I've been Ambassador to APEC (Asia-Pacific Economic Cooperation)
for three Leaders Meetings now. After each meeting, I've been
challenged by you in the private sector and by many others to
prove that APEC succeeded, that APEC is relevant, that the
bicycle is still moving forward.
This year there were many questions before the meeting, even
more, I suppose now. Many ask whether APEC can be part of the
solution to the economic turmoil, or whether APEC can move ahead
on market opening, or even whether APEC can help business do
business in Asia? My answers-- Yes, Yes, and Yes.
But, as I have stressed before, these meetings go beyond 21
Leaders gathering to talk about APEC and the APEC work program.
Leaders meet as Leaders of over half of the world's population,
and half its economic activity. Their instructions are our
guidance for work not only in APEC, but in other multilateral
fora and bilaterally as well. This year, the instructions we have
from Leaders are wide-ranging, and quite profound. Read the
Declaration, not just as a chronicle of what has been done but,
importantly, as a roadmap for what we commit to do -- must do --
in the months ahead.
I don't want to over hype the results, but I don't agree with
those who saw APEC 1998 only as a missed shot at trade
liberalization, or who those who missed the central point of a
speech reiterating Americans' shared belief in the integral
linkage between democracy and economic progress.
Before Kuala Lumpur, some foresaw APEC turning away from its
commitments to enhance cooperation, build a Pacific community and
pursue free and open trade and investment. Instead, APEC
economies have charted a path forward together -- a path based on
restoring growth in Asia, helping to strengthen the international
financial architecture, and making economic governance more
transparent and predictable. We agreed to intensify efforts to
address the plight of the most vulnerable people in this crisis.
We are continuing forward towards our goal of free and open trade
and investment. We are creating new visions -- and long-term
workplans -- to strengthen public/private partnerships in areas
like electronic commerce and natural gas infrastructure
development. APEC accomplished all of this in the face of an
unprecedented economic crisis in Asia. I call this a success.
It is important to note the constructive role Malaysia played in
setting the agenda and being an honest broker in building
consensus for the Leaders Declaration.
The APEC meetings in Kuala Lumpur gave us an opportunity to
garner broad support for the President's strategy for recovery in
the region that he outlined in his September 14th address to the
Council on Foreign Relations.
Some have pointed to the President's non-attendance as a sign of
diminishing U.S. interest in APEC. This simply is not true.
President Clinton was personally involved in pushing his
administration forward to articulate, elaborate and activate our
ideas in response to the financial crisis and, more broadly, our
strategy for APEC. I can assure you all that he would have
greatly preferred to be in Kuala Lumpur, but his counterparts
understood the reasons that kept him home. That said, the Vice
President did a first rate job in helping to shape the Leaders'
discussion at their retreat, and the resulting declaration.
The Leaders' Declaration reaffirms economies' commitment to
macroeconomic policies that promote growth while maintaining
stability, and in this respect emphasizes APEC economies'
consensus that Japan must quickly restore its economic dynamism.
As part of the effort to revitalize private sector growth in
Asia, the U.S. and Japan put forward a new initiative that will
help mobilize financing for economies in the region in support of
their efforts to accelerate the pace of corporate and bank
The devastating social impact of the crisis was a common theme in
the meetings. The needs are critical and fundamental. The
combination of El Nino, sharp currency depreciations, and surging
unemployment has hit families in the region hard.
Secretary Albright spoke at some length on the need to strengthen
the social framework for growth, and she indicated the U.S.
intends to provide an active lead in Asia in this area. She
proposed that APEC work together to develop efficient social
institutions that address economic security at the individual
level. Of course, as Secretary Albright says, the best social
program is job creation. We see bringing sustainable economic
growth to the region as a fundamental part of this social
And finally, news reports not withstanding, there was important
forward movement on sectoral liberalization. We succeeded in
gaining APEC endorsement to move EVSL into the WTO -- our charted
path since Trade Ministers first agreed on sectoral
liberalization at their Montreal meeting last year. A good deal
of work remains in the WTO next year and we will be looking to
New Zealand as APEC Chair to help maintain pressure through APEC.
By agreeing to take the nine sectors intact to Geneva, APEC is
pushing the world system as it pushed forward with the
Information Technology agreement in 1996. Many of you may have
forgotten that the ITA agreement that left Subic Bay had no
product definition, and a number of prominent APEC members still
on the sidelines. Read the statements carefully -- Japan may have
resisted agreement within APEC on fish and forests, but they
[were] part of the consensus to seek agreement on the nine
sectors at WTO. A number of Asian economies substantially
improved their offers -- Korea led in this area. I said in Kuala
Lumpur and I will say again with conviction, EVSL is alive, it
has a passport and it's moving to Geneva, and we intend to work
very hard to achieve binding agreements there that will provide
substantial economic benefit for you here.
