2011 APEC Lecture - Dr Craig Emerson - Australia's Minister for Trade | RMIT University


Uploaded by rmitmedia on 10.01.2012

Transcript:
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Until about a week ago, APEC, an Australian idea, had been the quiet achiever of regional
economic integration. Great strides had been made in improving the
environment for doing business in the region, but this had come with little fanfare.
However, thanks to the American hosts and the cooperation of the 20 other member economies,
MondayÕs meeting in Honolulu may have plugged APEC into an amplifier as the regionÕs pre-eminent
instrument of economic reform. 2 Properly managed, APEC could drive a new era
of job-creating, prosperity-enhancing cooperation in a region that already generates 56 per
cent of the worldÕs GDP. Why the sudden optimism? Well, for a start,
let me qualify: Australia has never been pessimistic about APEC.
But now the message about the benefits of APEC membership is being broadcast loudly
and clearly. Since its inception in 1989, APEC has always
represented for Australia a forum for ever-closer regional economic co-operation, and has helped
drive open trade and investment between economies. Between 1988 and 2009 average tariffs in APEC
member economies fell from 16 to 6 per cent, with further reductions legislated in most
countries. Behind-the-borders chokepoints are also being
tackled. Australia is helping to drive APECÕs work
program to implement supply-chain action plans for member economies.
These plans set out how to improve logistics and address different communications standards
between economies. Under them, Australia is leading work towards
better collaboration between industry and government to protect submarine telecommunications
cables, improve logistics regulation, and improve the safety of heavy road vehicle transport.
3 Last year we introduced an online tool, the
STAR database, to help service providers identify and access new export markets in other APEC
economies. The database already covers 11 economies and
five services areas: financial; mining and energy; professional; telecommunications;
and transport and logistics. Next year Australia will work with other countries
to expand this database to cover all APEC members, and take in education, distribution
and ICT services industries. Australia has provided $3 million to help
run two APEC workshops on structural reform; and to continue supporting that work next
year And APECÕs work on regulatory best practice
will deliver benefits to business by easing the burden of unnecessary trade rule impediments.
One of APECÕs most conspicuous reforms has been the APEC Business Travel Card, which
is wildly popular in the regional business community.
This is
because it
removes the need for visas and expedites airport transit procedures.
The Business Travel Card is making business travel within the APEC region almost as easy
as it is within the European Union. 4 But the Honolulu meeting not only raised the
decibel level of APEC LeadersÕ meetings; its decisions made headlines around the globe.
This is as it should be, because APEC has increased the pace of reform and with it,
the impact it has on world affairs. Two agreements lifted APECÕs profile as a
driver of reform: an agreement to reduce tariffs on environmental goods and services, and an
agreement to stand still on protectionism through to 2015.
The first of these accords is a timely response to the fact that APEC economies have benefited
enormously from their market-opening policies of the last 20 years.
In pursuing the Bogor goals, member economies have lowered their trade barriers unilaterally,
confident in the knowledge that the other members were doing so too.
These market-opening policies have helped APEC to grow 50 per cent faster than EuropeÕs
economy over the last two decades. This era of rapidly-rising prosperity has
been achieved through both industrialisation and urbanisation, both processes demanding
enormous amounts of energy. That energy has been generated overwhelmingly
by fossil fuels. Between 1990 and 2005 demand among APEC economies for oil and electricity
grew by around two-thirds. 5 APECÕs economic success has, therefore, come
at an environmental cost: greatly increased carbon emissions contributing to dangerous
climate change. At Honolulu, APEC Leaders confronted this
reality head-on. They agreed to a goal of reducing aggregate energy intensity in the
APEC region by 45 per cent by 2035 compared with 2005 levels.
While this is a goal and not a commitment, so was the Bogor goal of free and open trade
and investment by 2020 - which has amply proven its worth.
Australia took great heart from the energy-intensity goal, since just a week earlier the Gillard
GovernmentÕs Carbon Emissions Trading Scheme was passed into law.
Our critics continue to assert that Australia is going it alone on emissions trading.
They conveniently ignore New ZealandÕs scheme and those being developed or mooted for 10
American states, four Canadian provinces, five Chinese provinces and cities and 14 Korean
provinces and cities. It is true that reducing energy intensity
will not, of itself, reduce carbon emissions relative to present annual levels.
