*EPF209 10/08/2002
Transcript: Senior APEC Official Links Security, Economics
(Amb. Greenwood Oct. 7 "Dialogue" broadcast) (6790)

The United States hopes the upcoming meetings of the Asia-Pacific Economic Cooperation (APEC) forum will result in further counterterrorism cooperation and agreements on implementing transparency principles and promoting trade in a digital economy, according to the U.S. Coordinator for APEC.

In an interactive State Department "Dialogue" program with participants in Indonesia and the Philippines October 7, Ambassador Lawrence Greenwood said the APEC region "has done a great job" in combating terrorism.

"But we need to do more, and we are hoping this year that the leaders will endorse a very concrete program of actions in the area of counterterrorism to protect our trade, protect our transportation, protect our infrastructure for financing, to stop financing for terrorism, and also to protect our information systems. And we are looking forward to, again, a very strong statement with very concrete actions outlined," Greenwood said.

Greenwood stressed that one of the challenges APEC members face after the terrorist attacks of last year "is how we can maintain a very competitive, fast, efficient transportation system to move goods and people quickly and efficiently among us, while we also assure the security of that system."

When told by a program participant that some APEC members were concerned that the U.S. emphasis on counterterrorism may be undermining the group's economic agenda, Greenwood replied, "I think nothing could be farther from the truth."

"Security is essential to create an environment for stable growth and for economic dynamism," he said. "But beyond that, as I mentioned, the terrorist attacks have opened up new doors for us -- new doors of cooperation that simply were either difficult or not possible before 9/11. New technologies are now being thought of ... And these new technologies and new forms of cooperation are going to lead to closer forms of economic cooperation, and it's going to lead to different ways of managing things that ... will have very positive economic impacts."

Greenwood said the United States hopes a new APEC agreement on transparency "will be some kind of instrument ... in which the economies in the region will commit to a political commitment to putting in place procedures in the government for publishing all regulations and laws in centralized places, for having a public notice and comment period before making changes to regulations."

Speaking of the connection between APEC and the World Trade Organization (WTO), Greenwood said the members of APEC "need to work together within APEC to help form the consensus and make the decisions that we need to make in order to successfully conclude the (WTO) Doha development agenda by the date that we have decided that we will conclude it by, which is January 2005."

He added that he believes "we will be seeing some important statements coming out of the meetings in Los Cabos in support of the new (WTO) round."

Representatives from 21 member economies will meet in Los Cabos, Mexico from October 23rd to the 27th for the APEC ministerial and leaders meetings. APEC was created in 1989 to promote economic cooperation among Asia-Pacific economies; since that time, APEC has pursued an agenda of economic liberalization, business facilitation, and reduction of trade barriers to promote regional prosperity.

Following is a transcript of the program. Some acronyms used in the transcript are:

ABAC: APEC Business Advisory Council
BRI: Bank Rakyat Indonesia
FTA: Free Trade Area
STAR: "Secure Trade in the APEC Region" initiative

(begin transcript)

"DIALOGUE"
UNITED STATES DEPARTMENT OF STATE
Office of Broadcast Services, Washington, D.C.

GUEST: Ambassador Lawrence Greenwood, U.S. APEC Coordinator

TOPIC: Scene-Setter for APEC 2002

POSTS: Manila, Jakarta

HOST: Judlyne Lilly

DATE: October 7, 2002
TIME: 21:00 - 22:00 EDT

MS. LILLY: Good morning, and welcome to "Dialogue." I'm your host Judlyne Lilly. Representatives from 21 member economies will meet in Los Cabos, Mexico from October 23rd to the 27th for the APEC minister and leaders meetings. APEC, or the forum for Asia-Pacific Economic Cooperation, was created in 1989 to promote economic cooperation among Asia-Pacific economies, and has pursued an agenda of economic liberalization, business facilitation, and reduction of trade barriers to promote regional prosperity.

At last year's APEC meetings in Shanghai, leaders agreed to strengthen cooperation on counterterrorism and measures to encourage economic growth. This year the meetings are expected to focus on APEC implementation efforts to achieve those goals.

To discuss this year's APEC meetings, we have with us today Ambassador C. Lawrence Greenwood, the senior U.S. official for APEC. Thank you for joining us, today. And, Ambassador, could you give us an overview of the U.S. goal for this meeting of APEC?

