr. Chairman, thank you for the opportunity to address the House International Relations Committee on the important issue of U.S. involvement in APEC, the Asia-Pacific Economic Cooperation forum.
It is an understatement to say that the APEC region is important to U.S. interests. The region holds partners for us in key issues such as security, trade, and the environment to name only a few. And even though APEC is an economic forum, our active participation in it bolsters our ability to achieve our broader foreign policy goals.
For the United States, APEC is not an end in itself, but a means to advance a number of key objectives that incorporate our economic, political, and security interests. APEC helps anchor the United States in Asia. It reinforces multilateral and bilateral efforts to open markets. It provides high level interaction with countries like China, Japan, and those in Southeast Asia. It can help build safe and efficient capital markets. APEC helps ensure growth in Asia is environmentally sustainable. And APEC facilitates business, which creates opportunities for U.S. businesses and their products and services.
What we do in APEC is especially important to U.S. business. It is the energy of the private sector that drives the region, and in APEC we strive to make it easier for business to do business -- to seize opportunities. One of the stories of the Asia-Pacific region is opportunity. In the past decades the economies of this region, including ours, have created enormous opportunities for their people -- opportunities to trade, opportunities to start businesses, and opportunities to prosper. Through APEC, we are lowering barriers, opening markets, and creating further opportunities.
The broad term we use in APEC for our work is "economic cooperation." This is a much bigger concept than mere "economic liberalization," though liberalization is essential. I see twin missions for us in APEC - opening markets and strengthening the marketplace.
We open markets through trade liberalization and removing barriers to trade. I will defer to Ambassador Fisher regarding the specific trade aspects of our market opening agenda in APEC, but let me point to key examples. Looking back, in 1996 the 18 APEC Leaders representing nearly half the world's economic activity pressed for early conclusion in the WTO of an Information Technology Agreement to eliminate all tariffs on information technology hardware and software. This represented global trade of well over $500 billion.
Looking towards the September APEC meetings in Auckland, Leaders must reaffirm that liberalization is an essential ingredient for long-term, sustainable growth. APEC Leaders are gathering just prior to the WTO Ministerial in Seattle. This provides another opportunity for APEC to push forward the global trading system. We will work for a strong endorsement of a new, broad-based but manageable round of WTO negotiations. We also want APEC to make progress on our goals for the WTO Ministerial, such as increasing transparency in government procurement, extending the standstill on electronic commerce duties, and achieving early results on APEC's accelerated tariff liberalization in a manner that will not undermine our other WTO goals, for instance in agriculture.
But opening markets is not enough. We also need to strengthen the marketplace -- things APEC members can do within borders to take advantage of the work we do across borders. What I mean by this is work such as establishing policies and practices to attract foreign investment, developing safe and efficient capital markets, and eliminating regulatory barriers. It is work like promoting transparency and good governance, enhancing air services, modernizing customs procedures, spurring E-Commerce, setting up legal and regulatory systems that will attract investment to develop energy infrastructure, and so on. This kind of work can help businesses directly and quickly. This is where APEC members can take giant strides within their own economies to generate economic activity throughout the region.
Let me be clear, our vision in APEC is not just to define best practices but to get them in place, to build the infrastructure, install clean production technologies, and train people for the challenges of the 21st century. We are looking for focused outcomes and there are some success stories in the making -- thanks largely to the hard work of the U.S. private sector.
A U.S. private sector coalition has been developing an initiative on transparency to show how the right policies can re-attract foreign direct investment to the region. Transparency is a common thread running throughout much of APEC's work, including that of APEC Ministers, Finance Ministers, and the APEC Business Advisory Council. As APEC host, New Zealand has included transparency and good governance as an integral part of one of its key themes this year -- strengthening the functioning of markets. We fully support this emphasis and will strive to focus APEC on ways to increase transparency and improve governance.
Another example of a focused outcome we want to achieve centers on the Port of Shanghai. An alliance of U.S. companies, working with U.S. and Chinese customs services has targeted a series of regulatory and data management improvements they would like to implement by 2001, when China hosts the APEC Leaders Meeting in Shanghai. This project can be a graphic demonstration of the seamless nature of public/private partnership, advanced technology solutions, and skills training, while encouraging dramatic improvement in efficiency at one of Asia's busiest ports.
A final example of this kind of work has both commercial and environmental implications. The APEC Fisheries Working Group is taking a major step towards effective conservation and maintenance of the world's fish supply. The Group is collecting and sharing information on members' licensed high-seas fishing vessels. Knowing the quantity and type of these vessels is essential to define and address concretely the global problem of excess fishing capacity. At the same time, this also helps to identify ships that may be violating international conventions on fish conservation. The work of this group is especially effective since it involves most of the world's major fishing fleets, including Japan, Russia, China, and Chinese Taipei.
The regional financial crisis that dominated Leaders' discussions last year may be waning, but serious economic challenges remain, particularly in maintaining the pace of corporate and financial sector reform. The cooperative growth strategy endorsed by APEC Leaders at Kuala Lumpur has helped economies in the region make progress toward recovery, but the job is not finished. We need to gain Leaders' commitment to continue reforming and avoid complacency. Just as last year we succeeded in getting APEC economies pointed down the reform path, this year we need a renewed commitment from Leaders to continue the journey despite emerging signs of recovery.
Economies need to press ahead with efforts to restructure financial and corporate sectors, enhance transparency and disclosure standards, strengthen regulatory and supervisory capabilities, and mitigate the impact of financial crises on the poor. To build the foundations for sustainable growth, they need to work on developing capital markets, creating pension funds, and revitalizing infrastructure. APEC economies must cooperate to advance the global effort to reform the international financial architecture by enhancing the role of the international financial institutions, enhancing transparency and promoting best practices, strengthening financial regulation in industrial countries, strengthening macroeconomic policies and financial systems in emerging markets, improving crisis prevention and management, including through appropriate involvement of the private sector, and promoting policies to protect the poor and most vulnerable. All of these steps are essential to reduce the likelihood, scope, and severity of financial crises that may occur in the future.
A final part of our work in APEC this year I would like to emphasize is Y2K -- the millenium bug. Y2K problems have the potential to retard the positive economic signs we are seeing in the region. Solid contingency plans, including cross border contingencies, are critical to keep Y2K from shoving APEC economies back into negative growth. It will be important for Leaders to be able to give a meaningful and credible message on the region's readiness for January 1, 2000. We have been working on an approach that focuses on cross-border assessments of readiness. We, that is all APEC members, need to know as best we can where vulnerabilities lurk and develop contingency plans to remedy problems that occur. We also are focusing on a strategy to counter any possible overreaction that may occur.
Mr. Chairman, I thank you for your interest in how we are using APEC to create opportunities for U.S. businesses, to pursue more open trade and investment, and to strengthen our ties with key strategic partners in the region. I fully believe APEC has considerable potential and remains an organization in which the United States should be engaged at the highest levels. Our efficacy in APEC depends on the support of our private sector and that of Members of Congress. The levels of support I have seen so far in my short tenure encourage me, and I look forward to your support in the future.
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