2012_April_SINCPEC_Conference_DSCN2347Experts of the Asia-Pacific region who gathered for the annual Singapore conference of the Pacific Economic Cooperation Council (PECC) assessed that the region would see continued sluggish growth in the next 12 months. This is largely due to the Euro zone expected to remain in recession for the time-being while domestic consumption also weakens in emerging economies. The speakers mainly representing policy think-tanks and government sectors from around the region voiced concerns with the projection of advanced economies moving beyond 100% debt versus GDP ratio by 2013. The region rebounded quickly in the aftermath of 1997-1998 financial crisis helped by strong export-led growth particularly seen in developing economies but it may not be the case this time. 

The speakers at the conference held on April 26-27, 2012 said that the region’s policy-makers needed to think carefully about ways to improve fiscal stability and that it required a certain paradigm shift. Professor Wang Gungwu, Chairman of the Governing Board of Lee Kuan Yew School of Public Policy and Chairman of the East Asia Institute, National University of Singapore, reiterated through his opening address that the recent financial crises that engulfed mainly “the American and European economies are the result of weak leadership and governance failure.” “Leaders would need the political will and courage to push for real change” and “this may involve a paradigm shift through which deep structural reforms are made,” he said. 

Mr. Jusuf Wanandi, Co-chair of PECC and Chair of Indonesian National Committee for Pacific Economic Cooperation (INCPEC) emphasized: “There are new challenges facing the region and we must adjust to this environment. For example, Myanmar is emerging from its seclusion and we should be prepared to engage them in the broader Asia-Pacific platform.” 

The agenda for regional cooperation is also changing. There is an increasing realization that the regional agenda is now taking on more complex but much needed human and social issues such as healthcare. To promote inclusive growth, healthcare is a pre-requisite not just in terms of the numbers of doctors or hospital beds but also in terms of education, sanitation and income. We also need to reconsider the ways in which incentives are given. As expressed by Professor Ranga Krishnan, Dean of Duke-NUS Graduate Medical School of Singapore, doctors get paid based on the number of patients they see and hospitals get paid for the number of patients they admit. People need to be equipped with knowledge to make informed choices and service providers should be incentivised to offer the most appropriate and quality care. 

As part of its own efforts to promote trade liberalization the region is experimenting with various frameworks such as AEC (ASEAN Economic Community), ASEAN+ and the broader Asia-Pacific-centric initiatives such as TPP (Trans-Pacific Partnership), and EAFTA (East Asia Free Trade Area). The TPP has seemingly made the most progress having completed 11 negotiating rounds but the issues left are also perhaps the most difficult. Despite a wide range of different initiatives, there was a sense that these were all useful pathways towards the ultimate common goal of achieving a free trade area in the Asia-Pacific.

“The SINCPEC conference is a prelude to the APEC meetings to be held in Vladivostok, Russia in September this year,” said Associate Professor Tan Khee Giap, Chair of Singapore National Committee for Pacific Economic Cooperation (SINCPEC). “And the objective of this conference was to provide ideas and suggestions on some of the major issues that leaders of the Asia-Pacific region need to address at this critical juncture,” he added. 

The Russian Ambassador to Singapore, Leonid Moiseev reiterated that Russia attaches great importance to strengthening its relevance in the Asia-Pacific region and that “Russia’s chairmanship in APEC is aimed at promoting the domestic economy integration into the system of economic ties in the Asia-Pacific for the sake of modernization and innovation-driven economic development.”  He said that while there is no “magic bullet” for social reforms as seen through the experiences of other economies around the world, it was essential to launch and activate new drivers of economic growth in Russia.

The plenary sessions focused on concurrent trade liberalization efforts, ways of nurturing Asia-Pacific growth, potential structural changes, as well as functional cooperation needed in areas such as food security, energy security, and new technologies in infrastructure and connectivity with views to secure regional growth. The wide range of discussions held at the SINCPEC conference set the scene for the PECC Standing Committee meeting which immediately followed, where members deliberated on the future role of the organization and its relevance to the region.

Download program agenda (pdf, 56KB)

MonetaryPolicyRegimeThe first PEO (Pacific Economic Outlook) Structure group meeting of the year on monetary policy regimes took place in Osaka, Japan, during March 17-18, 2012, hosted by the Japan committee for PEO. Following the previous topic of Macrofinancial Linkages and Financial Deepening, this project is to scrutinize monetary policy regimes and their effects on macroeconomic performance in advanced and emerging economies in the Pacific region. In the context of advanced economies, rule-based monetary policies represented by inflation targeting have been pursued and spread among them. But they failed to prevent the global asset market bubble bursts. In emerging and developing economies, giving up virtual dollar peg exchange rate systems, they have been recommended to adopt another nominal anchor, i.e. inflation targeting with flexible exchange rates and freer capital movement. But they are now confronted by volatile international financial flows and exchange rate risks, which may impact their long-term growth paths in a non-negligible way.

