APEC Leaders set directions for 1997

Prime Minister Jean Chrétien today welcomed the successful conclusion of the fourth Asia Pacific Economic Cooperation (APEC) Leaders' Meeting in the Philippines and the directions established for 1997.

"Today, we are an important step closer to APEC's goal of free and open trade," said the Prime Minister. "In less than one year, APEC has brought forward a solid package of individual and collective actions to improve market access and make it easier to do business in the world's most dynamic economic region. We have also fully engaged the private sector as a partner through our first meeting with the APEC Business Advisory Council."

In Subic, Leaders endorsed the Manila Action Plan for APEC (MAPA), which includes 18 individual action plans on liberalizing trade and investment that will be implemented from January 1, 1997. They provided strong support for the rules-based multilateral trading system by endorsing the conclusion of an information technology agreement by the first WTO Ministerial Conference in Singapore in December.

Leaders also agreed to improve individual action plans and to expedite customs clearance procedures and other concrete measures to facilitate doing business. They established six priority areas for strengthening economic cooperation, including human resources, sustainable development and the use of information technology, which will be implemented in partnership with the private sector.

In reviewing his plans as Chair of APEC next year, Prime Minister Chrétien said Canada will work closely with its partners to build on what was achieved in 1996 and fulfill the directions established by Leaders for 1997.

Canada will place emphasis on advancing trade and investment liberalization, business facilitation, economic and technical cooperation and dialogue with the private sector.

Emphasis will also be placed on involving youth and small- and medium-sized enterprises as well as on infrastructure development and addressing other issues that have an impact on prosperity, growth and employment in the region.

Ministerial meetings on the environment (Toronto, April), trade (Montreal, May), transport (Vancouver, June), energy (Edmonton, August) and small- and medium-sized enterprises (Ottawa, September) will help advance objectives in these areas. A symposium of academic, government and business will be convened to consider approaches to the environment, food and energy supply and population as they relate to sustainable growth.

Backgrounders highlighting this year's APEC meetings and APEC in Canada in 1997 are attached.

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Trade and Investment Liberalization and Facilitation

APEC Leaders endorsed the Manila Action Plan for APEC (MAPA). The central feature of the MAPA is the 18 individual action plans outlining members' commitments to liberalize and deregulate their economies. Implementation begins January 1, 1997.

Over the next year, Leaders agreed that the plans will be improved on an ongoing basis to ensure that they are comparable in their commitments and comprehensive in their scope. As Chair of APEC in 1997, Canada will oversee the review and implementation of these plans.

To reinforce business facilitation, Leaders instructed APEC Ministers to:

- expedite customs clearance procedures (to harmonize by 1998);
- ensure the effective implementation of intellectual property rights;
- enhance co-operation on customs valuation;
- facilitate trade in services; and
- enhance the environment for investments.

APEC Leaders provided strong support to the multilateral trading system by endorsing the conclusion of an information technology agreement by the first WTO Ministerial Conference in Singapore in December.

Leaders welcomed Canada's offer to convene a meeting of APEC trade ministers in May 1997 in Montreal to advance the pace of individual and collective efforts to liberalize trade and investment, to reinforce business facilitation programs, and to advance ongoing work at the WTO.

The ABAC Business Advisory Council (ABAC)

In keeping with their commitment to engage the private sector, Leaders met for the first time with the ABAC, a high-level group established in Osaka in 1996 to provide views on expanding trade and investment.

Ministers were instructed to consider the five key challenges identified in ABAC's first report, namely: facilitating the movement of business professionals; enhancing investment flows by strengthening investment protection; involving the private sector in infrastructure planning; developing policies friendly to small- and medium-sized entreprises; and encouraging greater business sector participation in economic and technical co-operation.

Economic and Technical Cooperation

Six priorities were endorsed by Leaders to guide APEC's future economic cooperation and development activities, including:

- developing human capital;
- fostering stable, safe, efficient capital markets;
- strengthening economic infrastructure;
- harnessing technologies for the future;
- safeguarding quality of life through environmentally sound growth; and
- developing the dynamism of small- and medium-sized enterprises.

These principles are based on a comprehensive report on The State of Economic and Technical Cooperation, produced by the Economic Committee, which is chaired by Canada. The report identifies the major medium-term constraints on growth in the region and assesses strategies and approaches to address these in a collective and focused manner within APEC.

Leaders asked APEC members to continue work on the effects of population and economic growth on the demand for food and energy and pressures on the environment. Canada will host a symposium of business, government and academe to address these issues in 1997 to help in preparing a report to Leaders in Vancouver.

Ministers will also identify ways to foster the growth of small- and medium-sized entreprises and promote the full participation of youth and women in APEC's economic cooperation activities.

Working with the private sector and public, private and international financial institutions, including export credit agencies, Ministers were asked to develop practical measures to stimulate private sector involvement in infrastructure development.