AMB. GREENWOOD: Yes, thank you, Judlyne. First, let me set the context for this year's meeting. In the past year the U.S. and the region have faced unprecedented challenges. Of course there were the terrorist attacks in the United States last year. There have been corporate scandals here, some of the largest bankruptcies in our history, and the markets, the stock markets have fallen not only in the United States but throughout the region. But we and the region have met these challenges in a remarkable fashion, I believe. And against all expectations, the U.S. economy continues to remain vibrant. We will be putting in more than three percent growth this year, and I think that's a very good record. It is showing that we can meet this adversity.

The region has also bounced back from last year's recession. Virtually every economy in the region slowed down last year. This year growth rates are up. Part of that has to do with the increased exports to the United States. But also a lot of it has to do, particularly in countries like Korea and China, with accelerated structural reform in those economies, which have made those economies stronger, more competitive, and has led to greater growth. And APEC has been part of that success.

Certainly in the war against terrorism the fact that the leaders only weeks after the attacks came together in Shanghai and agreed to a very strong statement condemning terrorism, and pledging to work together to fight terrorism, had a very important impact to show that the region -- which does account for 60 percent of the population of the world, a quarter of the world's Muslims, and 50 percent of all world trade -- that we stand together against terrorism.

We had a role, APEC had a role, in helping launch the Doha development agenda, the new round, the new trade round, WTO; and had a role in pushing reforms, structural reforms throughout the region, which has made the region stronger.

This year we are carrying on that work of increasing trade liberalization, pushing for structural reforms. And, as has been said, the emphasis is on implementation of the APEC principles that we have been pushing for so many years in APEC.

First let me start with -- let me just outline three major areas where we hope to make some achievements this year. One is in the counterterrorism area. Now, we have done -- the region has done a great job in increasing cooperation, putting in place laws to criminalize terrorism, to stop terrorism financing, to protect our information systems, and to protect our trade. But we need to do more, and we are hoping this year that the leaders will endorse a very concrete program of actions in the area of counterterrorism to protect our trade, protect our transportation, protect our infrastructure for financing, to stop financing for terrorism, and also to protect our information systems. And we are looking forward to, again, a very strong statement with very concrete actions outlined.

We are also looking to implement some of the work that we have done in the area of transparency. Last year in Shanghai the leaders called on us, the officials of APEC, to come up with an agreement to implement those transparency principles to make governments more open, to make regulatory regimes more open, to make countries more attractive to investment. And we are working very hard to come up with such an agreement by the time of the meetings in Los Cabos. And then another agreement that we have been asked to work on was on one called on promoting trade in a digital economy. This has to do with liberalization of services, of goods that relate to e-business, so that we will be able to see an acceleration of e-business and e-commerce in the region, and we are working very hard to complete that agreement as well.

There are some other activities we have been working on, and we can get into those if you have questions about them. We have been working on agricultural biotechnology, for example, to try to set common standards and agree on common directions and the safe introduction, science-based introduction of biotechnology products for the region. We have been working on structural reform, and in particular have a project going on corporate debt restructuring.

But let me stop there and take your questions.

MS. LILLY: Well, now we want to welcome our audiences in Manila and Jakarta to the program. Manila, please go ahead with your comments and questions.

Q: Hi. Good morning, Larry. This is Ambassador Albert. I am the APEC SOM leader for the Philippines.

AMB. GREENWOOD: Hello, how are you?

Q: I certainly am looking forward to seeing you again in Los Cabos.

AMB. GREENWOOD: I didn't realize that you were --

Q: I would like to thank you very much for the initiative that you put forward when we first met in Acapulco, and we all recall how challenged we all were by the Shanghai declaration. Certainly we look forward to the STAR initiative, as you can imagine. We think it is one of the main outcomes that will certainly be coming out in Los Cabos. We feel that it sends a clear, collective resolve of the Asia-Pacific community to counter terrorism. I think we covered this in some of our discussions earlier. And we have gone through the concrete measures, and we certainly congratulate you for all the work that you have done on the contents in the STAR initiative. Certainly you have commented as well on some of our concerns as to the timetable, as to the ability of everyone in the APEC community to be starting at the same time, and perhaps complying at the same time. We will have time to discuss those, I believe.

