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Arequipa ServicesThe 5th Public-Private Dialogue on Services was co-organized by the 2016 APEC SOM (Senior Officials' Meeting) Chair's Office of Peru and PECC as follow-up from previous meetings held in Surabaya, Clark, Boracay, and Cebu. 

Given the dominant role of services in GDP and employment in all APEC economies, raising productivity growth, alleviating poverty, and impvoing inclusivity of women and MSMEs (micro, small and medium enterprises), APEC Services Cooperation Framework was adopted by the Leaders in November 2015. The dominant role of services in FDI flows stands in comparison with a traditional under-performance in trade terms, reflected also in a below global average services value added content in gross APEC exports. 

In the 2015 APEC Leaders' Declaration (Annex B), the Leaders recognized "the rapid changes taking place in the delivery of services, such as through digitally-enabled trade. To boost services trade and investments in the region, APEC needs to further deepen and build momentum in its work on services." 

"We have explored ways to further deepen cross-fora collaboration on services such as through the first joint meeting of the Economic Committee, the Group on Services, and the Pacific Economic Cooperation Council (PECC) on Regulatory Reform and Services held in 2015. The Public-Private Dialogues on Services, initiated by Indonesia in 2013, were undertaken in cooperation with the APEC Business Advisory Council (ABAC) and PECC, to broaden the base for consultation. These dialogues stressed the value of intensified focus on services and facilitated the sharing of regulatory experiences and challenges, as well as generated views on ways to improve services competitiveness taking into account APEC economies’ circumstances."

The ongoing series of PPDs aim to prepare the ground for the new APEC Services Competitiveness Roadmap, to question and review the current state of play of the services sector as well as establish an empirical base for an appropriate regional strategy. The discussions at the 5th PPD on services focused mainly on three inter-related issues:

1) knowledge economy infrastructure (including the stock of human capital and the educational and training needs associated with a shift into services);
2) innovation and the potential for services technologies to change our economies, indeed to change our lives, and the role of structural change and regulatory review-reform; and
3) greater openness to trade and investment, at the border and behind the border.  

Without a collective action plan, inter-connectivity and inter-operability will remain inadequate and we will be missing out on the unprecedented growth opportunities that new technologies are able to bring. Some of the important and urgent issues are having to reduce regulatory compliance costs on firms and improving efficiency by removing opaqueness, duplication, overlap and inconsistency in services regulatory regimes. At present, compliance costs disproportionately impact on smaller firms with disadvantages in resources. What needs to happen is that regulation in services need to move from a risk management-oriented approach to a more business enabling mindset. The perennial importance of enhancing trade and investment at the border, to flows of goods, services, capital, people, ideas, and data was also highlited at the PPD held in Arequipa in conjunction with the APEC trade ministerial meeting. 

A summary report can be downloaded here.

 

Thomas LembongIndonesia’s Minister of Trade, Mr. Thomas Lembong stressed the importance of public process and communications to explain the benefits of trade to “men and women on the street” in very simple terms without which there will not be public support for regional economic integration. He was speaking at the concluding panel discussion on the opportunities and challenges for regionalism in view of AEC, RCEP, and the TPP during a conference co-organized by the Pacific Economic Cooperation Council (PECC) and the Jakarta Post on 25th April.

ASEAN Secretary-General Mr. Le Luong Minh said in his keynote speech, “With the establishment of ASEAN Community last year, ASEAN, through its Vision 2025, has embarked on a new phase focused on consolidating gains from last fifty years’ work, addressing the existing and emerging challenges of the next decade.” He said that the ASEAN Vision 2025 was also complementary to the United Nations 2030 Agenda for Sustainable Development.

At the end of 2015 in Kuala Lumpur, ASEAN leaders adopted the ‘ASEAN Vision 2025’ which looks forward to an ASEAN Economic Community (AEC) that is highly integrated and cohesive; competitive, innovative and dynamic; a people-centered and people-oriented community that is also integrated with the global economy. In order to maximize gains from the AEC, ASEAN policy leaders must engage a broader public, those who remain unaware of, and question the benefits of integration.

The former Trade Minister of Indonesia, Dr. Mari Pangestu said that “New drivers of growth and productivity should come from regional economic integration and this goes beyond having a single ASEAN market,” she said. Emphasizing on the importance of building domestic consensus, she urged, “Media needs to do more to educate the public on the benefits of ASEAN economic integration.”

PECC Co-Chair Ambassador Tang Guoqiang said, “A full-fledged AEC relies on the joint efforts of both ASEAN and other economies in the region in completing the supply chains, the production network and the value chains, in enhancing connectivity-building and financial cooperation, and in promoting the RCEP negotiation process.”

While much progress has been made on poverty eradication in ASEAN, gaps in wealth distribution and technology have widened over the years. The number of natural disasters associated with climate change and their damages have risen in recent years. The Paris Agreements are a major breakthrough in responding to climate change challenges but there is much more to do in terms of behavioral and mindset changes to actually slow down the environmental degradation. Dr. Soogil Young, former Chair of Presidential Committee on Green Growth of Korea suggested that economies in the region adopt green growth strategies to build climate change mitigation into national development plans.

