The Asia-Pacific Economic Cooperation (APEC) forum was established in 1989 to capitalize on the growing interdependence of Asia-Pacific economies.

By facilitating economicgrowth, intensifying economic and technical cooperation and enhancing a sense ofcommunity, APEC aims to create greaterprosperity for the people of the region. APEC is a unique forum, operating on the basis of open dialogue and respect for theviews of all participants. There are no binding commitments; compliance is achieved through discussion and mutual support in the formof economic and technical cooperation. InAPEC, all economies have an equal say and decision-making is reached by consensus.Since its inception, APEC has grown to become one of the world's most important regional groupings. Its 21 member economiesare home to more than 2.6 billion peopleand represent approximately 56% of worldGDP and 49% of world trade.*(Source: The WorldBank and The APEC Region Trade and Investment 2006)APEC is the most economically dynamic regionin the world. Building on the five-year targetset in Shanghai in 2001 to reduce trade transaction costs by 5%, APEC member economies have targeted a further 5% reduction by 2010. The forum constantly adapts itself to enable members to discuss important new economic challenges. These include facilitating electronic commerce, addressing the digital divide,countering terrorism and introducing measures to safeguard against infectious diseases. What s Asia-Pacific Economic Cooperation? Asia-Pacific Economic Cooperation, or APEC, is the premier forum for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region . APEC is the only inter governmental grouping in the world operating on the basis of non-binding commitments, open dialogue and equal respect for the views of all participants. Unlike the WTO or other multilateral trade bodies, APEC has no treaty obligations required of its participants. Decisions made within APEC are reached by consensus and commitments are undertaken on a voluntary basis. APEC has 21 members - referred to as "Member Economies" - which account for approximately 41% of the world's population, approximately 56% of world GDP and about 49% of world trade. APEC's 21 Member Economies are Australia; Brunei Darussalam; Canada; Chile; People's Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; The Republic of the Philippines; The Russian Federation; Singapore; Chinese Taipei; Thailand; United States of America; Viet Nam.

Purpose and Goals APEC was established in 1989 to further enhance economic growth and prosperity for the region and to strengthen the Asia-Pacific community. Since its inception, APEC has worked to reduce tariffs and other trade barriers across the Asia-Pacific region, creating efficient domestic economies and dramatically increasing exports. Key to achieving APEC's vision are what are referred to as the 'Bogor Goals' of free and open trade and investment in the Asia-Pacific by 2010 for industrialised economies and 2020 for developing economies. These goals were adopted by Leaders at their 1994 meeting in Bogor, Indonesia. Free and open trade and investment helps economies to grow, creates jobs and provides greater opportunities for international trade and investment. In contrast, protectionism keeps prices high and fosters inefficiencies in certain industries. Free and open trade helps to lower the costs of production and thus reduces the prices of goods and services - a direct benefit to all. APEC also works to create an environment for the safe and efficient movement of goods, services and people across borders in the region through policy alignment and economic and technical cooperation. Since its inception, APEC has worked to reduce tariffs and other trade barriers across the Asia-Pacific region, creating efficient domestic economies and dramatically increasing exports. Key to achieving APEC's vision are what are referred to as the 'Bogor Goals' of free and open trade and investment in the AsiaPacific by 2010 for industrialised economies and 2020 for developing economies. These goals were adopted by Leaders at their 1994 meeting in Bogor, Indonesia. Free and open trade and investment helps economies to grow, creates jobs and provides greater opportunities for international trade and investment. In contrast, protectionism keeps prices high and fosters inefficiencies in certain industries. Free and open trade helps to lower the costs of production and thus reduces the prices of goods and services - a direct benefit to all. APEC also works to create an environment for the safe and efficient movement of goods, services and people across borders in the region through policy alignment and economic and technical cooperation. APEC operates as a cooperative, multilateral conomic and trade forum. Member conomies take individual and collective actionsto open their markets and promote economic growth.

Economic Growth Since its inception in 1989, the APEC region has consistently been the most economically dynamic part of the world. In its first decade, APEC Member Economies generated nearly 70 percent of global economic growth and the APEC region consistently outperformed the rest of the world, even during the Asian financial crisis. APEC Member Economies work together to sustain this economic growth through a commitment to open trade, investment and economic reform. By progressively reducing tariffs and other barriers to trade, APEC Member Economies have become more efficient and exports have expanded dramatically. Benefits to the People in the APEC Region Consumers in Asia-Pacific have both directly and indirectly benefited from the collective and individual actions of APEC Member Economies. Some direct benefits include increased job opportunities, more training programmes, stronger social safety nets and poverty alleviation. More broadly however, APEC Member Economies on average enjoy lower cost of living because reduced trade barriers and a more economically competitive region lowers prices for goods and services that everyone needs on a daily basis, from food to clothes to mobile phones

Asia-Pacific Economic Cooperation (APEC) works in three broad areas to meet the Bogor Goals of free and open trade and investment in the Asia-Pacific by 2010 for developed economies and 2020 for developing economies. Known as APEC's 'Three Pillars', APEC focuses on three key areas: Trade and Investment Liberalisation Business Facilitation Economic and Technical Cooperation

The outcomes of these three areas enable APEC Member Economies to strengthen their economies by pooling resources within the region and achieving efficiencies. Tangible benefits are also delivered to consumers in the APEC region through increased training and employment opportunities, greater choices in the marketplace, cheaper goods and services and improved access to international markets. Trade and Investment Liberalisation Trade and Investment Liberalisation reduces and eventually eliminates tariff and non-tariff barriers to trade and investment. Protectionism is expensive because it raises prices for goods and services. Thus, Trade and Investment Liberation focuses on opening markets to increase trade and investment among economies, resulting in economic growth for APEC Member Economies and increased standard of living for all. Business Facilitation Business Facilitation focuses on reducing the costs of business transactions, improving access to trade information and aligning policy and business strategies to facilitate growth, and free and open trade. Essentially, Business Facilitation helps importers and exporters in Asia Pacific meet and conduct business more efficiently, thus reducing costs of production and leading to increased trade, cheaper goods and services and more employment opportunities due to an expanded economy. Economic and Technical Cooperation (ECOTECH) ECOTECH is dedicated to providing training and cooperation to build capacities in all APEC Member Economies to take advantage of global trade and the New Economy. This area builds capacity at the institutional and personal level to assist APEC Member Economies and its people gain the necessary skills to meet their economic potential.