Being given the opportunity perhaps to ask the first question, I will go on a more general approach. Perhaps after listening to quite a number of discussions lately, both in the Philippines and in America, and looking forward to the ALM meeting in Los Cabos, I wonder what could we in APEC or perhaps us, the Philippines, what could we look forward to when President Bush meets his APEC counterparts at Los Cabos? I am stating a very general question, perhaps to start the ball rolling. Thank you, Larry, and see you soon.

AMB. GREENWOOD: Right, thank you. Well, thank you, I didn't realize that you were there. I would have -- you know far more about this process than I do, I think.

The -- let me also start by saying that the Philippines has been one of our most important allies in the fight against terrorism in the region, and how much we appreciate all the support that we have from the Philippines in that fight. And I think that is one of the main topics on the President's mind as he goes to Los Cabos, is clearly the fight against terrorism. It is a fight that as you know is not only -- it is of course aimed at the al Qaeda, but also at the states that would work with al Qaeda and harbor it, and states that would commit terrorist acts themselves. And, as you know, that's another one of the President's priorities of course, is what to do about the problem in Iraq. And the President has just in fact given a speech to Congress on that very subject. And certainly he will be going with that very much in his mind. But he will also be very, very concerned about the economic issues as he goes to Los Cabos -- not concerned in the sense that he's worried that there's some major economic problems coming up; but I think we want to make sure that the progress that we have seen in the Asia-Pacific region over the past 15 years -- and this has been the fastest-growing region by far in the world for the past 15 years -- we have seen a little bit of that promise fade since the financial crisis hit in 1997 and '98. And while there's been a recovery from that, from the depths of that crisis, some of the structural reforms that were revealed by that are still very much -- need to be addressed. And so I think the idea that we continue down the path of open markets, open competitive markets, to continue to make the reforms needed to make all of our economies vibrant and dynamic, so we can go back to those growth rates that we saw in the past, and Asia can again take its rightful place as the fastest-growing, most dynamic region in the world.

So I would say that those two -- again, you ask a very general question -- I'll give two very general responses. But I think those two areas are the ones that will be uppermost in his mind.

Q: Good morning. This is (inaudible -- Leotes Marie Lugo?) reporter for Business World in the Philippines. You mentioned earlier that there have been commitments on counterterrorism made by the APEC leaders in Shanghai. Is the U.S. satisfied with the fulfillment or the realization of these commitments? And which areas do you think should need further cooperation and strengthening?

AMB. GREENWOOD: We have been quite pleased at the level of cooperation throughout the world, and in particular in the Asia-Pacific region. Virtually all the economies have proceeded to implement the Security Council resolutions, in particular Resolution 1373, and put in place changes in their laws, in their regulations, and in their enforcement structures to allow them to better participate in the fight against terrorism, and to better cooperate with all the countries in the region. We have seen that in the case of anti-terrorist financing, we have seen it in the case of protecting our energy resources, and in some of the areas dealing with trade.

But in areas that we do need to have progress -- and there's always progress that can be made, of course -- one of the challenges we face with the attacks of last year is how we can maintain a very competitive, fast, efficient transportation system to move goods and people quickly and efficiently among us, while we also assure the security of that system. And in some ways we have an unprecedented opportunity to look at new ways of managing our trade and transportation infrastructure, and the way we manage the movement of goods and people. The ambassador mentioned the STAR initiative. The STAR stands for "secure trade in the APEC region," and it's an initiative that we are working together with other APEC economies to make our trade and transport system more secure, to increase cooperation between customs officials and immigration officials, to introduce new technologies that will give more information to enforcement officials, that will result in more security but also by having more information and being able to better identify risk will allow legitimate shipments to move faster.

Now, already we are beginning to see this on our border between the United States and Canada, where legitimate trade now passes the border faster than it did before 9/11, and I think it's a remarkable accomplishment. It did take a lot of work, and it took some investment. But that's the kind of work and investment we are going to have to make in the region as a whole, so we can all enjoy the benefits -- the benefit of a more secure world, that is even more efficient than we have today.

Q: It's me again, Delia.

AMB. GREENWOOD: Hi, Delia.

