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APEC Insights: Published by the National Center for APEC

Volume 3, Issue 1
April 2010
Greetings,
We hope that you find this issue of APEC Insights useful and informative.  As always we welcome your thoughts and comments.
In This Issue
Leadership Corner
Countdown to 2011
Why APEC is Important to America
TPP Negotiations
APEC Japan 2010: In Search of a New Vision
APEC Tariff Database
Supply Chain Connectivity Framework
ABAC Update
SOM I Outbrief
IPEG - Private Sector Dialogue
CPLG Dialogue
2010 Calendar of Events
Leadership Corner
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        It has been a pleasure for me to serve and represent American business interests in APEC first as NCAPEC Chairman in 2007, and then as a U.S. ABAC member from September 2007 through 2009. 
 
       My work with APEC and ABAC has given me a profound understanding of the importance of both institutions. In addition, I have come to appreciate the work that NCAPEC has done facilitating U.S. private sector engagement in the APEC process, elevating issues of concern to senior levels of APEC member governments, and working hard to identify potential solutions.
 
       With APEC economies leading the way, the global economy is recovering from its worst downturn since the Great Depression. I can tell you that, having returned to Europe, the pace of economic activity here is in stark contrast to many of the economies of APEC, and the switch of economic power is evident. APEC members have worked on their own and together to help stimulate economic growth while ensuring that the recession did not lead to a depression. I firmly believe that APEC and ABAC must continue to reinforce the view that a robust trading climate and policies that enable innovation and entrepreneurship are essential to sustaining a healthy global economy. 
 
       In parallel, we need continued vigilance against protectionism as well as strong business support for the Free Trade Area of Asia Pacific (FTAAP) and one of its potential building blocks, the Trans-Pacific Partnership. Other issues related to trade at the border, behind the border, and across the border also remain as relevant today as ever.
 
       APEC has made significant progress. However, its ultimate achievement will come when it meets the goals it set for itself in 1994 - namely the Bogor Goals. They include the achievement of free and open trade and investment in Asia Pacific no later than 2010 for industrialized economies and no later than 2020 for developing economies. There is still a lot more work to do.
 
       At the last APEC Leaders Summit in Singapore, a common message from the U.S. business community to the U.S. government was that the private sector needed the strong engagement of the U.S. in APEC and in the Pacific Rim in general. As the host of APEC 2011, the U.S. is in an excellent position to demonstrate strong leadership and continue APEC's progress toward meeting the Bogor Goals. At the same time, the U.S. private sector has a prime opportunity to become engaged more than ever before.
 
       I would like to thank APEC, NCAPEC, ABAC, and their members, as well as the representatives from the U.S. government for your support and for making my time with APEC so rewarding. U.S. ABAC is in good hands under Deb Henretta and Peter Scher. Please continue your strong support of them and I encourage you all to continue playing an active role and raising your issues with NCAPEC and ABAC members. 
 
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Nick Reilly
President
General Motors Europe

Countdown to 2011
NCAPEC 2011 Host Committee Logo
        In November 2011 when President Obama hosts APEC leaders in Honolulu, it will be the culmination of four years of determined work stemming from the 2007 Australia APEC Leaders Meeting, when the United States first announced it would host APEC.  The U.S. year starts in earnest immediately after the Yokohama APEC meetings this November, with the first informal meeting of Senior Officials slated for December.  This meeting will identify key objectives and set the tone for the year. Through strong leadership, the United States has the opportunity to project a vision that can set APEC - and the United States - on an ambitious path toward an economically integrated Asia-Pacific.
 
       Ever since the U.S. announced it would host APEC 2011, both the U.S. government and the private sector have been developing long-range initiatives within a broad spectrum of APEC work streams. Private sector committees and working groups coordinated by the National Center have been laying out strategic frameworks. They have also been setting objectives for APEC action in energy security, trade facilitation, food security, information and communications technology, life sciences, health innovation, and digital prosperity. The U.S. Government, U.S. ABAC members, and National Center members have been working intensely to position issues, build support from key economies, and coordinate closely with the previous APEC chairs from Singapore, and Japan to build a robust agenda for the U.S. year.
 
       The private sector led APEC 2011 USA Host Committee has been launched, and already a number of companies have committed their support. Craig Mundie of Microsoft and Michael Ducker of FedEx - both veterans of many APEC summits - will serve as chair and vice-chair, respectively, of APEC 2011 USA. The Committee will be charged with organizing, coordinating, and conducting meaningful private sector activities to be held in conjunction with APEC meetings in the United States throughout 2011. In addition to organizing and conducting the CEO Summit in November, the Committee will also organize and support complementary business activities with the Senior Officials' meetings, as well as Ministerial meetings. It will also undertake an extensive outreach effort to entrepreneurs, small businesses, and the policy/academic community throughout the United States. On April 16, the Steering Committee of the APEC 2011 USA Host Committee will meet for the first time.
 
