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PRIME MINISTER
STATEMENT BY THE PRIME MINISTER THE HON P J ] KEATING MP
HOUSE OF REPRESENTATIVES-WEDNESDAY 22 NOVEMBER 1995
APEC This was the third meeting of leaders of the APEC economies.
The process began with the meeting hosted by President Clinton in Seattle in
1993 following a proposal I had made orally and in correspondence with the
other APEC leaders. It continued with the historic meeting chaired by
President Soeharto in Indonesia a year ago, which produced the Bogor
Declaration. In that declaration the APEC economies committed themselves to
the goal of free and open trade in the Asia-Pacific at the latest by 20 10 for
industrialised countries, and 2020 for developing countries.
The Bogor goals were unprecedented and audacious. The challenge for APEC
this year was to put in place at Osaka a plan of action which would show how
the goals could be implemented.
I believe the result was an outstanding success. The plan of action and Leaders'
declaration met all Australia's aims and have firmly cemented APEC as the key
regional body for co-ordinating the development and growth of the Asia Pacific
into the next century.
It has provided a framework which will ensure Australia's continuing and deeper
integration into the dynamic region around us with all the economic, political and
strategic benefits which follow from that.
It is of deep and long-run significance to Australia.
At Osaka, the 18 APEC economies, which already account for 60 per cent of the
world's GDP and half its trade, renewed their commitment what the Leaders'
declaration describes as their ' unwavering resolve' to free and open trade and
investment in the APEC region by 20 10/ 2020.
The Osaka action agenda sets out the principles which will underpin the process
of trade liberalisation and trade facilitation in the Asia-Pacific. The eight
principles we have set down include WTO consistency, comparability,
non-discrimination, transparency, standstill, and a comumitmient to move together
in the liberalisation process.
But a central principle for Australia is comprehensive coverage of all sectors and
issues. This means that agriculture is firmly on the APEC agenda. This was one
of the most difficult issues we faced during the year. But as I told Prime Minister
Murayama, MITI Minister Hashimoto and Foreign Minister Kono in several
meetings over the past twelve months, it was an acid test of APEC's relevance
not only to Australia but to developing agricultural producers like Thailand and
Indonesia. This is a real win for Australian farmers because it enables them to plan
confidently for the opening up of the vast market around us and brings closer our
vision of Australia as a global supplier of food.
In addition to the principles a process was agreed for liberalisation. Leaders
directed ministers and officials to immediately begin the preparation of ' concrete
and substantive' Action Plans to be submitted to the 1996 Ministerial Meeting in
the Philippines for assessment. Overall implementation of the plans will begin in
January 1997, with annual reviews and improvements thereafter. The plans will
be most detailed for the early years, but will stretch through to the 20 10/ 2020 end
dates. We have got the two key things right about APEC.
First, we know where we are going. We have decided on the end point we want
reach free and open trade and investment in the APEC region and we have a
process for getting there concerted liberalisation.
This is an entirely new model for global trade liberalisation. It does not depend
on the legalistic and adversarial approach of traditional trade rounds in which the
incentive for negotiators was to keep their best cards in their pockets, ensuring
that offers were therefore grudging and incomplete. It substitutes instead a new
form of concerted individual movement in which peer pressure and self interest
will work hand in hand to maintain progress towards goals which have already
been set.
The second thing we have right in APEC is the regular involvement of leaders.
Their meetings give the process an authority and drive which could never be
matched by meetings of Ministers alone. Their engagement invests the outcome
of the annual discussions with a weight and authenticity which keeps it moving
forward.
The APEC process marks a very significant new development in trade
negotiations. I suspect it is likely to prove much more relevant to the sort of
global economy which is now developing: one in which Asian countries have an
increasingly significant economic role; in which many more states need to be
engaged in the process and have an stake in the outcome; and in which the role of
developing countries like China and Indonesia Will become more central.
One of APEC's greatest values as an institution is that it is a practical example of
North-South cooperation. It provides a framework for developed and developing
economies to work together to liberalise and facilitate trade and investment and
to promote economic and technical cooperation. It has been fundamental to the
whole APEC outcome that President Soeharto the leader of one of the world's
largest developing countries has been one of the driving forces behind
liberalisation. Leaders did not only talk about principles and process at Osaka. They delivered
a package of initial actions a ' downpayment' on their Uruguay Round
commitmnents which demonstrates beyond question APEC's seriousness of
purpose. For example, Japan announced the acceleration by approximately two years of its
Uruguay Round tariff reduction commitments on items affecting trade worth
billion as well as a substantial package of deregulation measures.
China announced that it would substantially reduce tariffs on over 4,000 tariff
lines and will eliminate import control measures on about 170 tariff lines. The
other APEC members, including Indonesia, all put good contributions on the
table. Through these downpayments APEC has managed to do something the G7
members could not bring themselves to do earlier this year. APEC has become
the principal catalyst for global trade liberalisation.
At the Osaka meeting we urged other WTO members to match APEC's efforts.
We also agreed to hold a meeting of APEC trade ministers next year to consider
joint initiatives in advance of the first ministerial meeting of the WTO which will
be held in December 1996 in Singapore.