Q: I was looking at some of our documents for discussion as well as the program, and I note quite an active presence of the private sector in Los Cabos, where leaders will meet with CEOs -- the ABAC of course -- and for our own leader we are meeting with two of your business councils -- not one, but two. I was wondering how do you see the role of the private sector in the APEC process. I feel that this has been one of the major elements of the Manila vision some years ago. And we are very pleased of course to see greater participation. But from your point of view I would like to see how this could be further encouraged or further strengthened as we go on with the APEC process.

AMB. GREENWOOD: I think that's a great question, Delia. In fact, you are absolutely right, the institution that we have to work with the business community, the APEC Business Advisory Council, in fact had its first meeting, its inaugural meeting in Manila when the Philippines was hosting APEC a number of years ago. I think that the private sector's link with APEC is one of the most unique and beneficial parts of APEC. We have a very close relationship, as I mentioned. We have an institution within APEC, as you know, that the Advisory Council that represents business. But we also work with business in many other different ways. We have the Energy Business Alliance. We have the Chemical Dialogue. We have the Auto Dialogue. We have business very active in the work that we do in telecommunications.

In virtually every part of the work that we do in APEC, including in the fight against terrorism, the private sector is playing a role. And they have had some real concrete achievements. The APEC air services agreement, which provides for open skies agreements, is the first multilateral open skies agreement in the world, was in fact the brain child of the private sector, and APEC was instrumental in getting it through. ABEC and the business sector has been very active in various standard initiatives that APEC has done. They were active in setting up the Chemical Dialogue I just mentioned, and the Auto Dialogue as well. They also are going to be working very closely with us in the new work that we are doing in trade facilitation and streamlining of customs and working on e-government issues. This will be one of our big agenda items for this coming year.

So I think we have a -- it's, again, a very close relationship with business, and I think it's a very useful relationship that we have -- one that leads to the kinds of changes in our region which have been driving growth.

Q: Ambassador, this is (inaudible -- Leotes Marie Lugo?) -- again from Business World. It has been reported that President Bush would likely push again for a greater cooperation in the war on terrorism during the APEC meeting in Mexico. But some sectors are saying that this has sidelined the "E" in APEC, which is economic issues. Is the U.S. also pushing for other initiatives, like trade and investment and other economic issues other than counterterrorism?

AMB. GREENWOOD: Yes, very much so. This year, as we have been saying, as Mexico has framed it, has been the year for implementation. Now, we have done some implementation in the past, but a much greater emphasis on implementation this year than in previous years. And two examples that I have mentioned already are an agreement on transparency -- we don't know yet exactly what the name is going to be, but it will be some kind of instrument on transparency in which the economies in the region will commit to a political commitment to putting in place procedures in the government for publishing all regulations and laws in centralized places, for having a public notice and comment period before making changes to regulations. Now, this all can sound quite dry perhaps, but for business people and for citizens of our countries, this kind of transparency in government is just vital. It creates an atmosphere, an environment of certainty, which is one of the requirements for attracting investments. And this is -- I am glad you mentioned investment, because it really is one of the central issues we have, and one of the central challenges we have in Asia today.

While I don't necessarily believe that all the investment is being sucked by China, there is definitely a concern that less investment is going to Southeast Asia than it has been in the past. And I think that it has to be something we address. And one of the central ways of addressing it is to improve the investment climate. And one of the central ways to improve the investment climate is to improve governance, and obviously transparency is key to governance. So that's going to be a key issue.

Another area where we are working in the economic area is to -- and one that I didn't mention -- is how to support the conclusion of the new round. I mentioned that APEC had a role in launching a new round, but we also need to work together within APEC to help form the consensus and make the decisions that we need to make in order to successfully conclude the Doha development agenda by the date that we have decided that we will conclude it by, which is January 2005. That's a lot of work to do in a very short time, and APEC needs to be an important part of that. And I believe that we will be seeing some important statements coming out of the meetings in Los Cabos in support of the new round.

Actually, let me add one point, because you also said that there was a concern that our emphasis on counterterrorism may be undermining our economic agenda. And I think nothing could be farther from the truth. I think that for one thing security is essential to create an environment for stable growth and for economic dynamism. But beyond that, as I mentioned, the terrorist attacks have opened up new doors for us -- new doors of cooperation that simply were either difficult or not possible before 9/11. New technologies are now being thought of that simply before 9/11. And these new technologies and new forms of cooperation are going to lead to closer forms of economic cooperation, and it's going to lead to different ways of managing things that are -- in fact, as I mentioned before, will have very positive economic impacts.