But it will apply a brake to growth in those emissions. 6
To give early practical effect to the 45 per cent energy-intensity reduction goal, APEC
reached a landmark agreement in Honolulu. APEC Leaders, urged on vigorously by our US
hosts, agreed to limit tariffs on environmental goods to 5 per cent or less by the end of
2015. In doing so, APEC acknowledged the impediments
to the free flow of environmental goods and services across APEC countries, while remedying
and averting environmental damage associated with the regionÕs success in achieving economic
growth. In the spirit of APEC, the consensus on limiting
tariffs on environmental goods and services will facilitate the transition to a low-carbon
future. If Australia took heart from APECÕs Honolulu
initiatives on promoting environmentally sustainable growth, we were thrilled about the outcome
on trade. Prime Minister Gillard had urged the Commonwealth
Heads of Government at their Perth meeting in late-October to recognise that the existing
pathway to global trade liberalisation, through the Doha Round of negotiations, was hopelessly
blocked, and that a new pathway needed to be found.
The new pathway would involve breaking the Doha agenda into manageable parts and bringing
home agreements as they were reached, instead of trying to do this through one, elusive
grand bargain. 7 CHOGM agreed, and in addition urged support
for an anti-protectionist pledge at the forthcoming WTO Ministerial Conference.
AustraliaÕs Prime Minister then took her proposal to the G20 Meeting in Cannes.
Again, the leaders of the worldÕs 20 largest economies candidly acknowledged that the Doha
negotiations were deadlocked. They agreed that a fresh approach was needed
and, after much contemplation and negotiation, reaffirmed a standstill on protectionism through
2013. At APEC, AustraliaÕs Prime Minister again
urged this fresh approach which, with the support of the American hosts, was adopted.
But the APEC Leaders went further, reaffirming their pledge against protectionism through
a standstill commitment that they extended until the end of 2015.
They also urged WTO Members to make an anti-protectionist pledge at the forthcoming Ministerial meeting
in Geneva next month. Again, the standstill through to 2015 is not
legally binding - no APEC agreements ever are.
But it signals a willingness among APEC members - including the worldÕs three largest economies
- to resist rising protectionist pressures at home. 8
If APEC lifted its voice by several decibels at Honolulu, it shared the stage with a sub-grouping:
members of the Trans-Pacific Partnership, or TPP.
Committed to further trade liberalisation, but frustrated by the impasses in the decade-long
Doha Round, TPP members have been negotiating feverishly towards a sub-regional accord.
The TPP has an essential attribute that the Doha Round lacks: political momentum.
On the way to Honolulu, JapanÕs Prime Minister Noda formally announced his countryÕs interest
in joining the TPP. Mexico did likewise in Honolulu. Canada, too,
has expressed interest. If all eventually joined, the TPP economies
would be almost one-and-a-half times the size of the European Union, accounting for well
over one-third of the worldÕs GDP. Meanwhile, at Honolulu, TPP Leaders made an
historic commitment: to eliminate all tariffs over time.
Though the TPP is conceived as a 21st Century agreement - easing behind-the-border trade
restrictions and liberalising trade in services and regional investment - cleaning out the
20th Century remnants of tariff barriers to trade in goods gives the TPP tangibility and
free-trade standing. 9 Again, Australia had pressed for the commitment
on tariff elimination and is delighted with the outcome.
Accompanying eventual tariff elimination would be the development of common rules of origin,
lowering transactions costs between TPP members. For those purists among us who would hope
that the TPP doesnÕt lead to trade restrictions with non-members and wasteful trade diversion
from more efficient to less efficient producers, the TPP is not meant to be an exclusive club.
As its membership expands over time, it would lead to APECÕs ambition of a Free Trade Area
of the Asia-Pacific. APECÕs future, therefore, is bright.
While those citizens of the Asia-Pacific who have gained jobs and incomes from APECÕs
market-opening policies may never know it, the Asia-Pacific Economic Community forum
has helped liberate millions of the regionÕs citizens from poverty.
APECÕs achievements prove that market opening is not just dry economics for the benefit
of large, multinational corporations; it is a great humanitarian endeavour and a fabulously
successful one.