With the continued global economic downturns, we are witnessing small and large scale shocks on banking sectors and securities markets of both developed and emerging market economies.  The aim of the project is to examine the degree of resilience of the regional financial architecture to the crisis. Following agenda will be covered throughout the two-year project:

1. The recent financial crisis has seriously affected domestic financial systems and macroeconomic developments in the region. How well or not have the policy authorities coped with the situation? 
2. Based on the above assessment, should we or not change the framework of monetary policy management or monetary policy regimes in terms of monetary policy independence, exchange rate stability and capital mobility? If so, how; if not, why not?
3. How will be the regional financial cooperation be affected and what can be done to strengthen it?

Please refer to the program agenda and contact JANCPEC for more information:

Japan Committee for Pacific Economic Outlook
Email:  This email address is being protected from spambots. You need JavaScript enabled to view it.
Tel:    +81-6-6441-5750
Fax:    +81-6-6441-5760 

PFSO_food_securityMoving beyond Market Volatility to Foster Food Security, Taipei, December 1-2, 2011

This conference was sponsored by the Chinese Taipei Pacific Economic Cooperation Committee and took place during December 1-2, 2011 at the Riviera Hotel in Taipei. (Program agenda with individual presentations for download)

The goal of this conference was to explore the global issue of food security with particular attention to implications for the Asia Pacific. How policy affects food security and may need to adjust or be implemented differently will be of particular interest. Speakers from various sectors were invited to address the underlying causes of price instability, and how to foster resilience and food security by building sustainable agricultural-food systems to better serve the future needs of consumers, producers and the entire food chain.

The participants examined pragmatic policy options to deal with the numerous elements of food security while helping to accelerate economic growth, social progress and environmental quality. The aim of the project was also to look for ways to enhance coordination and cooperation on APEC and international policies to address food security as an important element of individual security in the broader context. 

Food security is not a challenge that countries can adequately address individually. Regional cooperation and an open APEC food system utilizing the strengths of trade and private sector involvement are the approaches with the most promise to address the many facets of food security.  Regional dialogue and involvement of the range of private sector, nonprofit organizations and think tanks, and the academic community can set the stage for a PECC-driven regional plan for collaboration and cooperation to assure food security in the Asia-Pacific region and internationally in today’s global economy. This can then lead to guidelines or a framework in which individual economies operate internally, but consistent with region-wide food security.

The business community must be an integral part of developing a food secure region. The topics explored in this project will have implications for the business community engaged in food production, processing and marketing as well as for government policy.  Implications of the analysis will be drawn out for both the private and the public sectors, including areas in which joint efforts are likely to be most productive. 

Initially set up with funding from PECC more than ten years ago, Pacific Food System Outlook (PFSO) has long focused on identifying policy implications for the APEC/PECC region’s economies collectively and individually for the topics addressed.  These may be couched in terms of recommendations for consideration by policy leaders and provide a strong framework for dialogue within the region to develop a set of policies consistent with food security. The discussion in Taipei will provide valuable ideas as PECC assumes a more assertive role in a dialogue that goes beyond the region in the current global economy and complements and invigorates policies proposed by those representing other regions and global institutions. PECC has an important role to play in making certain that the region is not neglected in the broader discussions.

039The second seminar of PECC International Project on marine resources took place in Hawaii, USA, focusing on ocean as source of renewable energy (March 26-28, 2012). Representatives from government, research institutions, and relevant marine renewable energy industries have contributed to the seminar to share some of the innovative ways to optimize usage of marine resources and on ways to achieve an integrated, sustainable approach in managing natural resources in the ocean. Technologies were available; taking the innovation to work in marketplace was the biggest existing challenge, needing sizable companies to buy into, and invest in the new technologies. Experiences with ocean thermal energy conversion (OTEC), deep seawater air conditioning, wave energy, tidal energy, microalgae energy and their prospects were discussed in length during the seminar through case studies. 

Program agenda (pdf, 177KB)

Executive summary (pdf, 30KB)

Presentations available for download 





[photo courtesy of the APEC Secretariat,]


Statement to APEC Ministers Responsible for Trade

Big Sky, Montana, 18-19 May 2011

Dr. Charles E. Morrison

Co-chair, Pacific Economic Cooperation Council


Thank you for this opportunity to talk to you about our views on trade and regional economic integration in the Asia Pacific region. Founded in 1980, our organization, the Pacific Economic Cooperation Council is a forerunner of APEC. While our footprint is much the same as APEC’s, our membership is broader, drawing on experts from business, government, and civil society.