APEC - A Multilateral Economic Forum Asia-Pacific Economic Cooperation (APEC) operates as a cooperative, multilateral economic and trade forum. It is unique in that it represents the only intergovernmental grouping in the world committed to reducing trade barriers and increasing investments without requiring its members to enter into legally binding obligations. The forum succeeds by promoting dialogue and equal respect for the views of all participants and making decisions based on consensus to achieve its free and open trade and investment goals. APEC Member Economies take individual and collective actions to open their markets and promote economic growth. More information about these actions is available in the Action Plans section of this website. Host Economy Every year one of the 21 APEC Member Economies plays host to APEC meetings and serves as the APEC Chair. The APEC host economy is responsible for chairing the annual Economic Leaders' Meeting, selected Ministerial Meetings, Senior Officials Meetings, the APEC Business Advisory Council and the APEC Study Centres Consortium and also fills the Executive Director position at the APEC Secretariat. The Deputy Executive Director position is filled by a senior diplomat from the economy which will host in the next year. Funding APEC is not a donor organisation. Instead, APEC activities are centrally funded by small annual contributions from APEC Member Economies - since 1999 these have totalled US$3.38 million each year. These contributions are used to fund a small Secretariat in Singapore and various projects which support APEC's economic and trade goals. Since 1997 Japan has provided additional funds for projects (between US$2.7 and 4.2 million annually, depending on amount and exchange rates) which support APEC's trade and investment liberalisation and facilitation goals. Projects generally APEC Member Economies also provide considerable resources to assist in the operations of APEC. These include the secondment of professional staff to the Secretariat; the hosting of meetings; and partial (or full) funding of some projects.

Policy Development Asia-Pacific Economic Cooperation (APEC) policy direction is provided by the 21 APEC Economic Leaders. Strategic recommendations provided by APEC Ministers and the APEC Business Advisory Council are considered by APEC Economic Leaders as part of this process. The following meetings are conducted each year, which help shape APEC's policy direction APEC Economic Leaders' Meeting APEC Economic Leaders' Meetings are held once a year in the APEC host economy. Declarations from these meetings set the policy agenda for APEC. APEC Ministerial Meeting
Annual APEC Ministerial Meetings of foreign and economic/trade ministers are held

immediately prior to APEC Economic Leaders' Meetings. Ministers consider the year's activities and provide recommendations for APEC Economic Leaders' consideration. Sectoral Ministerial Meetings Sectoral Ministerial Meetings are held regularly covering areas such as education, energy, environment and sustainable development, finance, human resource development, regional science and technology cooperation, small and medium enterprises, telecommunications and information industry, tourism, trade, transportation and women's affairs. Recommendations from these meetings are also provided to APEC Economic Leaders for their consideration. APEC Business Advisory Council (ABAC) ABAC provides APEC Economic Leaders with a business perspective on APEC issues through an annual meeting and a formal report. The annual report contains recommendations to improve the business and investment environment in the APEC region. ABAC also meets four times per year and a representative attends Ministerial Meetings. Asia-Pacific Economic Cooperation (APEC) has three Official Observers: the Association of Southeast Asian Nations Secretariat, the Pacific Economic Cooperation Council and the Pacific Islands Forum Secretariat. These observers participate in APEC meetings and have full access to documents and information related to these meetings. The observer groups provide partnership, expertise and insight that assist APEC to attain its goals and implement its initiatives. Association of Southeast Asian Nations (ASEAN) Secretariat The ASEAN Declaration states that the aims and purposes of the Association are -

to accelerate the economic growth, social progress and cultural development in the region through joint endeavours in the spirit of equality and partnership in order to strengthen the foundation for a prosperous and peaceful community of Southeast Asian nations, and to promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries in the region and adherence to the principles of the United Nations Charter. Pacific Economic Cooperation Council (PECC) PECC is a unique tripartite partnership of senior individuals from business and industry, government, academic and other intellectual circles. All participate in their private capacity and discuss freely current, practical policy issues of the Asia-Pacific region. PECC aims to serve as a regional forum for cooperation and policy coordination to promote economic development in the Asia-Pacific region, based on the following premises The respective strengths of business and industry, government, academic and other intellectual circles can be better focused to promote the acceleration of economic growth, social progress, scientific and technological development and environmental quality in the region, and Trade, joint ventures, mutual aid and other forms of linkage, when developed in a spirit of partnership, fairness, respect and genuine cooperation, strengthen the foundation needed for a prosperous, progressive and peaceful Pacific Region. Pacific Islands Forum (PIF) Secretariat PIF is the paramount regional inter-governmental forum in the South Pacific. PIF addresses issues such as regional trade, economic development, the environment and regional law enforcement, cooperation and security in the South Pacific. The APEC Secretariat is based in Singapore and operates as the core support mechanism for the APEC process. It provides coordination, technical and advisory support as well as information management, communications and public outreach services.

CAP 2. APEC Projects in Action

The SCE is mandated to report annually on APECs ECOTECH activities. In 2007, this report is based for the first time on a consolidated list of ECOTECH priorities, which were endorsed by Ministers in 2006. This list has merged and updated the 1996 Manila Framework priorities and the APEC-wide ECOTECH priorities approved in 2003 following a call from the Leaders and Ministers to improve the focus on APECs economic and technical cooperation and capacity-building objectives. The priorities for APECs economic and technical cooperation are: Developing human capital; Developing stable and efficient markets through structural reform; Strengthening economic infrastructure; Facilitating technology flows and harnessing technologies for the future; Safeguarding the quality of life through environmentally sound growth; Developing and strengthening the dynamism of small and medium enterprises (SMEs); Integration into the global economy; Human security and counter-terrorism capacity building; Promoting the development of knowledge-based economies; and Addressing the social dimension of globalisation. This chapter highlights some of the projects being undertaken by different APEC fora in 2007 to support economic and technical cooperation. The Budget and Management Committee (BMC) approved 76 ECOTECH projects for implementation in 2007 (excluding CTI, Economic Committee (EC) and Finance Ministers Process (FMP) projects). These are summarized in Table 1. Figure 1 prov ides a graph of the projects by priority from 200607. 2.1Developing human Capital A large number of APEC projects help to develop human capital in the region. For example, the

