CHRISTOPHER: 'THREE C'S' KEY TO SUCCESSFUL APEC ACTION AGENDA
(Text: U.S. statement at the Seventh APEC Ministerial) (3170)

Osaka, Japan -- If the new APEC Action Agenda is to be successful in implementing last year's pledge achieve free and open trade in the Asia-Pacific region by 2020, it will require close adherence to three guiding concepts that Secretary of State Warren Christopher referred to as the "three C's" -- comprehensiveness, comparability, and consultation.

In a prepared statement for the seventh ministerial meeting of the Asia-Pacific Economic Cooperation forum November 16, Christopher described the concepts.

"First, comprehensive coverage. We must maintain our leaders' commitment to liberalize all sectors of our economies by the 2010/2020 deadline. The growing integration of our economies means that when one member protects even one sector, many members suffer lost economic opportunities as a result," he said.

"Given the diversity of our economies, it is appropriate that we have some flexibility in the pace and sequencing of our actions," Christopher said. "We will liberalize gradually because the Bogor Declaration gives us time to adjust before open trade is fully realized. But we must include all sectors in the Osaka Action Agenda. Failure to do so would risk unraveling the core of our Bogor commitment and undermining APEC's credibility and influence as a force for global liberalization."

Moving on to comparability, Christopher said: "As we liberalize our economies, we must ensure a comparable level of opportunities and benefits for the peoples of all the APEC member economies. We do not have to take identical steps, but the steps we take should produce comparable results. Each of us can take difficult steps if all of us are taking difficult steps."

Finally, in the area of consultation, the secretary of state maintained that to ensure comparability, APEC member economies must engage in a continuing process of consultation. "Consultation will help keep the process of liberalization moving forward," he said. "We all need to meet face-to-face to review where we stand in our liberalizing efforts and to see where we are going."

Christopher also mentioned what he called the "fourth C" -- cooperation. "Since its inception in 1989, APEC has made a tangible contribution to the development of each of our economies. Beyond the liberalization and facilitation of trade, APEC must broaden its efforts under the second part of our Action Agenda to promote economic and technical cooperation. Whether in human resources, science and technology, or infrastructure, we must continue to spur development by harnessing the diversity of experience and outlook that is one of APEC's greatest strengths," he said.

One specific area of the Action Agenda Christopher focused on because of its critical importance to business concerned plans for liberalization and transparency in government procurement markets. "Most of the monumental volume of infrastructure projects in developing APEC economies, already equaling about $200 billion a year, is government-generated. The Action Agenda includes a guideline that calls upon each APEC economy to 'enhance the transparency of its government procurement regimes and its government procurement information.' Member economies will 'develop, by 2000, a set of non-binding principles on government procurement' among other collective actions in this area," Christopher said.

"Next year in Manila, we should agree to accelerate the adoption of these principles" he said. "The entire region shares an overriding stake in ensuring that our government procurement practices meet world- class standards. Our economies share a stake in the most efficient use of scarce capital -- and in meeting infrastructure needs through the best technology and service the private sector can offer. Our companies share a stake in bidding practices that reward low cost and high quality -- and in business environments that are equitable and predictable. And our peoples share a stake in the wise use of their resources -- and in public institutions that foster respect for the rule of law."

Following is the text of Christopher's statement, as prepared for delivery:

(begin text)

U.S. DEPARTMENT OF STATE Office of the Spokesman

(Osaka, Japan)

November 16, 1995

ASIA PACIFIC ECONOMIC COOPERATION MINISTERIAL INTERVENTION BY SECRETARY OF STATE WARREN CHRISTOPHER

New Otani Hotel Osaka, Japan

Minister Kono, Minister Hashimoto, Excellencies, colleagues and friends: It is a pleasure to join you at this year's ministerial meeting of the Asia Pacific Economic Cooperation forum. Let me take this opportunity to express my deep appreciation to our Japanese hosts. Prime Minister Murayama, Minister Kono, Minister Hashimoto, and their colleagues have worked hard to make our meetings in Osaka a success.

After six years of progress and vision, APEC now faces a crucial seventh year of decision. As the guiding force for economic growth and integration in the world's most dynamic region, APEC must not only sustain the momentum it has achieved over the last two years. It must begin to take concrete and far- reaching actions to open up trade and investment in the Asia Pacific region. If APEC is truly to make history, it must produce results.

The American people in particular have a great stake in APEC's success. APEC's members include our three largest bilateral trading partners -- Canada, Japan, and Mexico. More than two and a half million jobs depend on our exports to APEC members in East Asia alone. Four out of the ten economies that the United States has identified as vital Big Emerging Markets belong to APEC.

The breathtaking transformation of the Asia-Pacific region over the past half-century testifies to its remarkable economic growth. Previously underdeveloped societies have become modern nation-states offering broad opportunities to their people. The Pacific Rim has become the free market's newest frontier. Within the span of one generation, bicycles and sampans have given way to subways and supertankers as Asian economies have converted themselves into economic dynamos. Thirty years ago, Asia accounted for only four percent of the world's economy; today it accounts for 25 percent.