      The U.S. Government has begun to name the host cities for 2011 APEC meetings including Big Sky, Montana for the Meeting of Ministers Responsible for Trade; Honolulu, Hawaii for the Leaders Meeting; and Washington, D.C. for the first Senior Officials meeting. National Center President Monica Whaley recently returned from Honolulu after attending an APEC Honolulu Host Committee launch with veteran Senator Daniel K. Inouye. 
Left to Right: U.S. Senior Official to APEC Amb. Kurt Tong, Bank of Hawaii CEO & President Peter Ho, Senator Daniel K. Inouye, and Governor Linda Lingle attended the Honolulu Host Committee Launch last week.
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The APEC 2011 USA Host Committee will be working closely with the Honolulu Host Committee on local issues in advance of the Leaders Meeting in November. The National Center will be co-sponsoring an APEC policy discussion with the Mansfield Foundation later this month, as well as
co-hosting a major APEC address by Deputy USTR Demetrios Marantis in May.

APEC 2011 at a glance:

December

Informal Senior Officials' Retreat

Honolulu, HI

January

NCAPEC 2011 Executive Roundtable

TBD

February

SOM I

Washington, DC

ABAC I

Beijing, China (tentative)

May

ABAC II

Seoul, South Korea

SOM II

Big Sky, MT

Meeting of Ministers Responsible for Trade

Big Sky, MT

Meeting of Ministers Responsible for SMEs

Big Sky MT

August

ABAC III

TBD

September

SOM III (tentative)

TBD

Meeting of Ministers Responsible for Energy and Transportation (tentative)

TBD

APEC Clean Energy Transport Symposium (tentative)

TBD

Digital Prosperity Summit

TBD

Health Innovation Summit

TBD

APEC Life Sciences Innovation Forum

TBD

November

APEC Concluding Senior Officials Meeting

Honolulu, HI

APEC Joint Ministerial Meeting

Honolulu, HI

Concluding ABAC Meeting

Honolulu, HI

APEC CEO Summit                    

Honolulu, HI

APEC Leaders Dialogue with ABAC

Honolulu, HI

APEC Economic Leaders Meeting

Honolulu, HI

Why APEC is Important to America
Click the image to watch the interview (Courtesy of the U.S. State Department)
Video Link of Kurt Tong Interview
      Ambassador Kurt Tong, Senior U.S. Official to APEC, recently spoke on the importance of APEC to America.  Ambassador Tong discussed the role of APEC in global economic recovery, the themes that will be addressed in the Japan 2010 year, and the priorities that are being developed for the U.S. hosting of APEC in 2011.

Click here to read the transcript.

 
TPPEight APEC Economies
Conclude First Round of
TPP Negotiations

       More than 200 delegates from the United States, Australia, Brunei Darussalam, Chile, New Zealand, Peru, Singapore, and Vietnam convened in Melbourne, Australia from March 15 - 19 to commence negotiations on the Trans Pacific Partnership (TPP).  Negotiators considered possible approaches to further open markets between TPP members, expand trade, and support good jobs. Delegates had robust discussions on how to design the agreement so that it promotes regional integration, regulatory coherence, transparency, competitiveness, and development. Delegates also discussed ways to encourage the participation of small- and medium-sized businesses in trade and advance other key issues, such as labor and the environment.
Delegates from eight APEC economies (including Australian delegates seen here during the opening plenary) attended the first round of TPP negotiations.
Delegates during the first day  of TPP negotiations
 
        On the negotiations, USTR Ron Kirk described the TPP as, "...a unique opportunity to shape a high-standard, broad based regional pact. In line with the President's goal of supporting two million additional American jobs through exports, a robust TPP agreement would expand our exports to one of the world's fastest-growing regions."  While the TPP is not specifically an APEC initiative, APEC should be credited for laying the groundwork for such discussions through its strong commitment to open and free trade in the Asia Pacific.  The second round of negotiations is scheduled to take place from June 14 - 18 in the United States.  