Human Resources Development Working Group (HRD) conducted a symposium on capacity building for investment liberalisation. The project aims to raise capacity of public and business sectors involved in domestic legislation, policy making and social system development in the field of foreign direct investment. It plans to address economic reform measures, legal processes throughout the life cycle of investment, (e.g., establishment, operation and dissolution of businesses) and other practices to create attractive investment climates. The Industrial Science and Technology Working Group (ISTWG) will implement short-term training projects targeting natural resource development and its environmental impacts in the APEC region. Japan conducted the training in August 2007. The training objectives were the transfer of guidelines for natural resource development and its environmental impact, environmental impact assessment, natural resource assessment, public awareness and measurement of quality. Those being targeted for training include strategic planning officers practicing land utilisation, natural resource development and environmental risk management in APEC member economies (especially developing economies). The planned outcome is to bring about economy regulations and guidelines for natural resource development and its environmental impact to ensure long-term sustainable growth in developing economies where rapid economical growth may cause environmental degradation. 2.2 Developing stable and efficient markets through structural reform Most activities supporting this priority are undertaken by the Economic Committee and Finance Ministers Process. For example, in late 2007, a second Policy Dialogue on Savings and Capital Market Development will be held. Another activity being undertaken by the Finance Ministers Process is the Deepening Prudential Regulatory Capacity in Non-Life Insurance Training Program, which will educate regulators on current best practices in regulation in the non-life insurance industry and highlight the experiences of developed economies in regulating their respective industries. 2.3 Strengthening economic infrastructure The Telecommunications and Information Working Group (TELWG) and the Transportation Working Group (TPTWG) are the main APEC fora undertaking activities to strengthen economic infrastructure. TEL is implementing the Project WTO Capacity Building on Domestic Regulations to familiarize APEC members with the WTO GATS Domestic Regulation disciplines and how they are applied to the information and communication technology (ICT) sector. Economies have discussed examples of best practices and a set of guidelines to implement domestic regulations in the ICT sector. These guidelines will assist developing economies develop or reform their policy and regulatory structures and become WTO compliant. The TPTWG has developed the APEC Port Services Network Initiative, which will integrate various sectors in the shipping business, facilitate convenient and secure cargo transportation, enhance exchanges and cooperation among ports and related sectors and promote their development, improve efficiency and security of logistics system, and stimulate trade and investment in APEC region. The TPTWG has also undertaken a study to facilitate international shipping in the APEC region. The study will develop guidelines for member economies to address the non-competitive aspects of non-ratemaking agreements among liner shipping companies. The principal activity is a consultant study that will identify and categorize the various kinds of non-ratemaking agreements that currently exist on APEC trade routes. These agreements will be assessed on their importance to APEC trade and the pros and cons to carriers, shippers and other stakeholders. It will then assess the non-competitive aspects of such agreements and propose guidelines to deal with them. 2.4 Facilitating technology flows and harnessing technologies for the future As part of the Industrial Science and Technology Working Groups (ISTWG) focus on Emerging Infectious Diseases, a two-stage project will be conducted which aims to enhance the regions capacity in using converging technologies, i.e. two or more disparate technologies or disciplines that come together to contribute to the prevention and management of emerging infectious diseases that could become widespread in the APEC region. The first stage will identify a group of converging technologies by using bibliometric analysis and scenario planning. The second stage will consist of workshops in Japan and Chinese Taipei, or Korea. It will invite experts in various technological areas throughout APEC to jointly build roadmaps of these technologies. An ISTWG project will provide more effective, accurate and timely climate information to assist APECs Climate Center for Climate Information Services. It will take the currently available climate prediction technology and skills to the next level of high accuracy so that member economies can

more efficiently protect their people from extreme climate events. 2.5 Safeguarding the quality of life through environmentally sound growth The Marine Resource Conservation Working Group (MRCWG) will support an initiative to build on an earlier TILF-funded project that identified the environmental principles and policies used in aquaculture administration and their role in trade and investment liberalisation. Two workshops are planned (in Indonesia in 2007 and Peru in 2008) and a report outlining the critical components of a sustainable aquaculture strategy will be presented for consideration to higher officials and Leaders by the end of 2008. APEC economies accounts for nearly 90% of all aquaculture fisheries in the world and consume 70% of global fish production. All APEC economies seek to maintain their regional seas and common oceans in good health to ensure the sustainability of fish production for the future. The Republic of Korea has invested considerable research on ocean sciences and developed strategies that help to maintain the ecological balance in marine ecosystems. MRCWG is supporting the Republic of Korea to undertake short training courses where Korea will share its knowledge with regional developing economies. In 2007, the Energy Working Group (EWG) has undertaken a number of projects to improve coal plants in the region. Including its work to promote Environmental Monitoring for Coal-Fired Power Plants in Developing Asian APEC Economies and a project focused on the lessons learned in upgrading and refurbishing older coal-fired power plantsa best practice guide for APEC developing economies. 2.6 Developing and strengthening the dynamism of small and medium enterprises The Small and Medium Enterprises Working Group (SMEWG) will conduct short-term training as part of its project on Enhancing the Market Development of Local Cultural Industries in APEC. Local cultural industries exist in almost every APEC economy and are targeted for government assistance. Their products are attractive to foreign buyers and therefore have high export potential. This project is aimed to help them to expand their markets to the international arena through ecommerce by: building up e-commerce capacity and transforming digital divides into digital opportunities; building a platform for local cultural industries to display their products and increase their business opportunities in foreign markets; and strengthening cross-border cooperation in the APEC region to promote the development of overseas markets. SMEWG will also conduct a seminar on Best Practices for the Internationalization of SMEs. The project will enhance the capacity of APEC developing economies to generate employment; develop the potential afforded by human resources; stimulate economic growth; strengthen the dynamism of SMEs; and increase exports through the promotion of entrepreneur export potential. In addition, an SMEWG project will develop a sustainable model for small and micro-enterprise growth through enhancing domestic and international trade linkages. It will be based on a combination of components in existing best practices for micro-enterprise development with special emphasis on women and indigenous peoples. The ATCWG will hold a Workshop to Enhance Capacity of SMEs in Agricultural Sector of APEC Economies on October 2007 in Ha Noi, Viet Nam. The aim of the workshop is to help promote networking and policies, which are more conducive for SMEs in the agriculture sector. The workshop will provide government, private sector and non-governmental stakeholders with key tools and methods to manage and develop SMEs, particularly in field of storage and processing agricultural products. 2.7 Integration into the global economy Activities to support integration into the global economy occur across a range of different fora, including promoting trade through the development of standards across the region, improving competitiveness through capacity building and education or even improving customs and quarantine processes. Examples include the EWGs Electric Motors - Alignment of Standards and Best Practice Programs within APEC, which aims to promote the use of efficient motors in member economies by aligning test methods and energy performance standards. It builds on the recent agreement at the IEC to create a single method acceptable to world technical experts to measure motor efficiency. The project aims to facilitate the use of a single common test method and promote appropriate performance and efficiency endorsement levels amongst member economies. The use of a common test method and a set of aligned performance and high efficiency endorsement levels will enable suppliers to more easily market efficient products within APEC economies. The ATCWG conducted projects to build capacity in plant and animal quarantine and pest