With the above backdrop, a couple of multilateral milestones were achieved recently: the official formation of the ASEAN Economic Community (AEC) on 31 December 2015 that brings together ten markets with a population of 622 million people and a total GDP of US$2.6 trillion; and the conclusion of the longstanding Transpacific Partnership (TPP) agreement negotiations tying 12 Asia-Pacific economies including four ASEAN members.

Mr. Jusuf Wanandi, Publisher of the Jakarta Post and former Co-Chair of PECC, said that the PECC-Jakarta Post conference on April 25th was designed to convene thought leaders from the region’s prominent business and media entities including chief editors to consider these challenges and the roles they need to play in the new environment. “We have organized this conference, ‘Global Challenges and Regional Solutions: Engaging stakeholders’ in Jakarta to think about what comes next after the launch of AEC and the conclusion of TPP negotiations,” he added.

PECC Co-Chair Ambassador Don Campbell said, “Today, the public is heavily engaged in public policy debate through social media and government is increasingly held accountable. The risk is having public policy driven by not what is right but what is popular. We need to make ‘what is right,’ ‘what is popular.’ Media’s role is very important in that sense.”

Aside from the economic, two other pillars of the ASEAN Community encompass the political-security as well as the socio-cultural areas. In his keynote speech to an audience of about 200 attendees, Mr. Hassan Wirajuda, former Foreign Minister of Indonesia said that countries have become more perceptive to including political development into the regional agenda although it remains “an uphill battle.” He said, “Regions need to promote political dialogue. Economic discussions have often overlooked political and security dialogue.”

Much of the Asia-Pacific’s growth over the past three decades has been driven by exports. With trade growth anemic, other growth engines need to take its place. Initiatives are underway that could promote more efficient cycling of funds into core growth boosting activities in infrastructure such as the Asian Infrastructure Investment Bank (AIIB) while technological innovations made in the e-commerce sector and financing mechanisms such as ‘fintech’ and crowdfunding can help to unleash the potentials that exist in the world’s most populous region.

The Conference was held in conjunction with the 33rd anniversary event of the Jakarta Post. 

Program agenda and presentations

Related press release

Related news reports

SOTR 2015 release 1

The Asia-Pacific Leaders gathered in Manila for the annual summit should focus their discussions on ways to ensure that more people are part of growth in the region, according to PECC survey of opinion-leaders, results of which were released at a press briefing on November 16th 2015 in Manila, during the APEC Leaders' Week. According to the State of the Region 2015-2016 report, the region will grow at 3.2 percent this year, the slowest rate since the Global Financial Crisis of 2008-2009.

According to Asia-Pacific opinion-leaders who participated in the annual PECC survey, the top five risks to growth in the region are:
- A slowdown in the Chinese economy
- Failure to implement structural reforms;
- Lack of political leadership;
- A slowdown in the US economy; and
- Lack of adequate infrastructure.

The PECC annual survey was conducted during 21 September-16 October 2015, drawing responses from 710 individuals.

Some key questions covered in the survey were:

1) What are the biggest risks to growth?
2) How important are the following areas of structural reform to the future growth of your economy?
    (e.g. education and labor; infrastructure; regulation; rule of law; etc.)
3) How do you assess the political environment for freer trade in the coming five years?
4) What should be the top priorities for APEC Leaders to address in Manila?

The State of the Region report is an annual statement of PECC’s views on the major developments affecting Asia-Pacific regional cooperation. The report contains a broad overview of economic state of relations and other issues as they relate to economic state of the region. It contains results from its annual survey of opinion-leaders of perceptions on key developments in the region and priorities for APEC. It is useful for gauging converging as much as diverging perceptions of stakeholders from business, government, and the research/ media/ civil society. The Report also includes an update to the index of regional economic integration which tracks de facto integration of each Asia-Pacific economy with the region based on various criteria.

Related press release

Related news reports

 

SAM 2283Development of efficient ports and optimizing maritime routes are key elements to harnessing opportunities from and facilitating international trade, enhancing connectivity and boosting economic growth in the Asia-Pacific region and beyond.

Following up from the inaugural seminar on 'Managing the Blue Economy' international project held in Papeete, French Polynesia, the second seminar focusing on ports and sustainability was held in Busan, Korea in partnership with the Korea Maritime Institute (KMI). The project is undertaken against the backdrop of a considerable shift in the shipping industry, which, after years of growth, is experiencing stagnant trade volumes, and in awareness of global environmental issues, accelerating efforts to enhance environmental-friendly productivity and beautification. The seminar addressed environmental challenges and risks such as climate change concerns and pollution at ports. It also looked at economic challenges in light of increasing size in vessels which necessitate upgrading or relocation of ports, pollution at ports and sea, best practices in increasing energy efficiency at ports and ships while keeping them green. 