APEC Japan 2010: In Search of a New Vision
      NCAPEC President Monica Hardy Whaley moderated a luncheon discussion at the Japan Society inNew York on March 15 entitled, "APEC Japan 2010: In Search of a New Vision."  
Left to Right: U.S. Senior Official for APEC Ambassador Kurt Tong, APEC 2010 SOM Chair Ambassador Shigeru Nakamura of Japan, and NCAPEC President Monica Whaley.
(Ken Levinson photo)
U.S. Senior  Official for APEC Ambassador Kurt Tong, APEC 2010 SOM Chair Ambassador  Shigeru Nakamura of Japan, and NCAPEC President Monical Whaley
       APEC 2010 SOM Chair Amb. Shigeru Nakamura of Japan and U.S. Senior Official for APEC Ambassador Kurt Tong, joined in discussions on principal themes for APEC Japan 2010 such as: increasing regional economic integration, promoting balanced, inclusive and sustainable economic growth, as well as furthering emphasis on human security issues to protect societies against a multitude of threat.

      A full summary of the event will be available in the coming weeks.

APEC Tariff Database
        The National Center for APEC, along with the U.S. ASEAN Business Council and U.S. Council for International Business, is finalizing a proposal to launch an APEC-wide customs and tariff database.  Businesses based in the APEC region have expressed interest in a robust trade database that would be fully searchable based on Harmonized System classification numbers. A pilot demonstration is slated for spring/ summer 2010.  In preparation for the launch of a pilot phase, the National Center has been collecting input and comments from interested stakeholders.  We invite interested companies and trade associations to contact the National Center for additional details.

Further Resources:


Enhancing Customs Transparency in APEC: Next Generation APEC Tariff Database

The Next Generation Interactive APEC Tariff Database - A tool for SMEs
Supply Chain Connectivity Framework
       On March 10th, the National Center held a post-SOM trade facilitation briefing with Ms. Arrow Augerot, Deputy Assistant USTR for APEC, during which the National Center was able to summarize and comment on key highlights and outcomes from the APEC and ABAC Meetings. One of the key documents discussed during the briefing was the APEC Supply Chain Connectivity Framework, which focuses on the eight identifiable supply chain choke points that APEC economies are working on alleviating. Since the briefing, the National Center has been compiling private sector input on specific actions business would like to see APEC economies implement under each choke point. NCAPEC has also solicited input from ABAC economy secretariats on what issues they would like addressed. The input collected will be shared with the Committee on Trade and Investment (CTI) in the coming weeks for the purpose of sharing the private sector perspective on the choke points. Please contact the National Center for additional details.


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ABAC Update
U.S. ABAC member Deb Henretta converses with Alex Parle, NCAPEC Vice President, ABAC Relations, during the Melbourne meeting.
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        ABAC members gathered in Melbourne, Australia from February 9 - 12 for their first meeting of 2010.  ABAC members were joined by 15 APEC Senior Officials or their representatives, forming a dialogue to exchange views on the APEC 2010 priorities.  U.S. ABAC member Deb Henretta of Procter & Gamble, Chair of the Facilitation Working Group, represented the interests of the U.S. private sector at the meeting along with representatives from fellow ABAC member JPMorgan Chase & Co. and NCAPEC staff.
     
      During the meeting, ABAC Chair Gempachiro Aihara of Mitsui and Co., Ltd. presented the themes for ABAC 2010, and ABAC Working Group Chairs presented their respective work plans for the upcoming year, laying the groundwork for the Council's key messages and recommendations to APEC Leaders.
 
       The APEC 2010 SOM Chairs also elaborated on the APEC 2010 priorities. APEC 2010 seeks to create a new vision for APEC with three pillars: regional economic integration, new growth strategy, and human security. ABAC members and APEC Senior Officials discussed at length the subject of "APEC Growth Strategy" which included such elements as balanced growth, inclusive growth, sustainable growth and knowledge-based growth.
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Delegates attend the Facilitation Working Group meeting, chaired by U.S. ABAC member Deb Henretta.
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      ABAC members continued discussions on the Trans Pacific Partnership (TPP), whose APEC economies are home to 470 million people and account for a combined gross domestic product of more than US$16 trillion. ABAC Chair Aihara noted that, "To realize long term growth there is no substitute for expanding trade and investment. Making concrete progress towards the Free Trade Area of the Asia Pacific therefore is a major step in that direction." U.S. ABAC member Deb Henretta reaffirmed U.S. business support for the initiative as a means to promote US engagement in Asia. She noted however that U.S. companies are still waiting for the scope and modalities of the TPP to be more clearly articulated. The first round of negotiations for the TPP was held in Melbourne during the week of 15 March, (see related article) with the second round scheduled to take place from June 14-18 in the United States.
 