management. For example, a symposium on achieving improved quarantine treatment capability through the implementation of the AFAS approach was held in Jakarta, Indonesia, in April 2007. The HRDWG held a seminar to Increase the Productivity of APEC Economies through High Performance Workplace Systems, which will better analyse these systems across APEC. 2.8 Human security and counter-terrorism capacity building The Counter Terrorism Taskforce annually holds a Secure Trade in the APEC Region (STAR) conference. The fifth STAR conference, was held in Sydney on 27-28 June 2007. It constitutes an important initiative, enhancing public-private partnership in order to ensure secure trade in an effective way and reduce any adverse impacts of anti-terrorism activities on trade and investment. In this way, it is also helping to develop and to improve human security and counter-terrorism in the APEC region. The Counter Terrorism Taskforce has also developed the Trade Recovery Program (TRP), which is a set of recommendations that will set the framework for future work in APEC on total supply chain security, improving economies capacity building in human security and counter-terrorism. The Anti-Corruption and Transparency Experts Task Force (ACT) will conduct a capacity building workshop on combating corruption related to money laundering. The purpose of the workshop is to exchange best practices among relevant authorities in the APEC region and raise awareness by bringing the money laundering and corruption nexus to the forefront of understanding among officials and the public. Through this workshop, a minimum level of standards will be clarified and a network of professionals in the anti-corruption and anti-money laundering established for sharing of information and practices. The workshop will emphasise the dissemination of experts information and case studies to relevant government authorities and other scholars focusing on the recommendations of the Financial Action Task Force and its implementation by member economies. The Agriculture Technical Cooperation Working Group (ATCWG) held a seminar in May 2007 to share experiences with the management of the avian influenza H5N1 threat. It will provide APEC economies the opportunity to identify the key factors of the various approaches in preparing for, and responding to, H5N1 avian influenza and to consider the relevance of these factors to their own situations. The Health Task Force (HTF) also undertook a workshop on the Implementation of APEC Action Plan on the Prevention and Response to Avian and Influenza Pandemics. The main objective of the workshop is to create opportunities for member economies to share information on the implementation of the Action Plan, identify capacity building needs, discuss priority areas of work and discuss future capacity building activities. The Task Force for Emergency Preparedness (TFEP) undertook a capacity-building workshop for senior disaster management coordinators. The project will enhance regional emergency response capacity and build effective response and recovery mechanisms in APEC member economies via a two-year rolling training program. It will build on APECs high-level commitment to an all-hazards response to emergency management and focus on the needs of developing economies through building institutional capability. 2.9 Promoting the development of knowledge-based economies Promoting the development of knowledge-based economies is undertaken by many fora, including the Telecommunications and Information Working Group (TEL), ECSG and HRDWG. For example, in 2007, TEL undertook a project to deploy the Government Chief Information Officer (CIO) Training Model in the APEC region during 2007. The project defines a framework for CIO networking both inside and outside the region. This latest project is based on the successful outcome of earlier activities which recommended, in its last workshop in Jakarta in November 2005, that the APEC GCIO Training Model should be deployed within the region to achieve the so called proof of concept. The ECSG undertook a project to build capacity in paperless trading. The APEC Project on Paperless Trading Capacity Building and Intellectual Property Protection will improve member economies paperless trading capacity building, which has become the key point for the realisation of APEC paperless trading development strategy. Paperless trading capacity has from two aspects: 1) Paperless trading environment building (including infrastructures, regulations, policy, standardisation, security, etc.); and 2) The digitalisation level of paperless trading in customs clearance, trade administration, transportations, financial settlement, third-party services, and management within enterprises. The Fisheries Working Group (FWG) is contributing to the promotion of the development of knowledge-based economies through two on-going projects: Improving the Conservation and

Management of Sharks in the APEC Region, which is designed to improve the capacity of APEC members in the Eastern Pacific to manage their shark fisheries sustainably; and the Aquaculture Network for the Americas is proceeding and will provide a means for exchange of information between economies as a basis for better planning, coordination, and management of aquaculture initiatives among economies. The APEC Education Foundation (AEF, www.apecef.org) continued to foster APEC cooperation in education, human resources development and capacity building through its grant programs. Since 2006 the AEF has been supporting six projects from five economies (Korea, Peru, Philippines, Russia, and Viet Nam) on providing disadvantaged youths with useful educational opportunities. Since its inception, the AEF has provided financial support of US$2.4 million to 19 projects on enhancing digital opportunities and promoting capacity building for disadvantaged groups in the region. 2.10 Addressing the social dimension of globalisation A project sponsored by the Fisheries Working Group (FWG) will undertake an assessment of the economic, social and environmental impacts of illegal, unreported and unregulated (IUU) fishing as well as the challenges and obstacles to implementing measures to combat IUU fishing. It is expected that the project will result in recommendations for actions by APEC economies, nonAPEC economies in the Asia-Pacific region, regional organisations (including regional fisheries management organisations, non-governmental organisations and intergovernmental organisations) and any other relevant stakeholders with an interest to mitigate illegal, unreported and unregulated fishing in the Asia-Pacific region. The Industrial Science and Technology Working Group (ISTWG) has approved a workshop on the participation of women and ethnic communities in the science and technology (S&T) workforce. At the workshop planned for Seoul, all member economy participants would report on their own economy including sex/ethnicity disaggregated statistics and policy analyses for education, S&T workforce, and R&D. By sharing and comparing, it is hoped to promote further understanding of the situation facing women and ethnic minorities in the S&T sector.

APEC Project Lifecycle

2.1 The life cycle of an APEC project (outline below) begins with a project proponent in a Member Economy proposing a project. This project should be relevant to the interests of several APEC economies. With limited resources projects which respond to APEC priorities will be given precedence for funding. The current APEC priorities may be found at www.apec.org. Projects include a range of activities such as: research; seminars and training to build capacity; and improving economic efficiency. With the support of the Member Economy, the project proponent puts forward the detailed project proposal (including a proposed budget) to the relevant APEC fora for consideration, assessment, approval by consensus and ranking. (All projects need to be assessed using the Quality Assessment Framework (See Chapter 4). The project should then be co-sponsored by at least two other economies for it to be considered further. Following endorsement by relevant Fora, all ECOTECH projects (defined as all projects from Working Groups and SOM Task Forces) are also required to be submitted to the SOM Steering Committee on ECOTECH (SCE) for their endorsement.

2.2

2.3

The Project proponent also needs to submit the proposal to the Secretariat for assessment and checking that the project meets the guidelines, particularly in relation to the cost estimates. TILF and ASF projects are also checked for quality and relevance to their respective funding priorities. Final project proposals are then submitted to the BMC via the Secretariat. The BMC examines and, if necessary, ranks the project proposals across all APEC fora with a view to obtaining Ministers final approval. This final approval is given for the majority of projects in October/November each year. Once funding has been approved the project proponent (now called the Project Overseer), with the assistance of the APEC Secretariat, will implement the project. The Project Overseer should be independent from those contracted to implement the project. The life span of an APEC project is two years by which time all disbursement or payments should be completed. In exceptional cases, the project disbursement deadline may be extended with the prior approval of the BMC. At the end of the project, it is evaluated and the results reported back to the relevant fora for their further consideration.

2.4

2.5

2.6

APEC Project Life Cycle

Progress assessed and needs identified through Senior officials meetings and APEC Leaders and Ministerial meetings

Project Proponents develop project proposals. Projects assessed and ranked by APEC Fora.

Project completed and outcomes evaluated. Lessons learned.

Proposals seeking APEC Funding submitted to the Secretariat to ensure projects meet the guidelines and are of a high quality.

Approved project overseers proceed to implement and monitor project.

Projects submitted to the SCE (where relevant) and BMC for approval.