Institutional Outcomes: Membership

A three-stage approach to allow the entry of new members in 1999 was endorsed. As Chair of APEC next year, Canada will oversee the elaboration of criteria for the admission of future members. This will provide a basis to identify prospective new members in 1998 in a fair and transparent manner. New members will join APEC at the 1999 Ministerial and Leaders meetings.

As outlined by Leaders in Subic, work in 1997 will focus on furthering trade and investment liberalization, specifying measures to make it easier to do business, strengthening economic and technical co-operation and enhancing the involvement of the private sector.

Emphasis will also be placed on involving youth and small- and medium-sized enterprises as well as on infrastructure development and other issues as they relate to sustaining prosperity, growth and employment in the region.

In addition to the Ministerial and Leaders' Meetings in Vancouver in November, ministerial meetings on the environment (Toronto, April), trade (Montreal, May), transport (Vancouver, June), energy (Edmonton, August) and small- and medium-sized entreprises (Ottawa, September) will help advance objectives in these areas.

Each of these meetings will feature an opportunity for dialogue between Ministers and business representatives of the sectors concerned as well as trade fora, seminars and other events to encourage business partnerships. They will be held across Canada to introduce visiting business and government representatives to the competitive advantages of different regions for trade and investment.

A key priority will be to integrate the views and priorities of both large and small business. The recommendations of the APEC Business Advisory Council (ABAC) will provide starting points. The ABAC will meet four times in 1997 (January, May, September and November), and meet periodically with the Canadian Chair and other APEC governments in the lead up to the Vancouver Ministerial and Leaders Meeting in November.

Canada's Individual Action Plan (IAP)

Canada has a long-standing commitment to freer trade as the engine of economic growth and employment. An original member of the General Agreement on Tariffs and Trade and the World Trade Organization (WTO), Canada has established one of the most liberal and transparent regulatory regimes in the world. Its Uruguay Round commitments are fully implemented and Canada continues to take concrete measures to push ahead on trade liberalization.

Canada has a low trade-weighted average tariff (4.8 per cent on industrial products) and has bound 99.7 per cent of its most-favoured-nation (MFN) tariff lines. Even with these low tariff levels, Canada has made significant unilateral tariff reductions beyond its Uruguay Round commitments.

In 1995, Canada launched a program to reduce tariffs on 1,500 tariff lines of manufacturing inputs. More than half of all dutiable imports covered by this unilateral action represent imports from APEC economies.

In 1996, Canada eliminated MFN duties on all original equipment automotive parts and articles used in the manufacture of motor vehicles in Canada. The estimated value of this tariff elimination to APEC economies is over $100 million annually.

In 1996, Canada launched a program to reduce General Preferential Tariff (GPT) rates to ensure that developing countries continue to enjoy a margin of preference on most GPT-eligible tariff lines. GPT coverage was also extended to an additional 218 tariff lines. The 13 of APEC's 18 members eligible for GPT tariff treatment account for 80 per cent of total GPT imports which are valued at $3.1 billion.

Canada has also eliminated non-tariff barriers to trade that are inconsistent with the WTO, and gone beyond its Uruguay Round commitments. For example:

The elimination of the Western Grains Transportation Act in 1995 eliminated export subsidies on grains and oilseeds.

Canada was the only WTO member to integrate a controlled product, namely work gloves, an action of direct benefit to APEC economies.

Canada strongly supports moves within the WTO context to negotiate an information technology agreement, and is willing to enter into discussions towards the elimination of tariffs in the following five areas:

- oilseeds & oilseed products;
- non-ferrous metals;
- wood and articles of wood;
- fish and fish products; and
- electronics.

Canada's IAP provides a transparent description of Canada's current trade and investment climate and areas where Canada hopes to move forward on additional liberalization initiatives. It describes Canada's negotiating positions in WTO forums, including an offer in the negotiations on basic telecommunications services to bind the end to Canada's three remaining telecommunications monopolies. Canada's IAP also provides APEC business people with contact information for each of Canada's regulatory bodies, where advance rulings on imports may be obtained.

On services, Canada is a signatory to the General Agreement on Trade in Services (GATS) and is bound by a comprehensive offer which provides APEC business people with opportunities to participate in the Canadian services market in areas as diverse as financial, tourism, telecommunications and transportation services.

Canada has one of the most liberal visa regimes among APEC economies. Nationals from most APEC economies do not need visas to enter Canada and those that do can obtain visas at Canadian missions abroad in one to five working days. Canada is one of only two APEC economies which have signed the Third GATS Protocol on the Temporary Movement of Persons, an additional commitment by Canada to ensure foreign participation in its services market.

Canada has a transparent and open regulatory system and is committed to further streamlining its regulatory system. Canada's Priority Regulatory Review has targeted six sectors for particular attention before the year 2000: biotechnology, health/food/therapeutic products, mining, automotive, and forest/aquaculture.