"Critical Issues from the 2007 APEC Summit:
Climate Change, Credit Crunch, and Transpacific Free Trade"

Remarks by
Ambassador Patricia M. Haslach
U.S. Senior Official, Asia-Pacific Economic Cooperation

Asia Society, New York City
October 31, 2007

Sixty percent of U.S. exports.

Sixty percent of world GDP.

Fifty percent of global trade.

Forty percent of the world's population.

You've heard it before, but it bears repeating. The Asia-Pacific region is the world's economic powerhouse. And APEC is its meeting place.

The U.S. is heavily invested in the Asia-Pacific and specifically in APEC. President Clinton inaugurated the APEC Leaders' Meetings in 1993. President Bush has attended every summit since taking office. When President Bush said that APEC was the key economic forum in the Asia-Pacific, he was stating a conviction that transcends administrations.

This year's meetings at Sydney took place against the backdrop of the stalled Doha Round. With Doha in the doldrums, the APEC Leaders' strong endorsement of the negotiations—they said, "we insist" on a consensus, strong language for a multi-lateral statement—is a powerful signal that key trading partners and WTO members still are committed to success in the Doha Round.

This year's meetings at Sydney continued the process of deepening APEC economies' commitment to regional economic integration. The Leaders' instruction to their officials to "examine options and prospects" for a Free Trade Area of the Pacific—FTAAP—was an advance over 2006 where FTAAP was but one of the "ways and means" to promote integration.

The APEC Ministers endorsed three more model Free Trade Agreement chapters for a grand total of ten. The model chapters, strongly endorsed by the business community, are intended to guide policy-makers choices when negotiating trade agreements. They are a partial response to the problem of proliferating trade agreements at least some of which actually serve to hinder, rather than facilitate, trade.

The new Trade Facilitation Action Plan which the Leaders endorsed should lead to a further 5 percent reduction in trade transaction costs by 2010. This is on top of the 5 percent reduction achieved between 2001 and 2006 in the first plan.

Also launched this year was the Cooperation Initiative on Patent Acquisition Procedures, a region-wide effort focusing on simplified patent procedures, examination cooperation, development of human resources to improve examination capability and computerization. This is in addition to strengthened protection for intellectual property rights, especially measures to prevent signal theft, by means of improved enforcement techniques and creation of new capacity building guidelines.

Still another new development was the region's first data privacy initiative, the Cross Border Privacy Rules system, which would allow data regulators to create an accountable system for moving personal information across the Asia-Pacific region. Google has called the APEC initiative a "global model."

Arguably the most important outcome of Sydney was in an area quite new for APEC, and not one of its areas of responsibility, namely climate change. The APEC Leaders' Declaration on Climate Change deserves close attention.

The Declaration is the first joint statement by both Kyoto-supporting and non-Kyoto-supporting economies on the risk to the climate posed by uncontrolled economic growth.

The Declaration provided valuable momentum for the series of climate change meetings that would follow, including UN Secretary General Ban's September 24 High-Level Event, President Bush's September 27-28 Major Economies Meeting (MEM), and the upcoming UN Framework Convention on Climate Change Conference of Parties meeting in Indonesia in December. The Declaration, like the MEM Final Chairman's Summary, was intended to—and I believe does—give strong support to the UN process making more likely an eventual agreement acceptable to all economies.

I would also point out—pace the critics of APEC as a "talk shop"—that fully half the Declaration on Climate Change consists of an Action Agenda. What's more, the Action Agenda contains energy-intensity and forest-cover targets that are no less real and specific for being "aspirational." In addition, the economies agreed to establish networks—the Asia-Pacific Network for Energy Technology and the Asia-Pacific Network for Sustainable Forest Management—to enhance capacity building, collaboration and information sharing in the energy and forestry sectors in the region.

Other eminently desirable aspects of the Declaration were the agreement of the economies to consider the region wide energy-intensity and forest-cover goals when devising their national plans, the commitment to submit to collective review of their progress toward reducing emissions and increasing energy efficiency, and to take steps to eliminate barriers to the trade in environmental goods. The last item in particular is important since APEC's greatest strength is as a vehicle for promoting trade liberalization.

Bottom line: The leaders and ministers at Sydney advanced toward the goal of "full and free" trade and investment in the Asia-Pacific region. On the way, they gave a strong boost to global free trade in the form of the statement on Doha and kicked off what could be a process leading to a genuinely global approach to tackling the problem of climate change. Not bad for a week's work.