Fact Sheet: APEC Overview and Background
(APEC seeks to promote economic cooperation in region)

Following is the text of a State Department fact sheet that provides an overview of the Asia-Pacific Economic Cooperation (APEC) forum:

FACT SHEET: APEC OVERVIEW AND BACKGROUND

The APEC forum was established in 1989 to promote economic cooperation and integration in the Pacific region. The United States was a driving force behind APEC's creation, as a means of anchoring the United States more firmly in the region in the post-Cold War era. APEC subsequently grew to 21 members, called "economies" because Taiwan (called Chinese Taipei in APEC), Hong Kong, and China are equal members of APEC.

The twenty-one members of APEC are Australia; Brunei Darussalam; Canada; Chile; People's Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; Republic of the Philippines; Russia; Singapore; Chinese Taipei; Thailand; USA; Vietnam

The dynamic of APEC as a ministerial-level organization changed dramatically in 1993 when the United States invited member economies' leaders to Blake Island, instituting the annual Leaders Meetings. Leaders called for continued reduction of trade and investment barriers, envisioning an Asia-Pacific that promotes prosperity through cooperation.

From 1994-96 APEC was devoted to formalizing the Leaders' vision for free and open trade. Leaders at Bogor, Indonesia set the goals of reaching free trade and investment by 2010 (for developed economies) and 2020 (for developing economies). The next year they adopted the Osaka Action Agenda (OAA), a blueprint for implementing the Bogor Goals through the three pillars of trade and investment liberalization, business facilitation, and economic and technical cooperation. In Manila (1996), Leaders adopted the mechanisms of Individual and Collective Action Plans to achieve the Bogor Goals.

Since 1997 APEC's focus has been on OAA implementation, but with mixed results. The 1997 targeted-sector approach to reducing trade barriers (Early Voluntary Sectoral Liberalization, or EVSL) has produced some gains but has remained controversial. In 1998-99, APEC helped Asian economies "stay the course" of reform during and just after the Asian Financial Crisis, by promoting financial stability and reducing vulnerabilities to crisis through structural reforms and sound economic policies. However, not all viewed APEC's response as timely or effective. In 1999, APEC made efforts at Auckland to reinvigorate its role in multilateral trade liberalization by issuing a strong statement on the WTO. The subsequent failure to launch a new WTO Round at Seattle, however, has led to questions about APEC's ability to move forward on trade and investment liberalization. In 2000 under the Brunei chair, APEC focused on information technology and called for a tripling of Internet access by 2005. In its "Action Agenda for the New Economy," Leaders pledged a mix of market-based policies and capacity building actions to help transform the region through greater development and use of information technology.

APEC developing economies believe that liberalization has been over-emphasized in the APEC agenda. While still committed to the Bogor Goals, developing members want economic and technical cooperation, including human resource development and capacity building, reinforced as an equal pillar in the APEC agenda. Organizationally, APEC has approximately 16 special committees and working groups, whose work is overseen by Senior Officials. In 1995, APEC established a business advisory body, called the APEC Business Advisory Council (ABAC), which consists of three business executives from each member economy. The U.S. ABAC representatives are Paul Song, Chairman of Aris Corporation; Ernest Micek, former Chairman of Cargill; and Sy Sternberg, Chairman of New York Life Insurance Company. With Mexico, Thailand, Chile and Korea lined up to chair APEC through 2005, the U.S. and like-minded economies will face a continuing challenge of keeping APEC's liberalization agenda on track while addressing technical cooperation needs.

FACT SHEET: WHY APEC MATTERS TO AMERICANS

Fact Sheet: Why APEC Matters to Americans
(APEC promotes economic reform, rule of law in Asia-Pacific)

Following is the text of a State Department fact sheet on the importance of the Asia-Pacific Economic Cooperation (APEC) forum to Americans:

In 1989 when former President George Bush was President of the United States the Asia-Pacific Economic Cooperation (APEC) forum was established to promote economic integration around the Pacific Rim and to sustain economic growth. APEC currently has 21 members: Australia; Brunei Darussalam; Canada; Chile; People's Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; Republic of the Philippines; Russia; Singapore; Chinese Taipei; Thailand; USA; Vietnam.

The United States, recognizing the value of top-level meetings to advance the work of creating a Pacific community, invited member economies' leaders to Blake Island, Washington, to meet informally to discuss major issues in the APEC region. This gathering of economic leaders has become the single most important institution in the Asia Pacific region. It brings top level attention to APEC's vision of free trade and investment as well as providing a forum for Leaders to meet on a regular basis both as a group and bilaterally to discuss current issues and resolve disputes.

The economic health of the APEC region is vitally important to America's continued prosperity. Economic growth across the APEC region waned this year, largely in response to the slowing US economy and the weakening global demand for many of the Asian members' exports (particularly electronics). Many members have lowered their 2001 growth projections in light of poor performance during the first half of the year, although most will still post positive results.

APEC is home to our biggest customers in the world, with a total of $500 billion in exports in 2000. APEC remained a powerful trading group accounting for about half of the world exports and imports. We in turn have played a critical role in Asian recovery, providing a market that bought nearly $700 billion worth of goods and services from other APEC economies last year.

APEC has played an important role in promoting trade and investment liberalization in the region. As a result of these efforts, APEC markets are considerably more open today than they were ten years ago, creating new opportunities for American business and creating new employment for American workers.

The challenge posed by the higher profile APEC launched at Blake Island was also widely seen as galvanizing a successful conclusion of the Uruguay Round Table negotiation by demonstrating an alternative path to liberalizing trade talks if global talks were to fail.

APEC has also played a complementary role to the International Monetary Fund and other international financial institutions in fostering a rapid Asian economic recovery. APEC encourages its members to pursue appropriate macroeconomic policies that stimulate domestic demand, and microeconomic polices to promote financial and corporate restructuring and attract investment. APEC is promoting increased transparency, openness and predictability based on the rule of law. APEC seeks to eliminate impediments to trade and investment by encouraging member economies to reduce barriers, adopt transparent, market-oriented policies and address such issues as unequal labor productivity, restricted mobility of business persons and outdated telecommunications regulatory practices.

APEC can serve a crucial role in advancing long-term projects and initiatives that will assist its members to reform their economies and implement the policy changes that will sustain the economic recovery. It also can help foster development of the physical and human capital necessary to sustain growth in the 21st century.

APEC also promotes discussion among Leaders and undertakes programs to assure that the social infrastructure exists to allow APEC economies to take advantage of trade and investment opportunities and that economic growth translates into real social progress. For example, APEC works to advance environmental and labor standards, improve basic education, fight disease, promote the growth and development of small business, and integrate women into economic life. APEC works directly with the private sector to produce results with broad benefits. Public-private collaboration on customs projects is becoming a model for the benefits that the public sector can derive from partnership with business constituents. Other public-private partnerships this year in APEC focuses on developing e-commerce and region-wide information technology training programs.

A revived Asia-Pacific region means more exports from and investments by U.S. companies, more jobs for Americans and more U.S. economic growth. APEC's motto could be "prosper thy neighbor." The United States is committed to ensuring APEC plays that constructive role.

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

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