APEC: Driving Asia-Pacific's inclusive and sustainable growth

An online survey was conducted to gauge the sentiment of the general public in the 21 APEC members towards the activities of APEC and other organizations that promote cooperation between economies in the Asia-Pacific region. The developments made throughout 2021 were also discussed, including those in the APEC Putrajaya Vision 2040, the Aotearoa Plan of Action, the APEC 2021 Leaders’ Declaration, and the APEC 2022 Theme and Priorities. Japan has continued to provide valuable support to Southeast Asia, and the APEC Business Advisory Council (ABAC) of Japan provided recommendations for the future. Discussions were also held on areas of concern in the APEC region.

APEC’s mission has been consistent throughout the years, which includes the promotion of trade and investment, supporting economic and technical cooperation, improving living standards, and building sustainable and secure economic growth. And given that APEC maintains a significant portion of the global population, of global trade, and of global GDP, the region can make a significant difference if they work more closely together.

After conducting a survey with 7,600 respondents from all 21 economies in APEC during the height of the COVID-19 pandemic, they found that 23% thought of APEC as the most significant organization in promoting economic cooperation, which was the highest number, and that 60% were familiar with APEC’s importance among multilateral institutions. Most respondents were also familiar with APEC’s involvement in fair trade, the interconnected global economy, and economic development for their economies. Importance was also placed on technical cooperation, particularly in securing a stable supply of medical equipment and to ensure quick and effective response times for healthcare during the pandemic.

Among those who were aware of APEC, the organization performed slightly better than peers in promoting cooperation between economies in the Asia-Pacific region and were perceived to be quite effective. Respondents from Japan, in particular, believe that multilateralism is important for solving global challenges, which APEC is effective in promoting.

In APEC’s Putrajaya Vision 2040, 2020 was a pivotal year as they were working towards a new vision. There was a lot of effort, initiative, and reflecting done on where they wanted to see themselves as an organization going forward. Their vision was for “an open, dynamic, resilient, and peaceful Asia-Pacific community by 2040, for the prosperity of all our people and future generations.” Many of the Bogor goals for the future were actually achieved in 2020.

This helped APEC move very seamlessly into 2021, with a focus on next steps, which are laid out in the Aotearoa Plan of Action. This builds on the 1994 Bogor Goals and the 1995 Osaka Action Agenda. These plans will help in achieving this vision through three economic drivers: trade and investment, innovation and digitalization, and strong, balanced, secure, sustainable, and inclusive growth.

Trade facilitation continues to be very important for us. Reducing unnecessary barriers, supporting APEC’s role as an incubator of ideas, and further advancing the Bogor Goals and economic integration in the region will help improve trade and investment. To improve innovation and digitalization, APEC plans to promote macro-economic policies, focusing on structural reform efforts, and boosting digital infrastructure. And to secure inclusive growth, they plan on building upon APEC’s Action Agenda on Advancing Economic, Financial and Social Inclusion, ensuring quality and equitable health access, and to ensure sustainable growth by delivering APEC Leaders’ commitments on energy issues.

Road to Recovery
In 2021, APEC successfully responded to the COVID-19 pandemic by helping reduce the costs of vaccines, supporting global efforts to expand on manufacturing the vaccine, as well as facilitating trade on related essential medical products. They also focused on the region’s recovery, which focused on improving trade and services in the digital sphere, accelerating market-driven economic integration, and improving transparency to deal with corruption and fraud issues.

Themes and Priorities in Thailand Going Forward
Thailand is the host of APEC 2022. The theme they set for APEC this year is “Open. Connect. Balance.”—open relates to removing barriers to trade to deepen economic integration; connect is about the the safe and seamless resumption of cross-border travel; and balance relates to inclusive economies and sustainable economic growth. They are also focused on adopting the bio-circular-green (BCG) economic model. This focuses on renewables, recycling, and reducing waste. Related projects and initiatives they will continue to implement in 2022 include the APEC Declaration on Food Security, the APEC Action Plan for Forest Management and Innovation, and the Technical Workshop on Marine Debris Management, among others.

Recommendations from ABAC in 2021
The APEC Business Advisory Council of Japan recommended prioritizing specific areas for early progress towards an eventual FTAAP, incorporating business priorities focusing on next-generation trade and investment issues to enhance the resilience of global value chains, and recommitting to achieving FTAAP.

Recommendations for Regional Economic Integration in 2022
For 2022, ABAC would like to prioritize maintaining and improving the quality of existing agreements, encouraging interested economies as new entrants, creating higher quality rules and standards in e-commerce, globalizing to include women and MSMEs, reducing government restrictions on the trade of medical products, and taking appropriate measures to deal with climate change issues.