Q: My name is -- (inaudible) -- I am the chairman and chief executive officer of -- (inaudible) -- Air Conditioning, a joint venture between -- (inaudible) -- United Technologies. I attended various summits, and I remember distinctly the summit in what we call the APEC CEO Forum in Vancouver, where it was held one or two days, and then simultaneously with the meeting of the governments of APEC. And I remember distinctly that the Canadian government wanted to downplay the financial crisis in Korea and Japan, where they were defaulting on their loans, if you recall. And it was that forum that we all went to our respective governments and said, Look, we have got to face this issue, and Canada should not ignore it -- because they wanted only good news to come out of that. And the reason I am bring this up is because in the conference in Los Cabos I think the concern of the business community in APEC will be focused -- rather than economics, they would like to see what -- the issue that of course we are well aware with respect to the Iraq and U.S. conflict -- is possible to mark the security that has to be addressed. What do we see and whether that would be taken up in the summit?

AMB. GREENWOOD: Well, APEC is of course an economic forum, so we don't have agenda items that talk about problems such as the problem in Iraq. However, when leaders get together they have a fair amount of time together, and I would be very surprised if that subject did not come up and if the President did not express his views on that subject. His views of course are very well known. And so, yes, it would probably be a topic of conversation during the course of the meetings, although it is not on the agenda by any means.

MS. LILLY: Thank you, Ambassador, and thank you Manila. Now we turn to our audience in Jakarta. Please go ahead.

Q: Good morning, Ambassador Greenwood. It's Bill Heidt, acting Economic Counselor at the Embassy here.

AMB. GREENWOOD: Good morning, Bill.

Q: We are coming to you today just 30 miles from Bogor, site of the 1994 Bogor Declaration on Free and Fair Trade. I mention this only to remind everyone of the important role Indonesia has played in APEC from the beginning of the organization.

We have two good panelists here, one from the Indonesian government and one from one of Jakarta's top research institutes. We also have a good group of journalists. From the Foreign Ministry we have Mr. Ibnu Hadi. He's a deputy director for APEC. From the Center for Strategic International Studies, we have Mr. Raymond Atje. He is an economic researcher. He is working on forestry issues, as well as financial sector integration in the Asia region. And also he's interested in investment in Indonesia's decentralized era.

Obviously Indonesia is a large and heavily populated country, so there's a lot of interest here on the impact of some of these APEC transportation initiatives this year. I am going to turn things over to Mr. Hadi from the Foreign Ministry, who is going to ask the first couple of questions.

Q: Yes, good day. Last time I saw you you were playing banjo or guitar, singing some country songs -- (inaudible) -- programs, and I must admit that you have a good skill as well as your ability in leading your delegates in the senior officials meeting.

AMB. GREENWOOD: You are too kind.

Q: Larry, as you mentioned before that the APEC theme this year is expanding the benefits of cooperation for economic growth and development, implementing the vision, and one of the subjects is to make APEC to be more relevant to our community in this regard. I would like to seek your opinion how to make it more relevant to our public? It's kind of -- ask that question -- but for a representative from a developing economy, we should make the people convinced that APEC is beneficial for our community. So in light of these themes, I would like to know from the U.S. point of view how to translate these themes into actions and programs in order to make APEC to be more relevant in our communities. Thanks.

AMB. GREENWOOD: Well, I think that's a very good question. I certainly look forward to continuing to work with my friends in Indonesia and around the region to try to do that very thing. Obviously you are in a much better position to tell me how we can help you in addressing the challenges that there are for Indonesia and elsewhere.

I think that there's two parts to that answer. One is the question of just how do you make trade and investment relevant to the man on the street. And this is not just a challenge in Jakarta or Bogor, or anywhere in Indonesia; it's also a challenge here in the United States. We constantly face this challenge of explaining why open markets, why foreign direct investment into our economy is a good thing for America. And we have just gone through this debate in fact through -- we had a very extensive and very long national debate on trade as we work through the legislation for trade promotion authority, which we finally secured about a month and a half ago. And it's -- again, it is difficult. I think in the end that you have to make the economic argument that as markets open people are allowed to compete and benefit from their labors, and they are not taxed -- which is what an import restriction is -- that they are not taxed in order to shift their income to somebody else who doesn't work as hard, and does not work in a competitive sector. The basic economics I think is one of the things we have to keep hitting and showing how trade and investment does in fact lead to growth, and does in fact lead to more jobs. And I think that is the economic facts, but it's just sometimes hard to get those facts out.