2.7

The timetable for proposing a project, obtaining approval, and implementing it is set out below. The main determinant of this timetable is the approval required from the Ministerial meeting (usually in October or November).

Urgent Projects 2.8 The BMC also approves urgent projects at its meetings (March/April or September/ October) or intersessionally by correspondence. Urgent projects are defined as those projects which respond to Leaders, Ministerial, or Hosts priorities and need to be implemented faster than a normal project (for example before the end of the host year). An urgent project should be implemented in the same year and, in principle, its result should be reported to Leaders/Ministers in the same year. If a project proponent wishes a project to be considered as urgent then justifications for the urgency must be provided in the application form. Justifications are not required for projects seeking funding from the ASF. A portion of funds are set aside each year for urgent projects. The BMC will determine the amount at its September/October meeting. At present this is approximately 25% for Operational Account funding and 15% for TILF funding. These amounts are set to rise under APEC Reform.

2.9

2.10

2.11Urgent projects arising out of the Ministers/Leaders process in October/ November should be put forward to the Secretariat by: 15 January of the following year (for intersessional approval by the BMC, in cases where funding is required before the end of April); and End of February (for consideration by the BMC at its March meeting. The BMC will not consider requests for urgent funding intersessionally in the four weeks prior to a BMC meeting). 2.12 Urgent projects exceeding US$100,000 need to be approved by Senior Officials on BMCs recommendation.

2.13Disbursement of urgent projects need be completed before 31 December of the following year (i.e. a 2006 project approved in May 2006 should have disbursement completed by 31 December 2007).

Self-Funded Projects
2.14 Self-funded projects can be put forward at any time to the relevant APEC fora for

their consensual approval. These projects do not need to be assessed by the QAF or ranked. The projects do not require approval from BMC. The project proponent should use the simplified project proposal format at Annex B2 to help ensure the project meets APECs values and also for statistical purposes.

Reporting, Monitoring and Evaluation of APEC Projects

11.1 The Guidelines for Evaluation and Reporting System for APEC Projects are set out in Annex G. The Guidelines detail the requirements for progress and evaluation reports for APEC projects. The Project Overseers should report the progress in implementing the project (format in Annex G2) as required. The BMC asks all APEC fora to provide Progress Reports for all the APEC projects to the APEC Secretariat before the 2nd BMC meeting each year, so that summary tables for such reports can be prepared for the meeting. Approximately 10-20% of projects need be monitored during their implementation. Information and instructions on how and when to complete the Monitoring Framework is at Annex B4. Upon completion of the projects, Project Overseers should complete the Evaluation Report (format in Annex G3) within 2 weeks of the completion of the project. . Since July 1999, the BMC has formed itself into 7 Small Groups to better monitor the Evaluation Reports of APEC fora. The BMC Small Groups will assess the Evaluation Reports and submit their outcome of assessments along with these Evaluation Reports to the BMC for their consideration.

11.2

11.3

11.4

11.5

Strengthening Regional Economic Integration

A report on regional economic integration, including a possible Free Trade Area of the Asia-Pacific as a long-term prospect Executive summary
In Hanoi last year, Leaders called for further studies on ways and means to promote regional economic integration, including a Free Trade Area of the Asia-Pacific as a long-term prospect, and report to the 2007 APEC Economic Leaders Meeting in Australia. This report sketches out significant existing trends sweeping the region and sets out a range of agreed actions designed to give a significant boost to APECs efforts to promote regional economic integration. This initiative will lead to greater growth and increased prosperity for the people of the Asia-Pacific. The agreed actions build on the dynamic economic developments in the Asia-Pacific region in recent years and address in particular the issues arising from the increase in the number of free-trade agreements among APEC economies and the challenges this poses for business. The report and the agreed actions outline our commitment to: continuing support for the multilateral trading system through strong commitments and concrete actions; achieving the Bogor Goals and taking concrete actions towards free and open trade and investment; through a range of practical incremental steps we will take forward our examination of the options and prospects for a Free Trade Area of the Asia-Pacific (FTAAP); strengthening APECs work to promote high-quality free-trade agreements; refocusing APECs trade and investment agenda through concrete initiatives that accelerate regional economic integration and reduce behind-the-border barriers; strengthening APECs work on structural reform; intensifying efforts to strengthen and deepen financial markets in the region; sharpening ministerial agendas to place a greater focus on initiatives that promote regional economic integration and exploring new work on issues expected to support the regions economic growth and development over the longer term; developing a strategic approach to the expanding capacity-building activities flowing from APECs strengthened work on regional economic integration; and.

 providing

the APEC secretariat with greater resources and institutional capacity to support this work.

The APEC Initiative for Strengthening Regional Economic Integration

This report outlines a wide range of actions aimed at strengthening work towards regional economic integration among the APEC economies. It builds on, and develops further, APECs commitment to achieve economic growth and prosperity through collective and individual actions, supported by targeted capacity-building programs.

APECs commitment to regional economic integration

APEC was founded in 1989 on a common commitment to cooperation and the pursuit of economic prosperity in the Asia-Pacific region. When they met for the first time at Blake Island in the United States in 1993, APEC Economic Leaders espoused a shared commitment to a deeper spirit of community based on a shared vision of achieving stability, security and prosperity for our peoples. At the heart of this vision was a commitment to boosting economic growth through regional integration and free and open trade and investment. In 1994, at Bogor, Indonesia, APEC Leaders demonstrated this commitment by setting in place the Bogor Goals, a bold vision to achieve free and open trade and investment in the Asia Pacific region by 2010 for developed economies and 2020 for developing economies. The Osaka Action Agenda, updated in 2002, remains the underlying plan for progress in APEC towards achieving the Bogor Goals. In 1996, APEC agreed to use Individual Action Plans (IAPs) as tools to track progress towards achieving the Bogor Goals. This was supplemented with a program of peer reviews that began in 1997. The peer review process offers the opportunity to learn from other economies reform experiences and generally encourages open markets and measures to reduce the cost of doing business. The 2001 Shanghai Accord recognised the importance of trade facilitation and the gains to be made from a reduction in business transaction costs. It launched the first Trade Facilitation Action Plan (TFAP), which met its overriding goal of reducing transaction costs by five percent. Building on this effort, APEC Trade Ministers endorsed a second TFAP in July 2007 to reduce trade transaction costs by another 5 percent by 2010. In 2005, APEC Leaders endorsed in Busan, Korea, the Mid-term Stocktake of Progress Towards the Bogor Goals, which concluded that APEC had contributed significantly to the growth and prosperity in the Asia-Pacific region through promoting free and open trade and investment and reducing barriers to trade and investment a result that helped the region outperform the rest of the world in terms of economic growth,

employment, reductions in poverty, and access to education.