      Prior to ABAC II in Taipei, U.S. ABAC members will be meeting with senior U.S. officials in Washington D.C. The meetings will provide an opportunity to share U.S. private and public sector priorities in APEC and the region, as well as identify areas of collaboration through 2011. ABAC members will then reconvene in Taipei from May 18 - 21 for the second ABAC meeting of the year.
 
       The two major deliverables for ABAC II in Taipei will be finalizing and endorsing the ABAC Letter to APEC Ministers Responsible for Trade (MRT), and the ABAC Letter to APEC Energy Ministers. The former will be presented at the Meeting of APEC Ministers Responsible for Trade (5-6 June, Sapporo, Japan), and the latter will be presented at the APEC Energy Ministerial Meeting (19-20 June, Fukui City, Japan). Through upcoming meetings, U.S. ABAC members will also be working closely with their Singaporean and Japanese counterparts to incorporate lessons learned and continue to prepare for ABAC in 2011.

SOM I Outbrief
Ms. Wendy Cutler, Assistant USTR for Japan, Korea, and APEC at the SOM I retreat on February 22.
Ms. Wendy Cutler, Assistant USTR for Japan, Korea, and APEC at the SOM I retreat on February 22.
        The first meeting of APEC Senior Officials, SOM I, was held 21-22 February in Hiroshima, Japan.  The main elements of discussion were the three key areas identified as priorities for APEC in 2010 - regional economic integration (REI), a proposed new growth strategy for the region, and human security.  U.S. APEC Senior Official Kurt Tong and Assistant USTR Wendy Cutler highlighted some key developments of these meetings during a debrief held in Washington, D.C. in late March, which was organized by the National Center on behalf of the U.S. APEC Business Coalition.
           
       Ambassador Tong noted that the Hiroshima meetings focused on following up to APEC's 2009 work on the application of the World Banks' 'Ease of Doing Business Indicators' in an APEC context. The U.S. has lead agency within APEC for work on the 'starting a business' indicator - other APEC economies have come forward to work on various other indicators and to seek assistance in advancing the project, as was hoped.
           
Senior Official to APEC Ambassador Kurt Tong at SOM Ecotech meeting February 23.
Senior Official to APEC and Group Chair Kurt Tong at SOM Ecotech meeting February 23.
      On the issue of food security, Ambassador Tong noted that Japan will host a Meeting of Ministers Responsible for Food Security, which should result in a clear statement of APEC commitment to priorities of work including improving productivity, trade, investment, and reliable access to food in APEC. It is also hoped this will lead to creation of some form of public-private partnership as a followup mechanism to ensure implementation of food security commitments.
           
      Assistant USTR Cutler noted that trade-related work at Hiroshima and through 2010 to date has focused on regional economic integration, building off of APEC's work last year in this regard on services. It is expected that much of this year's work will focus on investment issues and include work on capacity building, as well as the establishment of shared principles. The U.S. also anticipates increased emphasis on work in the area of trade in environmental goods and services, with priorities on identifying and addressing existing or potential non-tariff measures that would impact trade in this area.
 
       Given the ambitious agenda and large amount of work to be done in 2010, APEC Senior Officials have agreed to meet intercessionally in late April for "SOM 1.5" to sustain momentum on 2010 work efforts and ensure successful results by November's Leaders Meeting. Officials will meet again for SOM II in Sapporo in late May and early June, followed by the annual meeting of APEC's Ministers Responsible for Trade (MRT) June 5-6.

IPEG - Private Sector Dialogue
Dr. Francis Gurry (second from left) delivered the opening remarks during the private sector dialogue with APEC's Intellectual Property Rights Experts' Group on March 4.
ABAC Japan
        The National Center, through its role as Secretariat to the U.S. ABAC Members, led the organization of a private sector dialogue with APEC's Intellectual Property Rights Experts' Group on March 4. The event was held in Hiroshima, Japan as part of a series of APEC meetings held after the first Senior Officials' Meeting of 2010. The Dialogue was opened by World Intellectual Property Organization (WIPO) Director General Dr. Francis Gurry, who spoke on three current issues and trends in intellectual property:
  1. Demand management: there is currently a backlog of 3.5 million unprocessed patents around the world.  With global R&D investment around the world topping $1.1 trillion annually (3% of global economic output) the situation is not likely to improve. He suggested that widespread systems for work sharing are needed to manage the increasing demands on patent offices.
  2. Broadened scope of WIPO discussions: after a patent has been granted, Dr.Gurry mentioned the need to address issues such as valuation and securitization of IP. He also highlighted  the intersection between IP as well as science in the fields of health and environment.
  3. Platforms: platforms are important vehicles for international cooperation. You Tube and Twitter have triggered behavioral transformations that could not likely be achieved with a treaty. The membership of APEC, with both developed and developing economies, comprised a unique cross-section of WIPO's overall membership making it an excellent forum for discussion of IP issues.
        Dr. Gurry's remarks were followed by two panel sessions with both government and private sector speakers. The first panel focused on patent cooperation, including a presentation identifying the benefits that cooperation among patent offices brings to users, examples of cooperative efforts, and work-sharing and harmonization. Widely used documentation such as Common Application Format, Common Citation Document, and Patent Prosecution Highway were cited as examples of ways to reduce costs.