The other part of the answer is that we need to, as you suggest, we need to broaden the benefits. We need to -- and that needs to be done by making sure that all of our citizens have access to health care, have access to education, have access to capital. And we have been working within APEC for many years to do these programs for education. We have a number of education programs in APEC for health care. And in this area we have been working very closely with Mexico and Indonesia on micro-finance. And of course Indonesia has one of the most successful micro-finance institutions in the world in BRI. And so this is another way of really showing how APEC can help right down at the grass roots in opening up village banks.

Q: Thank you, Larry. You mentioned the BRI as a good example in micro-financing. I would like to turn to the counterterrorism and its economic impact. As a follow-up to last year's statement, the U.S. has come up with agood proposal, as you mentioned, security in the APEC region. And the basic idea is to ensure that security and economic growth can go hand in hand. However, to achieve that condition then we must admit a lot of improvements need to be done in terms of infrastructure, resources -- you mentioned it before in terms of equipment and everything, and all related to capacity building. And knowing that the APEC economies comprise developed economies and developing economies, with different stages of economic development, then in order to achieve such an ideal condition, then how do you foresee to implement such a proposal, a good proposal? Thank you.

AMB. GREENWOOD: I think -- first of all, I don't want to overstate the economic investment that is required here. For example, to -- it's going to be important to have equipment that can use gamma rays to inspect containers. And that equipment runs still maybe $2 million for each X ray. But a port only needs one or two of those, and a two to four million dollar investment is not a large investment for an active port doing international business. And that's about the highest priced part of the investment that is required. So a lot of these can be -- really it's a matter of increasing cooperation more than it is simply spending money, although there is obviously some investment that is required.

And I think but more importantly, perhaps, is that I think we all simply have to work from where we are now and move forward. I think you're right it's going to be a while before we all reach exactly the same level. But I think we can all make progress on that path. And so I think it's just a question of moving in the right direction and making -- setting certain priorities in terms of how -- what's important to us.

Q: Good evening to you, Mr. Ambassador. I am Raymond Atje from CSIS in Jakarta. My question is on free trade areas really in APEC. There are a number of initiatives for the creation of new free trade areas within the Asia-Pacific region floating around. If some of these initiatives fall through, it is possible that the outcomes may not be fully compatible with some of APEC's own ideals, such as the ideal of unilateral liberalization. I would like to hear your comments on this issue.

AMB. GREENWOOD: That's a very good question. I think it is very important that the free trade agreements that are developed in the region are consistent with APEC principles. And those principles, which are outlined in a number of APEC documents, including the Osaka Action Agenda and the Bogor goal itself, include comprehensiveness, openness, inclusiveness and no harm to -- no increased barriers. And I think it is important that the FTAs that are concluded in the region certainly meet some if not all of those requirements, and comprehensiveness I think being a very important one. And at some point envisioning that they could be open in the future to others. I think one of the difficulties, as you know, is that free trade arrangements are in fact among like-minded countries that are ready to drop their barriers to each other, and not everyone will want to participate in that kind of activity, which means that they will be preferential in nature. But I think over time I would hope that we would be moving towards both within the region and between the region and the rest of the world free trade that was in fact open to all. But I think these FTAs could be seen as stepping stones towards that, with each arrangement which will be preferential in nature eventually leading to a free trade system in the region that would be in fact more inclusive.

But let me underscore the importance of comprehensiveness, because that's the area where most of these -- many of these FTAs do fall short, where they exclude entire sectors, for example. That is a problem because you are creating preferential trade in only one part of the trade between two countries, and comprehensiveness if very important.

Q: My second question is about the mechanism to ensure that the member economies would stick to their commitments. In 1994, APEC agreed to achieve the goal of free and open trade and investment in the Asia-Pacific by 2010 for industrialized members and 2020 for developing economies. Given the fact that APEC agreements are nonbinding in nature, what would be the best mechanism to ensure that the members will follow their commitments? And what would APEC do as an institution if some of them backtrack on their commitments? Thank you.

