US Dept of State - IIP: The United States and APEC

FACT SHEET: APEC ECONOMIC LEADERS MEETING (1998)
(APEC finance crisis strategy based on Clinton initiative)
Washington -- When the leaders of the 21 economies that make up the Asia-Pacific Economic Cooperation (APEC) forum met recently in Kuala Lumpur they embraced a comprehensive, detailed, broad-based strategy to overcome the financial crisis and urgently spur renewed and sustainable growth.
According to a fact sheet released by the Department of State, this strategy -- based largely on President Clinton's September 14 proposal before the Council on Foreign Relations -- emphasizes the necessity of individual economies implementing prudent, growth-oriented macroeconomic policies and cooperative efforts to strengthen financial institutions and markets, further liberalize trade and investment, and build the capacity of developing economies.
Following is the Department of State fact sheet:
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APEC ECONOMIC LEADERS MEETING (1998) -- OUTCOMES
Leaders embraced a comprehensive, detailed, broad-based strategy -- based largely on President Clinton's September 14 initiative -- to overcome the financial crisis and urgently spur renewed and sustainable growth. This strategy emphasizes the necessity of individual economies implementing prudent, growth-oriented macroeconomic policies and cooperative efforts to strengthen financial institutions and markets, further liberalize trade and investment, and build the capacity of developing economies. Leaders acknowledged the many positive steps taken by individual economies (such as the U.S. lowering of short-term interest rates) and launched additional concrete action plans and programs.

Finance Ministers will develop measures to help improve transparency and accountability in the international financial system, strengthen national financial systems and market infrastructure, and involve the private sector more effectively in the prevention and orderly resolution of international financial crises. Finance Ministers will report on implementation of this work and on their programs to improve economic and corporate governance and strengthen financial supervisory regimes to Leaders in September 1999.
Leaders acknowledged: Japan's commitment of substantial public resources to strengthen its financial system and stimulate growth; some economies' provision of additional resources to the IMF; G-7 support for a new contingent, precautionary line of credit anchored in the IMF; China's maintenance of the renminbi exchange rate, implementation of growth-oriented macroeconomic policies and pledge to continue reforms of its banking system and state-owned enterprises; and implementation of strong reform programs in developing economies, especially Thailand, the Philippines, and Korea.
The U.S. and Japan, with support from the ADB and IBRD, announced a multilateral initiative to help revitalize private sector growth by supporting economies' efforts to accelerate the pace of bank and corporate restructuring, mobilizing new private sector financing, and promoting the restoration of growth.
At Secretary Albright's initiative, APEC will work to develop a social framework for growth to help the most vulnerable to the hardships arising from the crisis. Additionally, the World Bank and the ADB have pledged to triple and double, respectively, their support for social sector programs.
Leaders called for examination of actions on strengthening domestic financial systems to withstand the potentially destabilizing impact of short-term flows (including hedge funds) and to ensure allocation of long-term capital to productive uses. The United States will lead this examination.
We succeeded in gaining APEC endorsement to move the tariff elements of EVSL into the WTO. APEC is challenging the world trading system to conclude this broad liberalization package in 1999. It will be important for all APEC economies, including Japan, to remain committed to successful conclusion of this package in the WTO. It was also agreed to begin implementing within APEC an ambitious work program on the non-tariff aspects of EVSL (e.g. NTMs, services, economic and technical cooperation).
At the initiative of Vice President Gore, PM Shipley agreed to look at how APEC can advance work on global climate change.
Leaders endorsed the recommendations of the Natural Gas Initiative and the vision of an integrated gas infrastructure for the region. The private sector is working on how to help governments take the policy steps necessary to bring this vision to reality.
Leaders pushed forward efforts to promote and facilitate the development of electronic commerce.
Leaders renewed their commitment to advance sustainable development throughout APEC's workplan including programs on sustainable cities, cleaner production, and protection of the marine environment.

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