The changing trade and investment environment

The trade and investment policy landscape in the APEC region has changed considerably since the creation of APEC in 1989. The multilateral trading system remains the basic framework for the conduct of economic relations by APEC economies. But economies are turning to regional trade agreements and free-trade agreements (RTAs and FTAs) to pursue liberalisation and economic engagement objectives. More complex and efficient supply chains have emerged in response to lower trade barriers and regional economic integration. The services sector has become the largest component of many regional economies, and business is increasingly concerned about the efficiency, availability and security of economic infrastructure and supply chains. Developments in information and communications technology, changing demographics, and increasing prosperity are increasingly bringing communities together through, inter alia, expanded tourism, international education services, and business mobility. In addition, greater prosperity in the region has been accompanied by demands in areas such as cleaner development, stronger intellectual property rights, more robust financial markets and greater certainty and transparency in business law. Small and medium-sized enterprises (SMEs) have become key players in the new global business environment. They represent 90 percent of businesses in the APEC region. The effect of these developments on SMEs varies considerably. APEC therefore must be alert to the needs of SMEs to ensure they reach their full potential. In 2005 Leaders developed the Busan Roadmap as a key component of the Mid-term Stocktake. The Roadmap outlined six key priorities to redefine and broaden APECs work and in particular to accelerate progress towards the Bogor Goals. These priorities are: (1) support for the multilateral trading system, (2) strengthening collective and individual actions, (3) promoting high-quality RTAs/FTAs, (4) implementing the Busan Business Agenda, (5) implementing a strategic approach to capacity building, and (6) utilising the Pathfinder approach better. The Busan Roadmap called for development of a comprehensive business facilitation program, with due consideration to private sector development, to include such areas as customs procedures, standards and conformance, business mobility, electronic commerce, transparency, anticorruption and corporate governance, food cooperation, security in trade, intellectual property rights protection and enforcement, structural and regulatory reform, competition policy and financial systems. The Hanoi Action Plan, endorsed by Leaders in 2006, was developed to set out specific actions to implement the Busan Roadmap.

The APEC Framework for Strengthening Regional Economic Integration

The proposed framework for strengthening regional economic integration in the APEC region consists of four key elements:

 first,

it promotes and supports further liberalisation of trade in goods and services and investment flows in a manner that reflects the Bogor Goals and supports the multilateral trading system. In this way it will also lay the foundation for a possible Free Trade Area of the Asia-Pacific (FTAAP) in the longer term; second, it places a greater focus on behind-the-border reform and a business environment conducive to maximising the benefits obtainable from cross-border liberalisation; third, the framework seeks to strengthen and deepen regional financial markets to make it easier to mobilise financial resources; and fourth, this effort to strengthen regional economic integration will include initiatives in specific sectors, such as transport and communications. For these elements to be sustained, it is essential that we improve the ability of the APEC Secretariat to respond to and support Leaders and Ministers directives. The multilateral trading system represented by the World Trade Organization (WTO) provides the all-encompassing framework for strengthening economic integration in the Asia-Pacific region. APEC economies are committed to continuing their active and positive involvement in the WTO and the Doha Development Agenda (DDA) negotiations, and they will continue to see it as the best vehicle for enhancing regional economic integration. The regional economic integration framework is dynamic. It is based on the willingness and commitment of APEC economies to give it momentum. Its components are specific and action-oriented.

A targeted and effective capacity-building program

APEC economies have a firm belief that trade and investment liberalisation will progress at a faster pace if sustained by well targeted economic and technical cooperation. This is fundamental to the achievement of Bogor Goals of free and open trade and the overall process of regional economic integration.

Agreed actions
Charting a way forward: opportunities and challenges ahead
The Bogor Goals, to which APEC members remain committed, continue to be a key organising principle and driving force for APEC. The various cooperation activities derived from the Bogor Goals have not only promoted the sustainable and stable economic development of APEC member economies, but also made substantial contribution to Asia-Pacific economic integration. That progress has been underpinned by impressive and continuing economic growth derived in large part from trade and investment with other parts of the world. This in turn points to the reality that greater non-discriminatory trade liberalisation under the multilateral

system will remain a principal driver of further regional economic growth and integration. The future for economic integration in the Asia-Pacific region is promising driven by open markets and rising living standards. While much of this process will be organic as businesses and consumers respond to factors such as emerging technologies and demographic trends our economies have a crucial role to play in shaping and nurturing economic integration. Poor policy choices are likely to result in slower growth and render the region as a whole less competitive globally. The challenges ahead should not, however, be discounted. As well as the common challenge of meeting economic needs, economies in the region will have to deal with a range of demographic and structural changes, rising demand for energy and infrastructure, and environmental consequences. All of these challenges can be managed without putting future growth and development at risk. Cooperation between APEC members in developing policy responses will help support stable long-term regional economic development and integration. APEC already has an extensive work program to promote regional economic integration. APEC economies also have a long history of working together to advance economic reform. APECs robust trade and investment liberalisation and facilitation agenda continues to open markets in ways that yield countless benefits to the people of the APEC economies. APECs intensified focus on structural reform policies adds weight to the pro-reform voices in individual economies. APEC is also ideally suited to provide needed capacity building to strengthen the institutions that support strong and effective domestic markets.

Supporting the multilateral trading system

The APEC region, consisting of 21 global traders, places paramount importance on the effective functioning of the multilateral trading system. Since its inception in 1989, APEC has been a strong advocate and consistent supporter of non-discriminatory trade liberalisation first under the GATT and later the WTO. More recently, APEC has played a similarly positive role in advancing the Doha Development Agenda negotiations by providing crucial support at key junctures in the negotiations.

Agreed actions:
We

will continue to support the multilateral trading system through strong and unambiguous political commitments as well as a range of supportive, practical and concrete actions. We reaffirm that the Doha Round of multilateral negotiations provides the best opportunity for achieving trade liberalisation and that it remains our first priority.

Reaffirming our commitment to the Bogor Goals

The Bogor Goals remain a key organising principle and driving force for APEC. They have helped the APEC economies not only to promote sustainable and stable economic development, but they have also made a considerable contribution to Asia-Pacific economic integration.

Agreed actions:
We reaffirm our commitment to achieve the Bogor Goals and will continue to take concrete actions towards free and open trade and investment. We underline in particular the role played by the Busan Roadmap and the Hanoi Action Plan to advance this goal.

Exploring a Free Trade Area of the AsiaPacific

In 2006 we called for recommendations concerning the possibility of a Free Trade Area of the Asia-Pacific (FTAAP) as a long-term prospect. An FTAAP could make a considerable contribution to economic integration in the Asia-Pacific region, but its implications are not yet fully understood. Nor are the issues that would need to be addressed clearly identified. Several plurilateral free-trade agreements involving members of APEC are already in place, and others are at various stages of consideration (see attachment). A considerable quantity of analytical material concerning bilateral and plurilateral free-trade agreements is available for examination. It is nevertheless clear that more could be learned from intensified work among the APEC economies on the opportunities an FTAAP could provide, as well as the challenges it could present. Additional SOM Trade Policy Dialogues to discuss various aspects of a possible FTAAP would be helpful.