AMB. GREENWOOD: I think there's I guess two major forms of -- two ways that we can put pressure on all of us to keep our commitments. One is plain old peer pressure. And we shouldn't underestimate that. We have a process within APEC of peer review of our trade policies and investment policies, and we recently strengthened that, thanks to the leadership of Japan in proposing a new form of peer review. And that I think is effective. And the fact that our leaders get together once a year and reiterate their commitment to Bogor -- I think -- I believe if you check every leader's statement I think it mentions Bogor. We certainly intend to put Bogor in this year as well. And having the top leader of your country commit that every year, I think that helps keep the pressure on. And I think the other mechanism is the marketplace itself. Those economies that are not following through, that backtrack, will be punished by the marketplace. They will not be as desirable places to invest. Citizens themselves in those countries won't be as stimulated to economic activity as they would be otherwise. So marketplace and peer pressure actually are pretty powerful forces.

Q: My third question is about -- you mentioned about the STAR program. This program -- the problem with this program is that it is likely to increase the transaction cost, and it will be difficult for the developing economies to follow the program. What would be the best way to help the developing economies to implement this STAR program?

AMB. GREENWOOD: Again, you are certainly right that some of the upfront initial investments can lead to a short-term increase in transaction costs. I think that will be very small, as I mentioned. But I think even more importantly the medium to long-term impact is going to be in fact trade facilitation, so that when you put in, for example, one of the elements of STAR is to have a common reporting system for customs, so that customs officials can work closer together to identify high-risk shipments. But in having that -- we have been working to have that common customs reporting format for a decade -- not because of terrorism, but in fact to facilitate trade. That is going to actually lead to more efficiencies. And so I think in the end you aren't going to find -- you will find that the opposite is true, that in fact transaction costs are going to come down as a result of the entire initiative.

In terms of working with countries that need work on capacity building, we are committed to doing that. We are talking to a number of other countries in the region to try to coordinate assistance and to make sure that we can better deliver assistance, training, maybe some help in financing equipment purchases. So we are looking at the World Bank -- last -- two weeks ago, during the Bank-Fund meetings here in Washington, D.C., said they were going to be supporting this activity more. So we are -- this is also very important, and you are right, and we are committed to working in this area to help the developing economies of APEC build their capacity so that they can fully participate in the benefits of this program.

Q: Thank you very much, Ambassador Greenwood. It's Bill Heidt again. That's for your comments today. In closing here I would just like to relate to you that we asked for questions from the journalists, and there were a couple of very interesting questions about reflecting Indonesia's domestic situation, especially the large number of people in poverty here. And one person asked whether APEC has any specific programs that look at poverty. And another person asked -- another journalist asked whether APEC has any special programs for agricultural adjustment, given that in a liberalizing trade agenda that there's inevitably some adjustment in the agricultural sector which might be an issue that Indonesia needs to consider. So, in closing, I would just like to convey to you that there was that concern running through the audience. Thank you very much.

AMB. GREENWOOD: Well, thank you. It is very much a concern that we all share. We -- as I said, we think that opening up trade and investment can lead to more growth and alleviate poverty, and we think that's a very important part of it. But we also do need social safety nets. We need health programs, education programs. We need programs that will get the Internet out to all the villages around Indonesia, so that everyone can benefit from some of these advances that we have enjoyed. We need obviously programs to help people make a living for themselves. So that is a very, very important element.

(Manila)

Q: Larry, you are hearing me for the third time -- hope you don't mind.

AMB. GREENWOOD: No.

Q: But perhaps we are signing off to say goodbye to you. Just to let you know that in the true spirit of community building in APEC, we have with us here representatives from the embassies of Australia, Mexico, New Zealand, Japan, Thailand, Chile, Indonesia and Canada. So we are quite the family around here listening to you. And we do thank you very much. It has been most informative. And we look forward to more dialogues with you. Bye.

AMB. GREENWOOD: Thank you very much. And I've always called APEC a family, and I certainly feel that family sense right now. Thank you very much, Delia.

MS. LILLY: And I'm afraid that is our last question, and our discussion must come to an end. Our thanks to Ambassador Lawrence Greenwood for joining us today, as well as to all of our participants in Manila. And from Washington, I'm, Judlyne Lilly for "Dialogue." Good day.

(end transcript)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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