Additionally, Ministers pressed ahead in the remaining six
sectors. Notably, this agreement launched an APEC auto dialogue -
- the first regional forum to address trade and investment issues
in the auto sector.
One of those oft-quoted senior Administration officials in Kuala
Lumpur said the Leaders' Declaration is a sober, hardheaded
assessment of the situation in the region -- an assessment
acknowledging that even as progress has been achieved in the
region, there still are many of the challenges ahead. Leaders
simply expressed their confidence that the region has the ability
to restore sustainable economic growth.
Leaders endorsed a number of initiatives President Clinton
announced two months ago -- a new contingent, precautionary line
of credit anchored in the IMF, and more innovative use of
guarantees and other instruments by the World Bank and other MDBs
to spark private capital flows to emerging markets.
They also strongly endorsed the work of the G-22 -- a U.S.
initiative from last year's meeting in Vancouver. Looking ahead,
they agreed work must be done to create a better balance between
risks and benefits of open capital markets. They expressed
concern in the Declaration, and even more at their retreat, over
the vulnerabilities that small economies, and large, face due to
the rapid movements of short term capital. The U.S. will chair a
group to give priority attention to this question, including the
role of hedge funds and other forms of highly leveraged and
One other financial area I'd like to mention is the area of
economic and corporate governance. There was a surprising degree
of consensus on the need for improved governance. Improving legal
systems, increasing the transparency and predictability of
transactions -- these are important aspects of restoring
confidence, and the door is open for officials and you in the
private sector to help APEC economies move forward in this area.
On that score, Leaders and Ministers focused on how to equip
economies with the tools and systems they need to deal with the
risks that come with more open capital markets. Secretary
Albright called for a private sector peace corps to work with
emerging economies on important reform issues, issues like risk
management, improved governance, even establishing the market
tools that can allow stable growth in emerging markets. There
already are models, like the work many from the private sector
are doing in Central Europe through the International Financial
Service Volunteers or the work of the International Executive
Service Corps. Asia needs this help, and a bit of pro bono work
now can provide valuable markets a few years hence. The U.S.
Government will be increasing bilateral funding for technical
assistance in these areas; we'd like some matching support from
the private sector.
We have been working hard this year to get APEC more focused, to
be more outcome-oriented. Beyond the finance area we've also been
busy. Leaders welcomed the idea of an Asian natural gas
infrastructure. And work is proceeding -- U.S. companies will
meet in Houston in February to develop a common approach to the
gas grid concept. This idea isn't about a grand design for
pipeline routes. Rather, it is the vision of individual projects
converging over time that will gather gas from Southeast Asia and
Northeast Asia, and distribute it along the right-of-way, thereby
stimulating economic growth within APEC economies and across
borders into other APEC economies.
APEC also worked hard this year on electronic commerce. Leaders
recognized that this new technology will provide a dynamic way to
stimulate growth. Part of the challenge has been to de-mystify
the concept that there are developed and developing economies in
regards to e-commerce. We have worked hard to convey the fact
that this is a threshold technology for us all, and Asia needs to
catch up. Dozens of companies from around the region participated
actively in APEC activities this year, and we will extend that
universe via the work program we set in the year ahead.
This year APEC succeeded in mapping out a credible strategy to
restore sustainable growth. And it succeeded largely in warding
off the protectionist tendencies one might have expected from so
profound an economic crisis. There are a variety of garden grown
improvements in customs procedures, via the mutual recognition
agreement on telecommunications equipment, or improving air
express delivery procedures that make incremental differences to
many of your businesses. But the fundamental test of Kuala Lumpur
will come in the willingness of APEC economies to flesh out the
details and implement the policies envisioned by Leaders in their
financial discussions, on the social framework for growth, and
broadening support at the WTO for APEC's liberalization package.
We had much the same discussion last year about whether there
were teeth in the Manila framework. This year, today, the
improvements visible in Korea, Thailand, and the Philippines, all
these are real world examples that the Leaders' consensus reached
last year has made a difference this year. APEC must be judged
not just by what it achieves as a forum, but also by the
catalytic role it has on the world stage -- via the G-7, or some
new G-22 type entity, and in each economy.
I'm a firm believer in APEC. But I also am a firm believer that
for APEC to move forward it needs to hear from the private
sector. I'll fall back on an adage I borrowed last year -- Get
informed--get involved--get specific.
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