In addition to these trade liberalisation measures, a number of important trade
facilitation measures are to be taken. For example, APEC will introduce a
common harmonised system of tariff classifications by 1996, an internationally
agreed standard electronic customs message system by 1999 and pilot mutual
recognition agreements in the area of standards by 1997.
These are important benefits for the business community. Customs procedures
alone can add 10 per cent to the cost of doing business and although tariffs in
some parts of the APEC region remain high, the main impediments for many of
our businesses are in the non-tariff area.
The APEC leaders also acknowledged the vital work the business sector must
play in APEC's work by agreeing to the recommendation from the
Pacific Business Forum that we establish a permanent APEC Business Advisory
Council, with its members to be appointed directly by leaders.
I want to acknowledge here the outstanding work which Australia's
representatives on the Pacific Business Forum, Ms [ melda Roche of Nutrimetics
and Mr Philip Brass of Pacific Dunlop, have done for Australia and for the APEC
region, and to thank them on the Government's behalf.
The Emin~ ent Persons' Group has also made a very valuable contribution to
APEC's development work, and I again thank Mr Neville Wran for all his work
over the past three years
I announced during the Osaka meeting that in response to one of the
recommendations of the Pacific Business Forumi Australia will introduce a
business travel card to facilitate regional travel by accredited business people.
We have also proposed that other APEC economies join us in this scheme. This
will help greatly to facilitate the freer movement of business people around the
region. The long-term benefits of APEC's trade liberalisation and facilitation are
enormous. Recent modelling work by the Office of National Assessments and
the Industry Commission backs up earlier conclusions and suggests that, when
the full effects of the Bogor commitments have flowed through, the income of
APEC members will increase by 3.8 per cent or USD 745 billion more than the
current size of the Australian and Korean economies combined.
Australians will benefit directly and substantially from this process. The initial
results of the most recent modelling shows that Australia's real income will rise
by 6.8 per cent or $ 40 billion when all the effects have flowed through, and that
growth of this order can be expected to generate around 500,000 new jobs over
the course of the liberalisation period.
These revised figures on the benefits to Australia which are the result of more
comprehensive modelling, are substantially higher than those I gave the House in
the statement I made after the Bogor Declaration.
Most of the focus on APEC has concentrated on its trade liberalisation
dimensions. These are central to APEC's work and are vital to the region's
contnung prosperity.
But APEC also has a number of other dimensions, including its important work
in areas like education and training, science and technology, small and medium
enterprises, transportation, telecommunications, tourism, economic policy and
sustainable development.
Cooperation in these areas is expanding quickly and we are seeing the
development of much more intensive sets of linkages between APEC
governments and businesses in all these new areas.
One of APEC's major tasks and one which was recognised by all the leaders at
Osaka will be to keep resources flowing to the rapidly growing East Asian
economies, especially China, as the region's unprecedented growth continues.
For example, East Asia's demand for energy is doubling every 12 years compared
with the world average of 28 years.
China's demand for grains is growing so fast that its estimated shortage within
years could be three to six times Australia's total annual wheat production.
APEC's infrastructure requirements over the next decade are likely to require
US $ 2 trillion, of which well over US $ 500 billion will have to come from the
private sector.
The way we handle these requirements will affect not only the region's prosperity
but its security in the first part of the next century.
I said at the leaders meeting that Australia was ready to address the concerns
which Japan, Korea and China have expressed about meeting their food needs. I
suggested the creation of an APEC task force on food and agribusiness to
examine regional food challenges into the next century. I will be writing shortly
to my colleagues about this proposal.
If the Bogor commitments are fully implemented, by the year 2020 APEC will
account for more than three quarters of global production and three quarters of
the world's trade. ASEAN's per capita incomes will be five times their current
level. One enormously beneficial consequence of the establishment of these APEC
meetings is the opportunity it provides for closer contact between regional
leaders. In addition to the discussions in the leaders meeting itself, I was able to
hold very useful bilateral discussions with President Kim Young Sam of Korea,
President Soeharto of Indonesia, President Zedillo of Mexico,
President Jiang Zemin of China, Prime Minister Murayama of Japan,
Prime Minister Goh Chok Tong of Singapore, Prime Minister Banharn of
Thailand, Prime Minister Bolger of New Zealand and Vice President Gore of the
United States.
This meeting was a very great success for Prime Minister Murayania and the
Japanese government especially MITI Minister Hashimoto and
Foreign Minister Kono who were most directly involved. Japan's leadership was
very important in helping to shape this outstanding result and I congratulate them
on it.
I feel very confident that President Ramos of the Philippines, who will chair
APEC in 1996, will continue this work. I have offered him any assistance
Australia can provide.
I also take this opportunity to mention the collaborative work of officials from
the Department of the Prime Minister and Cabinet and the Department of Foreign
Affairs and Trade who have worked very hard and very effectively, including
with their colleagues in other APEC countries, to help bring about this excellent
result. I suggested last year after the Bogor meeting that the establishment and
development of APEC would rank with the establishment of the structures which
grew from the Bretton Woods agreement after the Second World War as a model
to serve the interests of a new world. After the meeting in Osaka I am more
than ever convinced of the truth of this.
Australia can feel well pleased with APEC's progress and our own central role in
developing it.