Future Progress in FTAAP
Dealing with next-generation investment issues is essential to make progress in FTAAP. These can include the areas of enterprise, labor rights, and environment, which are traditionally not included in detail in FTAs. Continuous dialogue with the private sector is also essential to maintain a balance in the prioritization of these issues.

The business sector is an area of common ground that could be the most inclusive pathway for organizations to potentially come together, putting APEC in a unique position.

HATTORI Takashi:

With the Russia-Ukraine crisis, will APEC be able to maintain its current momentum for cooperation, including Russia?

Rebecca Fatima STA MARIA:

This is not the first time the region has faced adversity. Even if joint statements cannot be made, dialogue will continue, and work will continue to be done. In the last couple of years, you have seen how we have had issues where even at the leader level, we couldn't have joint statements or declarations. It was a difficult time, but we always came back. It wasn't the case that because in that one year we couldn’t get to a consensus statement that progress died off. We got back to work together, and we continued the dialogue, and despite any differences, we managed to get through some very challenging periods.

Then there is COVID. At one point, people were saying that we were all going to look very inward and that nobody was going to be bothered about their neighbor. But we came together and focused on how to ensure that goods could flow. Trade is not a one economy story. You need your partners, and you need to make sure that you can follow the rules and regulations.

Of course, we are concerned. We are monitoring the developments as they unfold. We have noted that some economies have stated their own positions. Some member economies have got together and made their own statements. We are a non-binding organization, and we are, above anything else, an economic body, so our mandate really is to advance the economic agenda for Asia-Pacific prosperity. We're all watching and hoping that the situation will get better. APEC has always been a place where economies sit together and engage in dialogue, even when we have such difficult things to discuss. We are hoping that member economies and the leaders will be able to get together and have those difficult conversations.

HATTORI Takashi:

I think APEC is a unique economic cooperation framework in which the United States, China, and Russia are members. Is there any move on the part of APEC to persuade Russia, following Russia's invasion of Ukraine from February 24th?

Rebecca Fatima STA MARIA:

We are monitoring the situation, and APEC as an entity is member-driven. Also, the chair of APEC takes on a very significant role. I had a conversation with the chair, the senior official of Thailand who's chairing APEC this year, and they are also keeping track of this and are having engagements with the relevant people to see how we can as one entity respond to what is happening on the ground.

HATTORI Takashi:

Since APEC was created by an initiative of Japan and Australia, I think Japan has a great responsibility for APEC's role. What role do you expect Japan to play as the executive director of APEC?

Rebecca Fatima STA MARIA:

Yes, Japan has a key role because it is a founding member, just as Australia and Malaysia are founding members. Every one of us has a role and it's really about focusing on how we can support each other. I keep talking about us as economies that provide the tailwinds for our trade and investment as opposed to the headwinds. So each of us has a role, and I think from my experience, Japan has played a significant role, has been very collaborative in the work that we've been doing the last couple of years, and we can also see there is general support for APEC from the Japanese respondents in the perception survey.

HATTORI Takashi:

Please tell us more about the empowerment of women using digital technologies, which you have mentioned.

Rebecca Fatima STA MARIA:

We have a dashboard that helps us track women's economic integration and women's economic empowerment. The key areas that we look at when we look at women's economic empowerment are access to capital and markets, and another is access to markets themselves. Then there are skills, capacity building, and health. And the fourth is leadership, voice, and agency. This is about representation in the highest places, whether it's in government or in the private sector. The last one is innovation and technology.

It was a challenge to do the analysis partly because of the lack of data, so this is one area we will be taking forward because it is a challenge to get segregated data, to see how their access is to technology. We understand that women in rural areas have less access or have a challenge in getting access to broadband, for example. So that's intuitively understood, but we don't have enough data to support some of our arguments. So going forward, this is one area that we will need to do more work on.

Another area where we have done work is on science, technology, engineering, and mathematics (STEM), and very interestingly, there is a correlation between these two aspects. We are finding that in some economies, there is a higher percentage of women in STEM, and who are graduates in these areas, than in others. So clearly, we have done some work, but we haven't done enough. With the work that we're doing under our own Digital Economy Steering Group, as well as the Policy Partnership for Women and the Economy, these are two important working groups that we have in APEC that will be looking into these areas. I know I have not answered your question fully, but it gives you some indication that this is pretty much a work in progress.