We establish task forces to focus on issues we believe of importance to the promotion of regional cooperation in the Asia Pacific region.

Post-2010 Trade Agenda for the Region

Two years ago we established a task force to consider the trade policy challenges facing the region post-2010. The view of the task force was that 2010 was a watershed year as a result of the systemic changes wrought by the financial crisis; the 2010 Bogor Goal deadline; and the widely held view that the Doha Development Round would need to be completed by this time. The task force considered trade policy challenges for the region at two levels: the multilateral and the regional. This statement is largely based on the work of that task force.  

The World Trade Organization

When our task force met there were hopes that the sequence of high-level meetings at the end of 2010 would give the political impetus to reach a conclusion in the Doha Round. Strong statements of support in both the G20 and APEC meetings stimulated renewed efforts in early 2011 but this has now given way to a profound sense of despair as it has become apparent that leaders in the major economies are not prepared to spend the political capital necessary to complete the Round. Under these circumstances we frankly doubt the value of statements of support for the Round that are not backed up by concrete demonstrations of a clear intent to constructively address the key issues.

Need to Emphasize Institutional Value of WTO

We are especially alarmed at how quickly the view appears to be gaining ground even among the strongest supporters of the WTO system that the latest developments in the Doha Round threaten the very viability of the WTO as an international institution. We therefore wish to emphasize the vital importance of the WTO in today’s global economy not only as a venue for trade negotiations but also as an international treaty through which its members agree to abide by the rules of the game and as an international organization providing a venue for dispute resolution. These latter functions will be increasingly important in the international trading system as it confronts the formidable challenges that loom in the future, such as those posed by demands for carbon tariffs as part of the policy response to climate change, or the threat of increasing use of both import and export restrictions in the name of food security.

Trade in Services

One area of trade that offers enormous potential for gains in global as well as regional welfare is trade in services. The services sector now accounts for 68 per cent of value-add in the Asia Pacific region making it the biggest sector in the regional economy. However, while services have come to dominate the modern economy, international trade in services lags behind. Exports of goods from APEC member economies are 5 times larger than exports of services.

This points to large benefits that can be reaped by new thinking about services trade.  We note the increasing gap between commitments made in bilateral and regional trade agreements and the WTO, although this is still fairly limited across the APEC region. A key conclusion from our trade task force is that the current approach to services trade liberalization is simply not working.  It was noted that services offers on the table in the Doha Round contain “not one iota” of genuine liberalization in the form of new market access, and that some members still appear unprepared to enter into commitments binding current levels of liberalization.  It was also emphasized that the modalities currently being used for services trade liberalization are not seen by business as meaningfully connected with the way that services trade is structured and conducted in reality. We have established a task force with the Asian Development Bank Institute to consider these changes and consider innovative ways in which services trade can help deepen economic integration in our region. Our work will bring together experts from business, government, the research community and regional and multilateral institutions including the WTO, World Bank, OECD, and ASEAN. We will present our findings to you at SOM 3.

Food Security

Another area we addressed in this project is food security. The international food economy faces a range of formidable challenges, including increasingly frequent supply disturbances caused by natural phenomena, increased pressure on key resources such as water and fisheries, competition for land from energy-related demands for biofuel, changing demand patterns reflecting demographic changes and rising incomes, and associated requirements for major improvements in agricultural productivity and heightened concerns over food safety. Well-functioning international markets have a key contribution to make to enhancing the security of food supplies to the global community.

The diversity in our region offers a unique environment to caucus on food trade issues and food security issues, exploring how more open trade in agriculture can contribute to more stable and secure food supplies at the same time as we search for politically palatable solutions to the Doha impasse. 

A more comprehensive approach is clearly needed to these issues. One example of the new elements that need to be embraced in such a comprehensive approach is an agreement to refrain from export restrictions which could do far more for global food security than trying simply to address a symptom of the problem such as by creating food reserve mechanisms.

Regional Economic Integration

There is no doubt that the region is becoming increasingly integrated. Our index of economic integration tracks this process across a number dimensions and demonstrates that flows in goods, investment and people are increasing throughout our entire region.

There are two main processes being pursued for policy-led integration in the Asia-Pacific: the ASEAN plus agreements and the Trans-Pacific Partnership. Our task force discussed both platforms during their deliberations last year.

Pathways to a Free Trade Area of the Asia Pacific (FTAAP)

When we undertook a study on the Free Trade Area of the Asia-Pacific (FTAAP) with ABAC in 2006, we noted that a high-quality agreement would be desirable but that the region faced complex political economy questions. We recommended APEC adopt a building block approach which should include deepening the WTO, aligning existing free trade agreements, extending outreach, and undertaking organizational reforms.

