THE OSAKA ACTION PLAN
ROADMAP TO REALISING THE APEC VISION

September 22, 1995

EXECUTIVE SUMMARY

In 1993, at their meeting on Blake Island, Asia Pacific Economic Cooperation (APEC) Economic Leaders provided the political impetus for developing initiatives which will move the Asia Pacific region towards a more integrated trade and investment environment. At their 1994 Bogor meeting, Economic Leaders adopted the goal of free and open trade and investment in the region by the year 2010 for industrialised economies and 2020 for developing economies. The stage has been set for action this year.

The Pacific Business Forum (PBF) has met three times this year and has agreed that the underlying theme of our 1995 report is making APEC more relevant to business. In 1994, the Leaders set the policy goals for stimulating the region's economic growth. This year we suggest 15 specific measures to generate concrete and pragmatic results. These measures will help achieve the Leaders' goal of increased economic growth, job creation, and enhanced prosperity for all. In addition, they will provide the business community with tangible evidence of APEC's ability to deliver.

Decisions made by the Leaders at Osaka on the speed and nature of implementation will be closely scrutinised by the business community. Initiatives taken must be action-oriented. To help advance the Leaders'goal of increased economic growth, the PBF has divided its 15 recommendations into three broad areas: 1) a roadmap to 2010/2020 with three components -- guiding principles, agreement on timelines, and regular progress reviews; 2) ten Osaka deliverables; and 3) two recommendations for business participation in APEC.

Finally, although this report has treated many subjects, the PBF realises that there are other important issues, such as energy and the environment, equally deserving of attention. These, along with issues such as the quantification of the economic impact of APEC's actions and possible youth participation in the APEC process, should be addressed by the PBF's proposed successor organisation, the APEC Business Council (ABC).

Roadmap to 2010/2020

A consensus on how to proceed from now until 2010/2020 must be achieved by the APEC Leaders this year. Implementation must begin immediately thereafter. There are three key components of the roadmap which should be incorporated into the action plan. These are: a set of guiding principles, timelines for every item of work on the action agenda which are critical to APEC's success, and, a procedure for regular progress reviews.

Recommendations

• Guiding Principles. APEC measures must adhere to the following 10 guiding principles: (1) WTO consistency; (2) comprehensive coverage, eventually including all sectors; (3) flexible consensus; (4) comparability, general equivalency among action plans of all member economies; (5) balance between collective and individual action; (6) open regionalism with a view to enhancing the multilateral trading system; (7) nondiscrimination; (8) transparency; (9) bench-marking upwards to achieve highest possible standards and procedures; and (10) regulatory reform to prevent administrative rules from becoming hidden forms of protection.

• Timelines. Clear and agreed timelines are critical components of the action agenda, thus the PBF has provided specific timelines -- with common starting dates -- for specific actions from now to 2020. The PBF has concentrated on actions during the first four years (1996-2000). Unless the groundwork is laid in those first four years, the APEC process could stagnate.

• Progress Reviews. There should be periodic reviews of all activities aimed at implementing the Bogor Declaration. The review mechanism should be three-track, consisting of the following: annual Ministerial reviews comparing implementation against commitments; independent reviews every two years by the permanent business sector advisory group; and, reviews by the Leaders concurrent with the advisory group reviews.

The Osaka Deliverables

For business to remain competitive it has to operate within short timeframes, as well as develop long-term plans. At Osaka, therefore, the Leaders must make decisions to achieve not only long-term goals but also short-term measures which are of immediate relevance to business. The PBF has identified ten areas where short-term outcomes are needed. They are:

(1) Progressing Beyond the Uruguay Round. This year at the Osaka meeting, the Leaders should bring concrete plans to progress beyond the Uruguay Round. These plans should include: (a) acceleration of commitments; (b) deepening of commitments; (c) broadening of commitments; (d) prevention of the abuse of anti-dumping; (e) renewal of commitments to a standstill; (f) continuation of work on post Uruguay Round issues; and (g) support of membership in the WTO for non-members.