        The second panel session focused on enforcement of IP at the border, including a presentation that highlighted the importance of border enforcement in light of the highly organized manner in which counterfeit and pirated goods are distributed.  Proposals included the establishment of a global corporation framework to help active engagement against counterfeit and piracy in a coordinated matter, information sharing among customs agencies, as well as sharing between industry and customs agencies.

        The outcomes of the dialogue will be used to inform ABAC's recommendations to Leaders and Ministers in 2010. APEC officials found the first-ever dialogue with the private sector to be a valuable event and have asked that a similar dialogue on emerging IP issues be held again in the near future.

Competition Policy Dialogue
       The National Center for APEC, in cooperation with the U.S. Chamber's Global Regulatory Cooperation project, organized a dialogue with APEC's Competition Policy and Law Group on procedural fairness in competition policy regimes on February 28 in Hiroshima, Japan. The dialogue was held as part of  an ABAC-endorsed initiative to raise awareness of the importance of procedural fairness as an increasing number of economies in the region are establishing competition policy regimes and taking first steps toward implementation.
 
      The event began with a presentation on steps the OECD has recently taken to address the issue. This was followed by three sessions featuring panelists from the public and private sectors on procedural fairness in merger cases, the investigation and inquiry phases, as well as the deliberation and determination phases. In the closing summary, private sector representatives encouraged APEC officials to develop and adopt guidelines or best practices for procedural fairness. The event proved to be an effective means to introduce procedural fairness concepts and share best practices with APEC officials, many of whom are involved in establishing and shaping competition policy regimes in their respective economies.

2010 Calendar of Events

January

14

State Department CEO Roundtable

Washington, DC

19 - 20

NCAPEC Executive Roundtable

Half Moon Bay, CA

February

9 - 12

ABAC I

Melbourne, Australia

22 Feb - 7 Mar

Senior Official Meeting (SOM1), Related Meetings

Hiroshima, Japan

March

5-6

30th Meeting of Intellectual Property Experts Group

Hiroshima, Japan

April

TBA

36th Tourism Working Group

Lombok Island, Indonesia

May

18 - 21

ABAC II

Taipei, Rep. of China

24 May-4 June

Senior Official Meeting (SOM2), Related Meetings

Sapporo, Japan

June

5 - 6

Meeting of Ministers Responsible for Trade

Sapporo, Japan

19 - 20

Energy Ministerial Meeting

Sapporo, Japan

July

August

7 - 8

Economic Committee High Level Policy Roundtable

Beppu, Japan

24 - 27

ABAC III

Bangkok, Thailand

September

1-2

NCAPEC Board Retreat

Seattle, WA

TBA

3rd APEC Oceans-Related Ministerial Meeting

Paracas, Peru

15 - 26

Senior Official Meeting (SOM3), Related Meetings

Sendai, Japan

October

2 - 3

SME Ministerial Meeting

Gifu, Japan

16 - 17

Agricultural Ministerial Meeting

Niigata, Japan

30 - 31

Ministerial Meeting on Telecommunications and Information Industry

Nago, Japan

November

6

Finance Ministers' Meeting

Kyoto, Japan

7 - 8

Concluding SOM (CSOM)

Yokohama, Japan

10 - 11

22nd APEC Ministerial Meeting

Yokohama, Japan

12 - 13

CEO Summit

Yokohama, Japan

13 - 14

18th APEC Economic Leaders' Meeting

Yokohama, Japan



NCAPEC Logo       The U.S. National Center for Asia-Pacific Economic Cooperation (NCAPEC) is the only U.S. business association focused exclusively on facilitating American private sector input to the APEC process. NCAPEC serves as the official coordinator of business activities for the 2011 APEC Meetings. National Center membership is limited to U.S. corporations. The National Center also functions as a conduit for U.S. businesses into APEC by serving as the Secretariat for the three U.S. executives who are appointed members of the APEC Business Advisory Council.  Learn more.

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