This growth is transforming the vast Pacific, turning the seas and skies that once divided us into channels for commerce and cooperation. More than 40 percent of U.S. trade is with Asia. Trade within APEC now accounts for almost 70 percent of the trade totals of its member economies. And investment among them continues to grow. American firms are helping to construct airports in Malaysia. Indonesian companies are putting up hotels in Vietnam. Korean companies are manufacturing computer components in the United States. Australian engineering firms are paving roads in Indonesia. And a Singaporean brewery is bottling beer in Cambodia.

The dramatic growth and integration of the Asia-Pacific region that I have seen in cities like Kuala Lumpur and Jakarta is not an accident, but a reflection of the energy and vision of its diverse peoples. It is that energy and vision that must continue to inspire APEC's efforts.

When the ministers of APEC's original 12 members met in Canberra in 1989, they recognized that the best way to sustain our region's dynamism was to ensure that our economies grew together. In a rapidly developing region where skyscrapers were going up next to rice paddies, that meant cooperating to address shared practical challenges like breaking transportation bottlenecks, harmonizing technical standards, and easing strains on the environment. By expanding trade and investment among our economies, APEC's members would help create jobs and opportunity on both sides of the Pacific. By establishing stronger ties among our nations, they would promote regional stability.

When President Clinton took office, he understood that the security and prosperity of the United States in the coming century depends in large part on the prosperity and stability of the Asia-Pacific region. He recognized APEC's potential both to spur trade and investment and to lay the basis for what he called "a community of shared interests, shared goals, and a shared commitment to mutually beneficial cooperation."

That is why President Clinton took the initiative two years ago to invite APEC Leaders to Seattle. There, at Blake Island, the leaders recognized "an opportunity to build a new foundation for the Asia-Pacific that harnesses the energy of our diverse economies, strengthens cooperation, and promotes prosperity."

Last year in Bogor, with the leadership of President Soeharto, the leaders gave life to the vision of Blake Island by issuing the historic Bogor Declaration that calls for free and open trade in the Asia Pacific region by the year 2020. They set that ambitious goal because they agreed that a joint commitment to liberalization is the best way to accelerate growth and development in each of our economies.

Now, these declarations must be translated into actions. As the Chinese saying goes, "words must count and deeds must yield results." At this ministerial and Leader's Meeting, APEC must undertake the hard work of moving from a vision to a practical blueprint for action. We are charged with devising an Action Agenda that takes concrete steps to promote growth and reduce economic disparities.

The proposed Action Agenda before us sets forth 15 specific, practical areas where we can make immediate progress toward creating a common business environment in a giant market of 2.1 billion people. This nuts-and-bolts work might seem to lack the drama and novelty of our earlier meetings. But while it may not make for big headlines, it does make for bigger bottom lines.

For example, different product standards, technical specifications, inspection requirements and performance tests are in force across the region. The Action Agenda calls on us to begin taking steps to align them with international standards. Bottom line: By doing so, we can break down trade barriers and cut costs for business. The Action Agenda also calls for us to simplify and harmonize customs standards. Bottom line: Our businesses will find it faster and cheaper to import and export if all our member economies meet our commitment to follow the Kyoto Convention by 1998.

In addition to taking these and the other concrete steps provided for in the Action Agenda, we expect that our leaders will commit to a series of early actions that demonstrate their determination to achieve free trade and investment. Such "downpayments" will help build the momentum we need to meet the commitment we made in the Bogor Declaration. The first and most important down payment for the United States is to implement the Uruguay Round fully, promptly and, in some areas, at a higher level of discipline than required by the agreement.

Implementing the liberalization elements of the Action Agenda successfully will require close adherence to three guiding concepts that I call the "three C's" -- comprehensiveness, comparability, and consultation:

First, comprehensive coverage. We must maintain our leaders' commitment to liberalize all sectors of our economies by the 2010/2020 deadline. The growing integration of our economies means that when one member protects even one sector, many members suffer lost economic opportunities as a result.

Given the diversity of our economies, it is appropriate that we have some flexibility in the pace and sequencing of our actions. We will liberalize gradually because the Bogor Declaration gives us time to adjust before open trade is fully realized. But we must include all sectors in the Osaka Action Agenda. Failure to do so would risk unraveling the core of our Bogor commitment and undermining APEC's credibility and influence as a force for global liberalization.

Second, comparability. As we liberalize our economies, we must ensure a comparable level of opportunities and benefits for the peoples of all the APEC member economies. We do not have to take identical steps, but the steps we take should produce comparable results. Each of us can take difficult steps if all of us are taking difficult steps.

Third, consultation. To ensure comparability, we must engage in a continuing process of consultation. Consultation will help keep the process of liberalization moving forward. We all need to meet face-to-face to review where we stand in our liberalizing efforts and to see where we are going.

While these "three C's" should guide the first part of our Action Agenda, we must not forget the "fourth C" -- cooperation. Since its inception in 1989, APEC has made a tangible contribution to the development of each of our economies. Beyond the liberalization and facilitation of trade, APEC must broaden its efforts under the second part of our Action Agenda to promote economic and technical cooperation. Whether in human resources, science and technology, or infrastructure, we must continue to spur development by harnessing the diversity of experience and outlook that is one of APEC's greatest strengths.