Agreed actions:
Through

a range of practical incremental steps, we will examine the options and prospects for a FTAAP, including: compiling an inventory of issues relevant to an FTAAP that would need to be addressed as part of a possible preparatory process and examining their possible implications; conducting an analytical study of existing bilateral and plurilateral free-trade agreements in the region with the aims of increasing knowledge of their similarities and differences, as well as enabling economies to identify possible ways in which the FTAAP concept could be furthered; undertaking a review of existing analytical work relevant to a possible FTAAP and assessing the need for any additional analytical work; and examining the feasibility of docking or merging existing free trade agreements.

Supporting regional economic Integration through RTAs/FTAs

APEC has consistently stressed the importance of high-quality and comprehensive RTAs/FTAs, achievement of trade and investment liberalisation and facilitation and achievement of the Bogor Goals. At the same time, member economies are aware of business concerns about unnecessary complexity in trade agreements as well as marked divergences among them. For this reason, APEC has pioneered the

promotion of high-quality agreements through the development of the APEC Best Practices and the model measures for RTAs/FTAs. Increasing the number of agreed sets of model measures would strengthen the ability of policy-makers to negotiate high-quality agreements. In addition, the effectiveness of the model measures can be enhanced through capacity-building activities aimed at making them better understood. Preferential rules of origin offer another possible area of future work on RTAs/FTAs. Differences between and complexities in these rules are often cited by business as an impediment to better utilisation of preferential trade agreements. An exploration of the various rules of origin used in the APEC region therefore could be undertaken, possibly followed by an exploration of how they might be rationalised.

Agreed actions:
We

will strengthen APECs work promoting high-quality, comprehensive RTAs/FTAs that open markets and promote economic integration while seeking to promote consistency among agreements and maximise their trade and economic benefits. In this regard, we will: complete by 2008 the program of comprehensive and highquality model measures of commonly accepted chapters for RTAs/FTAs and identify ways to facilitate their use as a guide to negotiating RTAs/FTAs; examine the various types of preferential rules of origin used in the APEC region with the aim of increasing knowledge of their similarities and differences; explore in close cooperation with the business sector how rules of origin used in economies RTAs/FTAs might be rationalised; expand dialogue on examining ways to achieve greater consistency in key provisions of RTAs/FTAs in the region; and undertaking a study of bilateral investment agreements and core investment-related elements of existing free-trade agreements with a view to developing principles for investment agreements; and exploring the possibility of building on the model measures for trade facilitation to provide more specificity and content.

Facilitating business activity through an expanded trade and investment agenda

APEC continues to place a central focus on promoting regional growth and cooperation through increased trade and investment liberalisation and facilitation. This has been a core objective of APEC from the outset and covers work in areas such as customs, standards, intellectual property rights, transparency, and competition policy. As trade barriers have gradually fallen, burdensome or inconsistent regulatory frameworks affecting trade and investment have emerged as significant impediments to business activity and competitiveness. APEC should therefore not only place a greater focus on trade and investment liberalisation initiatives that contribute to regional economic integration, but also put an increased

emphasis on reforms that address behind-the-border barriers that impede trade and hinder economic growth. APEC economies have undertaken substantial investment liberalisation and reform in recent years. APEC has an important role to play in further investment reform in the region. The key to improving investment climates in member economies is a home-grown strategy that would remove or reduce the impact of regulatory barriers to investment. It is not sufficient to identify where the barriers are it is equally important to provide help in how to go about removing them in a coherent way. This can be done collectively (e.g. experience-sharing, institutional stocktake) and by assisting member economies to understand fully the benefits of reform. Targeted capacity building that benefits individual member economies reform efforts should also be encouraged.

Agreed actions:
We

will refocus APECs trade and investment liberalisation and facilitation agenda on concrete initiatives that accelerate regional economic integration and reduce behind-the-border barriers, particularly in ways that would improve the investment climate in APEC economies and their competitiveness, including: reducing trade transaction costs by implementing APECs second Trade Facilitation Action Plan addressing in particular collective actions on standards and conformance, customs procedures, e-commerce and business mobility. In particular, we agree to: advance the single customs windows initiative that will provide a strategic direction and common understanding for single windows in APEC economies; and pursue international implementation of the APEC Privacy Framework through the development of a voluntary crossborder system of data privacy rules; launching the region-wide Cooperation Initiative on Patent Acquisition Procedures; launching a customs clearance initiative that would facilitate customs procedures for low-risk shippers; pursuing membership in the APEC Business Travel Card (ABTC) scheme by all member economies; exploring ways to reduce barriers to trade in environmental goods and services; and encouraging collaboration with other international organisations to help achieve the economic and trade goals of APEC member economies. We are determined to improve further the investment climate in APEC economies and the Asia-Pacific region by reducing major impediments to investment. In that regard, we agree to: identify domestic restrictions that have the effect of deterring investment to complement the work done on border measures; develop an Investment Facilitation Action Plan in APEC; give high priority to focused capacity building activities to assist investment climate reform and promote investment liberalisation

and facilitation, for example: the use of diagnostic tools developed by relevant international organisations; expand dialogue on how APEC member economies undertake investment policy reform and share the experiences and lessons among member economies; and undertake work on risk-sharing Public-Private Partnerships, where appropriate, as a means of increasing investment levels.

Supporting structural reform

Addressing structural impediments to growth, investment and competitiveness will have positive economic follow-on effects for the region. Appropriate domestic policies and targeted structural reform policies remain essential for achieving higher productivity and international competitiveness. The Busan Roadmap and the Hanoi Action Plan help pave the way for advances on the structural reform front: yet structural reform is specific to an economy and dependent on unilateral action. Such reforms can also be politically difficult. All economies can learn from each other and share best practices. Within APEC, there is considerable scope for assisting each other through individually tailored capacity-building programs.

Agreed actions:
We

will strengthen APECs work on structural reform and provide greater resources and institutional capacity to support it. In this regard, we will: strengthen the capacity of the APEC Secretariat to assist member economies in policy dialogue on structural reform and in strengthening domestic institutions and policies that support the reform process; identify and prioritise reform initiatives under the five Leaders Agenda on Structural Reform (LAISR) themes of competition policy, regulatory reform, strengthening economic and legal infrastructure, corporate governance and public sector management with the best potential to improve economic growth and trade; accelerate the work being undertaken under the Private Sector Development Agenda, using the World Banks Ease of Doing Business indicators as a guide to best practice; and provide high-level guidance for this agenda by calling a meeting on structural reform issues at a ministerial level.

Strengthening financial markets

Recalibrating and bolstering APECs work on financial sector issues geared toward promoting regional economic integration would do much to promote growth and reform in the region. Well-functioning financial sectors are necessary for facilitating investment as they provide markets and intermediaries for matching savings and financing requirements, exercising market discipline and spreading risks. Underdevelopment of financial sectors in some APEC economies, combined with a lack of

harmonisation and coordination in regulation and enforcement, create impediments to domestic and cross-border investment in the region. Financial sector reform priorities include strengthening legal and regulatory frameworks, in particular addressing gaps in property rights, creditor rights and insolvency regimes in some economies; making improvements in disclosure and corporate governance requirements; and improving physical infrastructure, such as payments systems.

