SUMMARY OF RECOMMENDATIONS

Implementing the Bogor Declaration

A substantial "down payment" of decisive steps on individual components of the "action agenda" should be adopted at Osaka in November 1995. The momentum of Seattle and Bogor, and the credibility of the entire APEC initiative, will be difficult to sustain if Osaka limits itself to procedural agreements.

Accelerating the Uruguay Round Liberalization

The Bogor Declaration "decide(d) to accelerate the implementation of our Uruguay Round commitments..." We recommend that APEC member economies do so by:

Agreeing on a list of possible areas for acceleration from which individual APEC members would choose one or more (the "menu");

Implementing all such acceleration on a Most-Favored-Nation basis;

Reducing by half, wherever practicable, the transition periods for implementing trade liberalization and rule-making reforms that they have already committed to in the Uruguay Round (the "50 percent rule");

Industrialized economies should choose to:

-- shorten the remaining transition period for most of their tariff cuts from four years to two; and/or

-- accelerate implementation of their agreed reduction in agricultural subsidies from six years to three; and/or

-- increase by 50 percent the volume of imports covered in each of the succeeding stages of reform of the Multi-Fiber Arrangement; and/or

-- reduce their tariffs or their remaining nontariff barriers beyond levels that were agreed upon in the Uruguay Round.

Developing economies should choose to:

-- cut in half over five years the gap between their bound and currently applied tariff rates, with the bindings then lowered to the applied rates after ten years; and/or

-- cut in half the transition periods for most of the new intellectual property disciplines (from four years to two) and for patent protection for certain agricultural and pharmaceutical products (from nine years to four and one- half); and/or

-- cut in half the transition periods to eliminate prohibited trade-related investment measures (local content, trade-balancing and foreign exchange-balancing requirements) from five to two and one-half years; and/or

-- cut in half the phaseouts on export subsidies, from eight to five years on nonagricultural products and from five to two and one-half years for export subsidies granted contingent on sourcing of domestic goods.

Those APEC economies that are not now members of the World Trade Organization should become Contracting Parties as soon as possible.

A Dispute Mediation Service

We recommend the immediate creation of a voluntary APEC Dispute Mediation Service (DMS). It should:

Apply to all issues, thus ranging far beyond the dispute settlement mechanism in the World Trade Organization;

Emphasize mediation and conciliation rather than arbitration, in which the mediator tries to bring the parties together to arrive at their own settlement of the dispute or, failing that, offers his or her own proposals for a settlement;

Feature "shuttle diplomacy" by a mediator moving between the two sides in an effort to reconcile their differences and foster a settlement between them;

Be implemented by individual mediators chosen voluntarily by the APEC member economies that are parties to a dispute from a list originally nominated by each economy and maintained by the APEC Secretariat;

Enable third parties to make their views known at the outset of the process; and

Encompass a second stage through which, if mediation and conciliation fail, a special review panel would make an objective assessment of the dispute that would be released publicly if one or more of the parties failed to accept its proposals.

Broadening and Deepening the Uruguay Round Agreements

We recommend that APEC initiate a multifaceted approach to deal with abusive implementation of national antidumping policies by:

Enunciating a strong political commitment to address the problem;

Calling for antidumping policies to take account of the interests of all parties affected by an antidumping action, including consumers and industrial users of imports as well as import-competing firms;

Authorizing competition policy officials to challenge antidumping orders that seem likely to significantly reduce competition in their domestic market;

Discouraging frivolous antidumping actions by requiring complainants to post a forfeitable bond, related to the size of the alleged injury; and

Consideration in the study recommended below of whether reformed competition policy might provide a mechanism for pursing the legitimate goals of antidumping policy while avoiding its potential abuses.

We recommend that APEC undertake several initiatives to address the critical issue of competition policy through:

Immediate cooperation in the application of existing national competition policies, at a minimum through "positive comity" (whereby competition officials in one economy take into account the concerns of foreign competition officials over possible anticompetitive behavior in their economy) and preferably through joint antitrust enforcement;

Seeking to reduce unproductive differences in the competition policies of member economies over the longer run; and

Launching a major study aimed at identifying differences in competition law and policy among the member economies and why these differences exist, in an effort to provide a foundation for such a harmonization effort.

