APEC ECONOMIC TRENDS AND ISSUES (ETI)

MISSION STATEMENT

1. Introduction

At the Fourth APEC Ministerial Meeting held September 1992 in Bangkok, Ministers instructed Senior Officials to "consider the next steps for the ETI Ad Hoc Group, in particular ways in which a dialogue on economic trends and issues could contribute to future Ministerial dialogue and provide a broader context for APEC Work Projects and other activities."

This paper recommended a set of objectives and a process for ETI that responds to the above request. It starts from the premise that ETI is at an evolutionary stage and will have to adapt over time to both the needs and interests of its members and to developments in the broader APEC structure. The approach is to propose a direction that will engage a productive dialogue that will examine possible areas of economic cooperation without extending into the realm of economic policy co-ordination.

2. Objectives

The originality and strength of the ETI dialogue rests in the fact that it is conducted among representatives from economies at various levels of development that each have an important stake in the Asia Pacific region. ETI is also the only regional economic forum feeding into a Ministerial process, which it does through the SOM.

The sharing of experiences on how regional economies face and react to common challenges is the basis of the economic dialogue within ETI. The ETI is not a forum for criticizing national economic policies, providing policy prescriptions to individual economies, or attempting macroeconomic policy co-ordination.

The broad objectives of ETI are two-fold.

o First, ETI is a forum that can help develop and enhance contacts among economic policy advisors in the region. Specifically, ETI can:

-- provide a window for open dialogue on economic trends and issues in the Asia Pacific region;

-- foster better mutual awareness of economic circumstances and policies among individual members of APEC; and

-- promote a better understanding of economic linkages in the region, including the macroeconomic and structural factors that affects the performance of APEC economies, individually and collectively.

o Second, ETI can contribute to the broader economic dialogue, promote transparency, and serve the Ministerial dialogue in APEC by:

-- developing a common knowledge base covering macroeconomic and microeconomic trends, inter-linkages and issues in the Asia Pacific region;

-- developing a better understanding of policies for enhancing economic growth;

-- assessing the economic implications for APEC economies for regional or global developments; and

-- examining possible areas for economic cooperation among economies at different levels of development that can be pursued through ETI, the Regional Trade and Liberalization (RTL) group, or other working groups within APEC.

3. Means

To achieve its objectives, ETI will promote informal discussions among members which, to the greatest extent possible, would draw upon data and analysis produced by individual member economies or other global or regional organizations such as the Pacific Economic Outlook (PEO) of the Pacific Economic Cooperation Council (PECC), the Asia Pacific Economic Experts Meeting (APEEM), the Asian Development Bank (ADB), the Organization for Economic Co-operation and Development (OECD), the International Monetary Fund (IMF), the World Bank, or others. ETI will endeavor to generate value-added by:

o first, identifying and sharing sources of information on regional economic trends and issues to support an informed and productive economic dialogue in APEC (e.g., building on Australian proposal to develop regional macroeconomic data base);

o second, developing greater familiarity with such information, and, where feasible, contributing to improved consistency across data sources from member economies to facilitate regional analyses and comparisons; and

o third, identifying information gaps on regional economic trends and issues and encouraging the correction of such gaps while making maximum use of the information and analysis produced by member economies and by other international or regional organizations.

This approach will be adopted in regard to both macroeconomic and microeconomic issues.

o Building on the approach adopted in previous years, ETI will discuss the macroeconomic environment for APEC economies, including the current economic situation and the short-term outlook. Using existing sources, this will cover key macroeconomic variables including GDP, prices, employment, and balance of payments.

o On the microeconomic side, ETI will address structural sectoral issues that affect Asia Pacific economies and not already under consideration in the APEC forum. Without restricting the scope of the work program, examples would include: the role of international enterprises in regional trade and investment; the role of the financial sector in promoting savings, investment and growth; the role of government in the economy; public and private investment in research and development; and the comparative endowments of resources, labour and capital across member economies and over time.

4. Contribution to APEC Ministerial

Currently, the Ministerial dialogue in APEC is conducted chiefly among Foreign Affairs and Trade Ministers. ETI will contribute to this dialogue by:

o informing Ministers about the macroeconomic environment that is shaping regional trade and investment opportunities;

o bringing to the attention of ministers areas of potential economic cooperation among APEC member economies, focusing on microeconomic issues affecting regional developments; and

o proposing a strategy to broaden and deepen the APEC economic dialogue as per the needs, interests and commitment of member economies.

5. Contribution to APEC Work Plan

The ETI will further the general APEC process by:

o generating a common knowledge base addressing economic trends and issues in the Asia Pacific region that will provide a context for the formal work program;

o identifying opportunities for enhanced regional economic cooperation;

o sharing information with the Regional Trade Liberalization (RTL) group and other work projects and, where appropriate, undertaking joint activities; and

o referring more technical issues to the appropriate working groups.

6. ETI Structure and Output

The ETI Group is evolutionary and informal. Currently, its meetings are attended by policy advisors from APEC member economies including representatives of Foreign Affairs, Finance, Industry, and Economic Planning ministers and agencies.

A priority will be to seek firm senior-level commitment to the ETI process from the relevant ministries/agencies of all APEC economies. This will require addressing concerns about potential duplication and overlap with the work of other regional organizations (e.g., APEEM, PEO of PECC). It will also entail building up the profile of ETI as a unique forum feeding into a Ministerial process.

The ETI will meet at least once a year, in advance of the Ministerial meeting. The ETI will produce a report to Ministers summarizing its proceedings and proposing next steps. The report will be reviewed by the SOM before the Ministerial meeting.

The chairmanship of ETI shall be established on a rotating basis.

Consistent with current practice, ETI meetings will focus on a minimum of two papers prepared by individual members of the group.

o A macroeconomic overview will be submitted by a designated member, assessing the current economic situation and short-term outlook for the economies in the region, drawing upon national independent sources for data and forecasts.

o Another member of the group will submit an issues paper addressing specific regional economic issues relevant to the Ministerial dialogue.

At least initially, the chief responsibility of the Secretariat in this process will be to provide the logistical support for ETI. If deemed appropriate within the context of broader developments in APEC, the Secretariat could be called upon to provide professional support to ETI.