A BUSINESS BLUEPRINT FOR APEC:
STRATEGIES FOR GROWTH AND COMMON PROSPERITY

October 15, 1994

EXECUTIVE SUMMARY

The Economic Leaders of the Asia Pacific Economic Cooperation (APEC), at their Blake Island meeting in November 1993, asked business leaders to establish a Pacific Business Forum (PBF) to "identify issues APEC should address to facilitate regional trade and investment and encourage the further development of business networks throughout the region." The Pacific Business Forum has met three times since its establishment and agreed on the following vision and recommendations. These offer a blueprint for the direction of APEC in the 21st century towards a community where the removal of barriers to the free flow of goods, services and capital, without discrimination among APEC member economies, and the development of human resources, will lead to the ultimate goal of economic growth and common prosperity. Thus our underlying theme is rapid movement towards free trade and investment liberalisation in the region, based on APEC's cardinal principle of open regionalism.

The Vision

Our vision for the Asia Pacific region is one where dynamic growth will continue for decades in a manner that benefits all sectors in all member economies and contributes to an increase in the standard of living of all the peoples of the Asia Pacific region. In order to achieve this, the APEC business/private sector's needs are fourfold: further trade and investment liberalisation and deregulation; the facilitation of existing and future business; the development of business and human resources support mechanisms such as infrastructure and technology, information exchange, structural adjustment programmes, education and training and the strengthening of small and medium enterprises in the region; and a partnership between business and government. Along with the efforts to achieve regional growth, increasing incomes and job opportunities, the need to protect and improve the environment is equally important.

The increasing globalisation of business means that the APEC community must develop region-wide practices and policies to facilitate the free flow of goods, services and capital within the region. APEC member economies also must successfully compete for scarce investment dollars from outside the region with the emerging economies in the rest of the world. Thus, the harmonisation of policies and practices, and the establishment of region-wide standards are a necessary complement to trade and investment liberalisation. The implementation of such liberalisation must be GATT/WTO consistent.

Liberalisation of the economic and business environment needs to be structured so that all APEC member economies benefit from increased growth and sustainable development, leading to greater economic parity among member economies. To realise this, partnerships between the business sector and the APEC economies should be developed with corporate and governmental roles clearly defined and mutually accepted. APEC could take the lead role in developing and promoting these partnerships.

Finally, as APEC enters its sixth year, it must prove its value by making substantive and practical progress towards a predictable trade and investment environment in the Asia Pacific region. Businesses in the Asia Pacific region -- indeed the world -- are moving faster than the rules of international economic relations, and are bringing about an acceleration in market-induced movement towards free trade. As a result, businesses will not, and cannot, wait for governments. Businesses will go where bureaucracy is minimal and procedures straightforward and transparent. Therefore, APEC must achieve pragmatic results.

Recommendations

The Pacific Business Forum asks that APEC Leaders at their meeting in Bogor, Indonesia, endorse the following recommendations.

FREE TRADE AND INVESTMENT LIBERALISATION

-- APEC economies should achieve free trade and investment liberalisation in the region by the year 2002 for developed economies and no later than 2010 for all APEC economies. This goal should be adopted this year, 1994.

-- APEC Economic Leaders, as a matter of priority, should adopt immediately a policy of standstill on the introduction of new trade and investment barriers and incorporate the principles of a non-binding Asia Pacific Investment Code into domestic laws, where appropriate. The goal must be to adopt a binding investment code as soon as possible. The principles must include transparency, non-discrimination, national treatment, right of establishment, reporting requirements, investment incentives and dispute settlement.

-- APEC economies should implement the Uruguay Round commitments, accelerate the fulfilment of these commitments and undertake further market opening measures beyond those of the Uruguay Round. APEC Economic Leaders should support the wish of all APEC member economies to become members of the GATT/WTO.

BUSINESS FACILITATION

-- Transparency in administrative systems, rules and regulations should be a priority operating procedure for APEC member economies.

-- Adoption of a common APEC customs code should be an important goal. Customs processing should be accelerated through such measures as the simplification of documentation; the development of an electronic tariff database and the use of electronic documentation; the harmonisation of classifications; the establishment of a carnet system; and the establishment of education and training programmes for customs officers.