World seaborne trade has increased steadily to 9.8 billion tons in 2014 and currently there are more than 50,000 registered merchant vessels in operation. To cater to the growing volume and dependency on sea transport, vessel sizes have continued to increase dramatically over the last decade and as a consequence, there has been a cascade effect on the deployment of mega and large-sized vessels. With large vessels now operating at major sea routes, structural adjustments are demanded of ports, especially among the larger ones which must compete fiercely to become or remain regional hubs. However, increasing vessel size is no longer very economical post-2007; ships are already consuming minimum fuel with slow-steaming technology. Port upgrades have huge upfront cost implications and multiple considerations need to be factored into such decision-making process.  

In respect to green initiatives and standards at ports, while they are important and have long-term benefits that go far beyond ports, if environmental criteria and rules become too stringent, ships would rather divert to more non-compliant and cheaper ports for short-term gains. Hence, shared commitment and action followed by sustainable business practices are essential, in order to prevent compromise of port standards for competitive reasons. 

This project consisting of a series of three seminars in different PECC locations over 2015-2016 is led by the France (Pacific Territories) Committee for PECC (FPTPEC) and other member committees of PECC.

Program agenda and presentations for download 

Executive summary

PECCGM23 logo-small

The Philippines PECC committee hosted the 23rd General Meeting of PECC in Manila with the theme, "Growth Engines for the 21st Century: Achieving Balanced, Inclusive, and Sustainable Growth." 

Following are the plenary and concurrent sessions of the General Meeting:

Plenary Session 1: Sustainable and Inclusive Growth in the Asia-Pacific Century

The 21st century was touted as the Asia-Pacific century, 15 years on with the fallout from the Global Financial Crisis still bearing over the world economy, what will the drivers of growth be in the coming 5-10 years? The structural changes taking place in major economies such as China, Japan and the United States, the growing constraints on the supply of resources and environmental concerns will have a profound impact on prospects for growth for the entire region.  On the other hand, the broader adoption of new technology and new ways of conducting business may provide solutions and opportunities for growth. What role for policy reform and regional cooperation to facilitate new growth engines?

Plenary Session 2: Challenges of Promoting Inclusive Growth

Over the past 35 years the world has witnessed an almost unprecedented increase in the creation of wealth and a reduction in global income inequality. Since 1970, the share of global income of the richest countries has gone down from 87 percent to 74 percent and the average global income has doubled from around US$4,000 to close to US$8,000. However, income inequality within economies has also been on the rise. What can be done to ensure that the next phase of growth is more inclusive?

Plenary Session 3: Mega-Regionals and the Future of the Trade System

When the Philippines last hosted APEC in 1996, there were relatively few preferential trade deals among regional economies. Since then, driven by the stalling of the WTO Doha Round and impatience from the business community the trend has been towards bilateral and regional trade deals. Some of these are being consolidated in the form of the Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership (RCEP), and the Transatlantic Trade and Investment Partnership (TTIP). Is it now time to work towards the convergence of these agreements as suggested by a panel of experts convened by former WTO Director General Pascal Lamy?: "We recommend that WTO members engage explicitly in an exploration of ways in which preferential trade agreements and the principles underlying them could increasingly converge with the multilateral system."

Concurrent Sessions:

  • Mining and Natural Resources
  • Principles for Promoting Resilient Economies
  • The Role of Micro and Social Enterprises in Promoting Inclusive Growth
  • The Internet Economy

Plenary Session 4: The Role of Regional Financial Cooperation in Promoting Economic Growth

While the Asia-Pacific region and especially East Asia have become increasingly integrated through trade, intra-regional financial flows are more limited. What steps can be taken to promote the efficient recycling of capital through the system to promote innovative, inclusive, and balanced growth in regional economies? Will we see increased use of local currencies in settlement of trade and financial transactions?

Plenary Session 5: Connectivity: Challenges for Global Value Chains

While regional policy-makers remain broadly supportive of free trade, and global value chains offer a quick way for economies to enter the trading system, international trade remains limited to the region's cities and large companies. What are the priority issues that need to be addressed to ensure that more of the region's small and medium enterprises can engage in international commerce? How can we strengthen the services sector to promote greater participation in global value chains? What strategies can second and third tier cities pursue to benefit from globalization and integration?

The GM was preceded by the PECC Standing Committee meeting on the 10th and followed by a workshop on FTAAP (Free Tree Area in the Asia-Pacific) in the afternoon of the 12th.The FTAAP Workshop covered the state of play in regional trade agreements as well as how value chains might be mapped in the region in addition to work done so far by APEC on FTAAP and what PECC could do to further contribute to the study. 

As part of PECC's Next Generation Program, selected youth delegates from participating member committees were invited to attend the GM and parts of the Standing Committee meeting.

For further information, refer to: www.pecc.org/pecc23

Download presentations from the GM 

President Benigno S. Aquino's speech

Aquino cites human investment as key to inclusive growth (Philippine Information Agency)

Related news clippings

Related press release: Achieving Resilient and Inclusive Growth 

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Pacific Currents

Digital Technologies, Services and the Fourth Industrial Revolutions
Submitted by Jane Drake-Brockman, Christopher Findlay, Yose Rizal Damuri and Sherry Stephenson 


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