Last year, I introduced three initiatives consistent with the priorities for cooperation that President Soeharto had identified in his capacity as chairman. Let me briefly review their status:

I am pleased to announce that the APEC Education Foundation that I proposed year has now been incorporated. The Foundation will support research, scholarship, and academic exchange activities among our economies. It will also strengthen cooperation among the APEC Study Centers that are the key component of the Leaders Education Initiative proposed by the United States at Blake Island. These human links are essential not just to economic development but to building a Pacific community of shared values and interests. I look forward to the formation of a Board of Governors and Advisory Council that fully reflect our region's excellence in education and scholarship, and I hope that the Foundation will begin making grants next year.

I also proposed a meeting of transport ministers to address our massive infrastructure needs. Without safe and efficient harbors, airports, railroads and highways, the Asia-Pacific is in danger of having its vital arteries of commerce blocked off or choked by bottlenecks and dead ends. My colleague Secretary Pena will review the outcome of the ministerial he hosted last June in Washington. I am pleased that we were able to encourage competition in the transport sector, examine ways to improve our facilities, and bolster our cooperation and training in critical areas such as safety and security.

Finally, I proposed at last year's ministerial that APEC members agree to transform the ad hoc Pacific Business Forum into a permanent APEC Business Advisory Committee. The United States believes that this initiative will strengthen private sector participation in the working groups and provide APEC with invaluable advice on our efforts to expand trade and investment. I am glad that the Action Agenda takes this important step, and I look forward to working with the Committee to ensure that its voice is heard.

After all, the real test of APEC's success will be whether its work has practical relevance to the business community. The private sector remains the catalyst of this region's dynamism. That is why APEC's job is to remove impediments that unnecessarily restrict business activity. Just as the Boeing Company's computer network enables engineers in America and Japan to work at the same time on the same design, APEC should permit our businesses to function effectively across a dozen time zones and languages. We can only achieve that goal by considering business views closely.

The Action Agenda addresses another area of critical importance to business -- liberalization and transparency in government procurement markets. Most of the monumental volume of infrastructure projects in developing APEC economies, already equaling about $200 billion a year, is government- generated. The Action Agenda includes a guideline that calls upon each APEC economy to "enhance the transparency of its government procurement regimes and its government procurement information." Member economies will "develop, by 2000, a set of non-binding principles on government procurement" among other collective actions in this area.

Next year in Manila, we should agree to accelerate the adoption of these principles. Their adoption at the earliest possible date will be an important step in guiding the efforts of member economies to achieve the greatest possible transparency in government procurement. As in so many other areas of focus for APEC, improvements in any member economy ultimately benefit every member economy.

The adoption of APEC principles on government procurement can make an even greater practical impact if we intensify our efforts. I believe that a working group should identify the highest standards and best practices already in effect across the region and report back to us next year in Manila. As we work to strengthen national laws and regulations addressing government procurement, APEC members could draw on specific practices in areas such as timely public notice of procurement opportunities, use and articulation of objective criteria for awarding contracts, and a mechanism for unsuccessful bidders to appeal to an administrative entity other than the awarding agency.

The entire region shares an overriding stake in ensuring that our government procurement practices meet world-class standards. Our economies share a stake in the most efficient use of scarce capital -- and in meeting infrastructure needs through the best technology and service the private sector can offer. Our companies share a stake in bidding practices that reward low cost and high quality -- and in business environments that are equitable and predictable. And our peoples share a stake in the wise use of their resources -- and in public institutions that foster respect for the rule of law. I look forward to working with my colleagues to strengthen APEC's commitment to transparency over the next year.

Our officials have worked hard over the past twelve months to forge a consensus document that reflects our economic diversity and, more importantly, reinforces our shared commitment. I believe our Senior Officials have found the right balance between a flexible, yet credible approach for achieving our trade and investment liberalization and economic cooperation objectives. I commend warmly the spirit of compromise, cooperation and common purpose that has characterized their efforts and that has produced the draft that we will finalize today. With this spirit, APEC promises to mature as a force for growth and prosperity across the region, and for trade liberalization around the world.

As ministers, we face a great responsibility to our leaders in setting out an Action Agenda that meets the terms of their Bogor Declaration. But as we carry out our core commitments to liberalize trade and investment, we should keep in sight the broader vision of a Pacific community that first brought our leaders together. The Action Agenda we devise in Osaka represents the focus of our efforts, but it should not limit our horizons. We must be willing to explore new areas where APEC's spirit of cooperation can promote the prosperity and development of our diverse peoples.

The Asia Pacific encompasses the oldest of civilizations and the newest of nations. Its peoples embrace all creeds and colors. And its economies span from subsistence agriculture to advanced aerospace. But where some have seen a clash of cultures, APEC increasingly embodies a unity of interests. The Action Agenda that we devise here in Osaka will guide our economies to achieve our common goal of free trade and investment by the year 2020. Fulfillment of that common goal will bring us ever closer to achieving our shared Asia-Pacific destiny.

Thank you very much.

(end text)

NNNN