-- Visa requirements for intra-APEC business travel should be improved immediately through such measures as visa-free entry requirements for short stays; multiple-entry visas or "smart cards" with an expedited entry and exit facility for frequent business travellers; and work permits for temporary professional visits and for instructors and participants in overseas vocational training programmes.

-- Government practices and product standards that affect cross-border trade and investment should be harmonised. With respect to standards, mutual recognition agreements should be encouraged as an interim step towards full harmonisation.

-- APEC should examine ways of improving intellectual property protection in the region to foster the exchange of technology and information. Rapid implementation of the TRIPs agreement, encouraging all APEC members to adhere to the provisions of the Berne Convention, public education and awareness campaigns and effective enforcement of intellectual property laws are among the recommended actions.

-- APEC should examine existing government restrictions on technology transfer, with a view to eventually formulating a set of APEC-wide principles on technology transfer.

-- APEC should establish dispute settlement mechanisms within the APEC framework. These mechanisms could be used to settle intergovernmental and intercompany disputes.

-- The cost of capital in APEC member economies should be reduced through the further liberalisation and internationalisation of financial and capital markets in APEC economies; improving the regulatory environment of borrowing economies; improving and reinforcing the funding of international banks, as well as other development financing institutions; and examining the feasibility of establishing a new financial institution to increase the availability of long-term financing to the business sector in developing economies.

-- APEC economies should not engage in measures which would destabilise exchange rates, particularly between major currencies.

-- APEC should encourage the development of mechanisms to promote good business ethics and practices to eliminate corruption and anti-competitive practices.

HUMAN RESOURCES AND BUSINESS DEVELOPMENT POLICIES

-- APEC should continue to give priority to human resources development with business and the government sectors taking responsibility individually and jointly for training programmes such as entrepreneurial development programmes, manager exchange and development programmes, cultural exchanges, job retraining and so forth. APEC should encourage more intensive efforts in the regional transfer of skills technology and personnel.

-- With respect to cultural exchange programmes, the PBF recommends strengthening and expanding exchange, training and scholarship programmes.

-- APEC should emphasise the importance of small and medium enterprises (SMEs) and promote them in international markets through the provision of seed capital, tax incentives, start up schemes, improved access to finance, and enhancing their organisational and managerial capabilities. In this regard, special priority should be given to the development of local supporting industries and SME networking, including technological cooperation.

-- APEC should develop a comprehensive plan for region-wide infrastructure development which avoids the wasteful duplication of effort and includes a schedule of all major planned infrastructure projects. To this end, APEC should establish a joint public and business sector task force on region-wide infrastructure development. The group would assist in the preparation of the region-wide infrastructure development plan and articulate APEC's long-term vision for developing region-wide public and industrial infrastructure.

-- APEC should support the creation of regional and global communication networks with an open architecture, harmonised standards and system interoperability. This would allow technological advances to be incorporated quickly and efficiently into the global information superhighway. A meeting of ministers responsible for telecommunications policies should be convened in 1995 to address these issues.

-- APEC should encourage policies that promote structural adjustment and labour mobility in order to assist business owners and workers in declining industries to adapt their business activities and skills to changing economic conditions.

-- APEC should establish systematically best-practice benchmark models for key aspects of regional trade and investment.

GOVERNMENT/BUSINESS SECTOR PARTNERSHIP AND BUSINESS NETWORKING

-- APEC should improve the government/business sector partnership through the formation of joint committees on infrastructure development, information superhighways, SME development programmes, and human resources training programmes.

-- APEC should continue to encourage further privatisation efforts throughout the region, as they have enabled the business sector to play a more active and successful role in economic development and liberalisation.

-- APEC Economic Leaders should continue the dialogue with the business community and establish an APEC Business Advisory Forum, appointed by and reporting to them, to help achieve APEC's objectives. The Forum would complement, not replace, existing business organisations.

-- APEC should establish databanks which are accessible at low cost to a wide range of businesses to assist networking and the development of strategic alliances. APEC should also encourage the further development of region-wide business networking organisations.