We recommend that APEC implement a multifaceted program to facilitate trade through wider product standards and testing procedures, aimed at enhancement of the principle "tested once, accepted everywhere in APEC":

Assignment to private business/industry of primary responsibility for standards harmonization where they believe such harmonization is necessary;

Achieving APEC-wide Mutual Recognition Agreements (MRAs) on acceptance of test data and product certification in major regulated sectors;

Creation of an Asia Pacific Technology Fund to enable all APEC members to participate effectively in the MRAs via modernization of testing laboratories and training of standards experts;

Acceleration of the implementation of the Technical Barriers to Trade Agreement from the Uruguay Round;

Alignment of all new APEC regulatory standards with international standards; and

Establishment of a Standards Expert Group to study and report on the elimination of technical barriers to trade in the region.

Private Investment

We recommend that APEC strengthen and apply the nonbinding investment principles (NBIP) agreed in 1994:

The principles relating to transfer of funds, capital movements, national treatment (including right of establishment), performance requirements and investment incentives need to be strengthened;

This should be done initially by unilateral actions by individual member economies, strengthening the principles and applying them in their national economies;

The NBIP themselves should then be improved at the earliest possible date; and

The NBIP should then be converted into a "voluntary code," where adoption of the entire code remains voluntary, but the principles are binding once a member economy decides to adopt it, and ultimately into a binding agreement.

Toward Open Subregionalism

We recommend that subregional trading arrangements (SRTAs) within APEC should accelerate their liberalization and forge linkages among themselves only on the basis of the following principles:

Full consistency of their plans with the WTO, i.e., including "substantially all" trade in goods and "substantial sectoral coverage" of services, setting a target date for completing the process, and avoiding any new barriers to nonmembers;

Prompt submission of these plans to the WTO for approval, and for monitoring, by both the Trade Policy Review Mechanism of the WTO and by APEC itself;

Extension of their liberalization to other APEC members on the same nonmutually exclusive, four-part formula previously proposed by the EPG for the extension of APEC liberalization itself to nonmembers of the broader grouping:

-- implementation via unilateral (and hence MFN) liberalization to the maximum possible extent;

-- declaration of the SRTA members' intention to continue reducing barriers to other APEC members as well as to their SRTA partners;

-- an offer to extend their new liberalization to other APEC members on a reciprocal basis; and

-- recognition that any individual SRTA member could extend its SRTA liberalization, on a unilateral basis, conditionally to other APEC members or unconditionally to all members of the WTO (including other APEC economies).

APEC economies should refrain from new SRTA actions if they are unable to proceed on the basis of these principles.

Members of APEC and of the Free Trade Area of the Americas (FTAA), especially countries that are members of both, should also:

-- avoid adopting any provisions, such as restrictive rules of origin, that could create new difficulties for trade between the regions;

-- work, perhaps together, toward further global trade liberalization in the WTO inter alia to reduce the newly created margins of preference against each other; and

-- over time, contemplate elimination of those margins of preference ��preferably through the achievement of global free trade but through other means if necessary.

Monetary and Macroeconomic Cooperation

We recommend that APEC endorse the new programs proposed at the International Monetary Fund to help prevent, and when necessary respond to, financial crises of the type that hit Mexico in late 1994 - early 1995:

Full and timely reporting by all IMF members of standard sets of data, to increase transparency and thereby enable the private financial markets to perform more effectively;

Conveyance of sharper and franker IMF advice to countries that appear to be avoiding necessary adjustment actions; and

Financial contributions by economies with the requisite capability to enable the General Arrangements to Borrow to fund the new Emergency Financing Mechanism at the IMF.

In addition, APEC economies themselves should submit the data sets that the IMF will seek from its members. Moreover, those APEC economies that are in a position to do so should make contributions to the new Emergency Financing Mechanism, and be provided with a corresponding increase in their participation in the decision-making process on use of the funds and on international monetary issues more broadly.

Development and Technical Cooperation

We recommend that APEC launch a four-point Action Plan in the Osaka "down payment" to kick off the process of development and technical cooperation:

Adoption of a set of Governing Principles of APEC Development Cooperation;

Application of the Principles to, and embarkation upon, an APEC Technical Cooperation Initiative that formulates a Technical Cooperation Framework and establishes voluntary National APEC Technical Cooperation Funds;

Liberalization of APEC's development and technical cooperation decision-making; and

Placing an APEC Infrastructure 2020 (INFRA 2020) Program on priority status and immediately undertaking an APEC-wide infrastructure benchmarking program.

We also recommend that APEC give impetus to the unrestricted flow of technology economies and work out nonbinding principles to that effect.