(2) Investment Liberalisation. Investment liberalisation is of critical importance. Thus, at Osaka, APEC should announce its intention to strengthen the APEC Non-Binding Investment Principles by the 1996 meeting in the Philippines. The strengthened set of investment principles should be made legally enforceable and binding by incorporating them into the domestic laws of each economy, no later than the year 2000 for industralised economies and 2005 for developing economies.

(3) Business Travel and Business Residency Visas. The PBF urges the Leaders to establish visa-free business travel throughout the region by 1999 and, as an interim measure, introduce an APEC business visa by 1996. In addition, the PBF asks that business residency visas be approved within one month, starting in 1996.

(4) Customs Harmonisation. The PBF welcomes the substantial progress made by the Customs Subcommittee of the Committee on Trade and Investment (CTI), and urges APEC to implement that work in all areas no later than 2000.

(5) Standards and Conformance. The PBF welcomes the substantial progress made by the Standards and Conformance Subcommittee of the CTI, but believes that in key areas the work programme could be substantially expanded and accomplished over a shorter period of time.

(6) Intellectual Property Rights, Technology Transfer, and Science Cooperation. Protection of intellectual property rights (IPR) must remain a priority issue for APEC. The PBF thus recommends a series of steps which APEC can take to ensure adequate enforcement of existing IPR laws. APEC should formulate a set of principles for technology transfer, and a set of guidelines for strengthening APEC science cooperation.

(7) Trade and Investment Ombudsman. Each APEC economy should study the merits of the institution of the Trade and Investment Ombudsman and consider the desirability of adopting such an institution.

(8) Infrastructure Development. In order to meet the growing regional infrastructure needs in an efficient and cost-effective manner, the PBF recommends the establishment of an APEC Infrastructure Task Force (AITF) to review infrastructure development in APEC.

(9) Small and Medium Enterprises. Small and medium enterprises (SMEs) form the backbone of supporting industries upon which large companies, both local and foreign, depend. Last year, the PBF addressed the issue of access to capital for the SMEs. This year we focused on the development of basic policies, benchmark policies, and methods of nurturing the entrepreneurial spirit in SMEs. Ideas include: (a) the establishment of an APEC SME training centre, for example, the proposed Philippines' APEC Centre for Technology Exchange and Training for SMEs (ACTETSME); (b) the development of cooperatives where appropriate; (c) the establishment of business networks for the development of local supporting industries; and (d) and examples of programmes which provide funding for SMEs.

(10) Human Resource Development. The PBF wishes to stress the importance of developing the skills and abilities of the peoples of the Asia Pacific region. In particular, we recommend that APEC examine ways to implement worker training programmes, transfer of management skills and expertise, and the use of computers and telecommunication technologies.

Business Participation in APEC

APEC's goal should be to pave the way for "business to do business". Therefore it is important for APEC officials to obtain timely and sound inputs from the business community on how best to create a user-friendly business environment in the Asia Pacific region.

There are two main ways in which business input can be achieved to reflect the Leaders' 1994 goals: the establishment of an APEC Business Council (ABC) and business participation in the actual APEC work programme.

The PBF believes that the establishment of a permanent business advisory forum is key to a successful partnership between APEC and the business community. Therefore, the PBF has recommended the creation of the APEC Business Council (ABC), comprised of two members from each APEC member economy representing large, and small and medium enterprises, respectively. Members should be appointed by their Leaders to ensure that the ABC has direct access to the highest levels and that its advice is carefully considered.

Finally, the PBF encourages active and continuous participation by the business sector in the APEC working groups. Through such participation, the business community can help both to formulate policies relevant to business and translate those policies into meaningful results.

The Leaders' meeting in Osaka offers a crucial opportunity for APEC to convince the business community of its value and practical significance. It can do so by announcing measures which will make an immediate difference to businesses in the region. For its part, the PBF has provided a roadmap towards implementing such measures and stands ready to support the Leaders' Osaka action plan in realising the APEC vision.