HATTORI Takashi:

I'm very interested in the digital rules in your lecture. Could you tell us more about APEC's digital rule making efforts and challenges?

Rebecca Fatima STA MARIA:

While we are not a rule making body, unlike the WTO that actually makes rules and enforces them, APEC is voluntary. We can discuss, we can provide examples and share best practices and help to get to those rules.

Let me give you an example. We have the Cross-border Privacy Rules (CBPR), our privacy rules. We have worked together as a group and come up with those rules. But it is not compulsory or mandatory for each of those economies to implement. So, we've done it and it's there, and member economies can opt to use them.

Currently, 9 economies have aligned their domestic privacy rules, data privacy rules, with the ones that we have put up under APEC. Some economies are not subscribing to the CBPR because they don't have rules for privacy in their own economy, so they're developing it. But in that case, they can use the CBPR as a basis when they are looking at their own domestic rulemaking. So, it is a lot more in terms of sharing, a lot more in terms of experience in building capacities, of policy makers’ understanding the value of what these rules will be, and what benefits come from making such rules.

HATTORI Takashi:

The next question wants to hear more about the relation between the empowerment of women and digital rules, but is there anything specific related to digital rules? Japan has undertaken various projects and discussed various matters over the last couple of years on the effect on the empowerment of women. There are many points that we need to improve on, and digital is one of the areas of promoting that.

Rebecca Fatima STA MARIA:

I think sometimes policymakers seem to have the impression that these rules are gender-neutral, and that these rules should apply across the board. But it's not about the rules being gender-neutral, it's about making sure that different parts of the population have an understanding of these rules and how these rules apply to them. So, when you have those rules, it is about making sure that there is no discriminatory aspect in those rules.

One of our challenges is that we don't have enough data, so this is something that we are working on. For example, it's not just about women. There are also other minority groups. We had a forum last year where we discussed about economic empowerment, and one thing that came up over and over again was the lack of data. This is an area that is worth exploring and we need the data before we can make better-informed rules and regulations.

HATTORI Takashi:

Concerning the strategy to adapt to a carbon neutral economy, do you have any future action agenda or concrete initiatives to facilitate that process?

Rebecca Fatima STA MARIA:

While we are not focusing distinctly on carbon neutrality, we are focusing on sustainability, and that's a key part of the work this year and the Thai initiative to build a circular economy. We have funding that we help economies do further work on, and one of these is in the area of sustainability; projects on managing sustainable development, energy transition, so there are aspects of that in the work that we do. This is a new developing area, and we will hear more of this discussion going forward, especially with the Thai initiative towards the bio-circular-green economy.

HATTORI Takashi:

I would like to ask about the role of APEC in a more general sense, beyond economic matters. APEC’s vision is not only in trade and investment, but also in innovation and digitization; and in the third driver—strong but secure, sustainable, and inclusive growth. Is there anything APEC should adjust for the new vision? Do you think there is anything we should innovate ourselves to adapt to that new direction?

Rebecca Fatima STA MARIA:

When we were coming up with the vision, we spent a lot of time consulting. We had the vision group, a group of independent thinkers and experts to help us think through where we saw APEC going in the future. We also had ABAC, they had a lot of input in this process as well, as well as the Pacific Economic Cooperation Council, also provided input. It was a collective discussion, a collective piece of work. When we finally got to the vision, it was collective; policymakers, think tanks, experts, the business community, all putting their heads together to come up with these areas. We did anticipate the direction APEC should head.

When you look at what we used to do in the past, it was a focus on trade and investment. But today, we did a very timely inclusion of innovation and digitalization, and I must say the whole issue of climate change was never quite on our agenda. If you're looking at working groups, the structure of APEC itself, we don't have one group focused on climate change for example. We have groups on women, on small and medium enterprises, on digitalization, but it's a mix. We do not have one just looking at the whole issue of sustainability. But sustainability cuts across a number of our working groups. For example, when you're talking about small and medium enterprises, you cannot avoid talking about sustainability.

What we need to do more of is to find coordination across the different fora so that we get a better picture of what we're doing for sustainability, in the area of climate change, in the area of inclusive growth, so we get a better picture of what's being done so that we ensure that we're all coordinated. And because we do not have specific bodies doing it, we've decided in the Secretariat that we will take on that responsibility. We have that conversation among ourselves to make sure that there is alignment in what we are doing and not so much duplication, so that there is alignment and coordination across the different fora.

IMAMURA Takashi:

I would like to emphasize that this timing is very difficult and critical for APEC. But to maintain the momentum is very important at this time, so we are committed to contributing to APEC’s activities.