Agreed actions:
We

will intensify efforts to strengthen and deepen financial markets within the APEC region. In this regard, we will: explore options to secure diversified and deeper capital markets; address domestic structural policies and systems that pose barriers to deepening and developing financial markets through capacity building and information sharing in ways that corresponds to member economies individual circumstances; and examine options for greater cooperation in the development of financial systems and capital markets and identify appropriate capacity-building and information-sharing initiatives, including initiatives to enable financial institutions in APEC economies to achieve global standards.

Sectoral issues and private sector engagement

APEC has a long history of promoting economic growth and reform on a sector-by-sector basis, convening regular sectoral ministerial meetings to address prominent new and ongoing issues, in such areas as Energy, Mining and Transportation. In light of the focus Leaders are placing on promoting regional economic integration, these ministerial meetings should recalibrate their agendas to fulfil more effectively this broad mandate. APECs work in recent years has benefited from dialogue and cooperation with the business community, which is a key driver of economic integration in the region. As APECs work on regional economic integration intensifies, it will be important to maintain close engagement with the APEC Business Advisory Council (ABAC) and other representatives of the business community.

Agreed actions:
We

instruct APEC to place a greater focus in sectoral ministerial meetings on initiatives that promote economic development and integration in the APEC region. This may include: TransportReview the implementation of the APEC Eight Options for More Competitive Air Services (air carrier ownership and control, doing-business matters, air freight, multiple airline designation, tariffs, charter services, cooperative arrangements between airlines, and market access) and identify further steps to liberalise air services in accordance with the Bogor Goals;

identify measures to improve maritime port efficiency and foster competition in maritime transport; Minerals and miningExamine the recommendations made in the 2007 study on impediments to trade and investment in mining and propose possible actions for APEC by 2008 APEC Ministerial Meeting; EnvironmentSupport the work being done in ICAO to develop a balanced approach to addressing emissions from aviation operations; TelecommunicationsImplement mechanisms to achieve the Asia Pacific Information Society; Small and Medium-Sized Enterprises (SMEs)Promote the appropriate economic environment to foster the establishment, growth and development of micro, small and medium-sized enterprises and develop strategies to increase their competitiveness in the global trading system; and EnergyCommission an expert study to identify barriers to trade and investment in energy, including behind-the-border barriers, to the adoption of new, cleaner and more efficient fuels and technologies. Form an APEC Energy Investment and Trade Roundtable of senior energy, environment, finance and trade experts, plus private sector representatives, to develop a plan of action to address identified barriers, tailored to the needs of individual economies. We will strengthen dialogue and cooperation with the private sector, including through the APEC Business Advisory Council (ABAC). We will also intensify efforts to strengthen APEC public-private sector dialogues to promote regional economic growth and integration and improve the business environment. We instruct officials to work with ABAC to identify potential joint activities that would benefit the APEC business community by facilitating trade and investment and addressing structural reform issues. We also instruct officials to explore new work in APEC on issues expected to impact on the regions economic growth and development over the longer term, and their implications for regional economic integration.

Strategic approach to expanding capacity building

Strengthening regional economic integration will yield better results if it is accompanied by targeted capacity-building activities. This strategic approach should place a priority on carrying out the specific recommendations in this report and promoting regional economic integration generally. A number of the recommendations suggested in the preceding sections are capacity-building in nature. A more focussed and long-term approach in addressing the capacity-building needs of APEC members would contribute to more coordinated effort and outcome in enhancing regional economic integration.

To increase APECs effectiveness in promoting such integration, relevant expertise and funding should be provided in response to identified capacity-building needs.

Agreed actions:
We

will develop and implement capacity-building activities in support of APECs work on regional economic integration. In that regard, we will: provide targeted trade-related technical assistance and capacity building to strengthen capacities of developing economies to participate in the multilateral trading system and ultimately better use trade policy to help achieve their development goals; strengthen the APEC Secretariats ability to provide analysis and evaluation capacity, and assist in coordinating related capacity building for the development and implementation of APECs trade, investment and economic reform agenda, including through a new Policy Support Unit and a dedicated evaluation unit in the Secretariat; develop and implement longer term sustainable capacity building projects reflecting the extended time horizons involved in undertaking work on regional economic integration; ensure that the allocation of APEC resources reflects priorities in Leaders Declarations and Ministerial Statements, including promoting regional economic integration; encourage contributions to the APEC Support Fund by member economies and other interested parties; encourage contributions by member economies to the Trade and Investment Liberalisation and Facilitation Fund; and encourage engagement with international financial institutions and other relevant international organisations.

Attachment
Free-trade agreements in the APEC region
The development of intra-APEC free-trade agreements began slowly. The Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA) led the way in 1983. It was followed in 1992 by the ASEAN Free Trade Agreement (AFTA) in 1992 and the North American Free Trade Agreement (NAFTA) in 1994. Other agreements concluded in the 1990s were those between Canada and Chile (1997) and Mexico and Chile (1999). The number of agreements entering into force has picked up greatly in this decade. In 2001 there was New ZealandSingapore, followed in 2002 by JapanSingapore and the following year by SingaporeAustralia. In 2004 ChileKorea, ChinaHong Kong, China, United StatesChile and United StatesSingapore were added to this list. In 2005 AustraliaUnited States, JapanMexico, New ZealandThailand and ThailandAustralia entered into force. A further four followed in 2006: ChileChina, JapanMalaysia, KoreaSingapore and the P4 Agreement (Brunei Darussalam, Chile, New Zealand and Singapore) and JapanChile in 2007.

Several agreements are awaiting ratification by the parties. Among these are IndonesiaJapan, JapanBrunei, JapanPhilippines, JapanThailand, KoreaUnited States and United StatesPeru. Map 1 on page 23 shows clearly the growing number of linkages between economies in the APEC region. Many other bilateral agreements are at various stages of negotiation. Additionally, several feasibility studies now under way suggest that economies are increasingly prepared to look at new combinations and that the trend towards free-trade agreements will continue for some yet.

Plurilateral free-trade agreements

AFTA and NAFTA (the largest free-trade agreement in existence), are early examples of plurilateral free-trade agreements in the APEC region. In both cases, the parties are in the same geographical area, and some of them share borders. The P-4 Agreement is different: its members are located on both sides of the Pacific. It is also the only agreement covering international air transport services. Some APEC economies are now examining the possibility of even more ambitious free-trade areas. One of these is the ASEAN+3 free-trade area (ASEAN members plus China, Japan and Korea). Another is the ASEAN+6 proposal (ASEAN members plus Australia, China, India, Japan, Korea and New Zealand). Map 2 on page 24 shows the potential geographical coverage of these agreements.