MESSAGE FROM THE CO-CHAIRS OF PECC
On behalf of the members of the Pacific Economic Cooperation Council (PECC), it is our pleasure to present our fourteenth annual report on the State of the Region. This year we have chosen to focus on the future of APEC. Next year, APEC will reach the milestone of 2020 – the deadline for the Bogor Goals of free and open trade and investment in the Asia-Pacific. In 2016, our Council established a task force to put forward recommendations for what a post-2020 vision for APEC might be.
The vision that our task force developed was:
“An Asia-Pacific community of openly interconnected and innovative economies cooperating to deliver opportunity, prosperity and a sustainable future to all their peoples.”
To achieve this vision, our task force suggested 10 key action focus areas for APEC. To get a better sense of the views of the broader policy community on these suggestions, we made these issues the focus of our annual survey. The results on some issues were perhaps predictable, while on other issues they were very surprising. Out of that list of 10 focus areas, the most important area for APEC to focus on was robust dialogue and effective cooperation among member economies – this is at the very heart of the idea of APEC and is strongly picked up in Chapter 2 of this report and indeed PECC’s own task force. APEC’s strength and value proposition lie in its non-binding nature. It is not a negotiating forum. But that strength needs to be properly harnessed. There is the perennial risk in the annual demand for ‘deliverables’ that APEC becomes more of a negotiating forum rather than focusing on its core value proposition of dialogue. This is, of course, a fine balancing act.
We are reminded that this year is one of anniversaries. This year marks the 75th anniversary of the Bretton Woods Conference and, as already mentioned, the 30th of APEC. These highlight the idea of cooperating and coming together for a broader common purpose. Setting a vision for APEC’s work in the post-2020 period should help to define what that purpose is.
This year’s report was one fraught with difficulties. As evidenced by the results of our annual survey, the regional policy community’s views on the economic outlook have turned negative. Close to 70 percent of respondents expect the global economy to slow next year and 64 percent of respondents selected increased protectionism and trade wars as one of the top 5 risks to growth for their economies. Interestingly, perhaps remarkably, in thinking about the post-2020 vision for APEC, after the idea of robust dialogue, it was policy initiatives that promote environmental sustainability that topped the list of areas for future work – ahead of more traditional APEC issues like support for the multilateral trading system, trade agreements, connectivity, and structural reforms. APEC has done work on environmental issues in the past and indeed has set targets on energy efficiency, but it is not an area that, anyone would argue, APEC has any particular competence. This is something that we will need to think about amongst the regional policy community given the plethora of organizations working on sustainability issues.
We also present the findings of our index of connectivity in the Asia-Pacific region. Throughout APEC’s early years on integration, there was an almost implicit assumption somehow that the supply side will follow. Even within PECC, from our establishment in 1980, it took nine years for us to establish the Transportation, Telecommunications and Tourism Task Force that looked at the infrastructure side of integration. In 2013, APEC regional leaders recognized that the achievement of the vision of an Asia-Pacific community required seamless physical, institutional, and people-topeople connectivity and they agreed to establish “a seamlessly and comprehensively connected and integrated Asia-Pacific” by 2025 through the APEC Connectivity Blueprint that was adopted the following year in Beijing.
Connectivity itself is a broad and evolving topic. As the chapter discusses, technology is rapidly changing the way in which we connect with each other making measurement an evolving process. The underlying message is that the three pillars are self-reinforcing and inter-related; better transportation linkages between economies foster movements of people; more cooperation between economies facilitates trade and encourages more investment into cross-border and transportation.
In what seems like a long bygone era, APEC was once jibed for being four adjectives without a noun. There was a hope that the ‘c’ might result one day in another word. Perhaps we need to celebrate more what that the ‘c’ actually is – Cooperation. It seems all too lacking in today’s world of trade wars and denigrating institutions that have been built up to avoid the disorder and conflict of previous eras. As is evident from the survey results, there is strong support for Asia-Pacific economic cooperation across the panoply of issues that are defining and shaping our economies for today and for future generations.
We would like to thank Mr Eduardo Pedrosa for coordinating this year’s report and contributing Chapter 1, Dato’ Steven Wong as well as our next generation experts for contributing Chapter 2; and Mr Hugh Stephens for Chapter 3 as well as Mr Anthony Viel and Ricardo Briggs from Deloitte for their insights.
We would also like to express our appreciation for the continued efforts of our member committees to get responses to the survey every year and extend our gratitude as well to the APEC Policy Support Unit, the Russian Foreign Trade Academy, and the Russian APEC Study Center. We would also like to thank the editorial committee of this report who provide guidance and insight on the various issues it addresses as well as the staff of our International Secretariat for their work on this report.
Don Campbell
Co-Chair
Su Ge
Co-Chair