Our annual survey of opinion-leaders conducted in 2010 reflected a degree of ambivalence on the pathways available to pursue an FTAAP, with around 36 per cent of respondents preferring the TPP path and 38 per cent preferring the ASEAN plus agreements. However, when asked if regional economic integration should be pursued on multiple tracks, close to 70 per cent of respondents were in agreement.   We note that APEC leaders have given equal endorsement to each of the possible paths – ASEAN Plus Three (EAFTA), ASEAN Plus Six (CEPEA) and TPP. Our trade task force has analyzed the progress to date and prerequisites for further progress in each of these paths.

The Missing Link in ASEAN Plus Approaches: China-Japan-Korea

One critical element missing from both ASEAN Plus proposals is a commitment to economic integration among China, Japan and Korea. Among the three, there have been various studies and attempts to negotiate an agreement. Bilateral initiatives between Japan and Korea and between China and Korea have made varying degrees of progress at different times. On a more positive note, agreements on the rules of origin signed by East Asia’s three biggest economies are showing a degree of convergence especially in their deals with developed partners. We have no doubt that a decision to move ahead on economic integration among China Japan and Korea would impart a powerful impetus to the dynamic of integration both among the ASEAN Plus participants and across the Asia-Pacific region as a whole.

The Trans-Pacific Partnership

The aforementioned PECC-ABAC 2006 study also looked at the then nascent P4 agreement as another pathway to FTAAP now known as the Trans-Pacific Partnership (TPP). Momentum has been gaining on the TPP pathway since 2006 with nine APEC member economies including the United States now negotiating the expansion of the agreement beyond the original four.

Although it is a newcomer to the equation, the TPP is now into its sixth round of negotiations. It is an ambitious effort to address old trade policy issues in a 21st century way as well as address next generation trade policy issues.

The work ahead cannot be underestimated, but significant results (even if not a final agreement) by the November APEC meeting are possible.  This would send a welcome signal of the region's continuing pursuit of deeper integration and would represent a breakthrough in the consolidation of bilateral and plurilateral agreements.

If the TPP is to be an effective pathway to the FTAAP. It is crucial that the agreement should be designed with a view to the eventual inclusion of all APEC economies, even not all are ready to make the adjustments needed to join now. Inclusiveness should not be sacrificed to the narrow pursuit of the interests of individual participants.  

Next Generation Trade Issues

We note with interest the effort being made by APEC to address regulatory issues and other behind the border issues. We believe this work will have great support from our community. In our annual survey, the top impediments to doing business in the region were: poor intellectual property rights protection; multiple standards for products and services; and regulatory impediments.

SMEs and RTA/FTA Utilization

We welcome the holding of a join session between Ministers Responsible for Trade and Ministers Responsible for Small and Medium Enterprises. We hope this dialogue will shed light on the difficulties our region’s SMEs have in entering global chains and promoting the most efficient use of resources. This initiative is critical to broadening domestic support for the trade liberalization.

Studies by PECC and others show that the utilization rate of RTAs/FTAs is low especially by SMEs. However, data is uneven and analysis is more anecdotal than based on hard facts. There are two concrete initiatives APEC could adopt in this regard: the first would be to consolidate existing data to give policy-makers a better understanding of the challenges SMEs face in using preferential agreements; and the second would be to encourage all APEC members, perhaps through a pathfinder agreement at first, to ask customs agencies to collect data on usage and obstacles to usage.

Expanding the Constituency for Asia Pacific Cooperation

In these challenging times for regional and global cooperation, there is an urgent need to proactively reach out to stakeholders. We stand ready to help in this effort through our member committees. Our member committees organize events throughout the year on various issues related to Asia-Pacific cooperation. For example, immediately after this meeting our US committee will hold its annual Washington Conference, just a week after these meetings our China Committee is holding the bi-annual PECC trade and investment fair in Tianjin and at the end of June our Singapore Committee also be holding a conference on the challenges facing APEC economies.

The Asia-Pacific and the Global System

Much has been made in recent months of the shift in the global economy towards the Asia-Pacific region. Both PECC and APEC were created in recognition of the increased interdependence within our region as well as its increased weight as a whole in the global economic system. We hope that this regional community will as represented here will take up both the benefits that this shift brings as well as the responsibility as a steward for the global economic system.

Download the PECC Statement to APEC MRT

Download the PECC Statement to APEC SOM2

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Pacific Currents

Digital Technologies, Services and the Fourth Industrial Revolutions
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