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U.S. Accomplishments in APEC in 2005

U.S. Accomplishments in APEC in 2005

Michael Michalak, U.S. Senior Official for APEC
Remarks to the Asia Society's Annual APEC 2005 Breakfast Briefing
New York City
December 1, 2005

(As Prepared for Delivery)

Thank you very much for that kind introduction, Tom.

Good morning to you all, and thank you very much for having me. I'm delighted to have the opportunity to take part in the Asia Society's APEC 2005 Breakfast Briefing and to review for you our major accomplishments at the recently concluded APEC meetings in Busan, Korea. I'm particularly honored that Vietnam's Deputy Permanent Representative to the United Nations, Minister-Counselor Nguyen Tat Tranh, is here with us, as well. With Vietnam's chairmanship of APEC beginning in just a few weeks, I look forward, as I'm sure all of you do, to hearing from him about Vietnam's vision for 2006. In advance of my talk, let me also thank NCAPEC's executive director, Monica Whaley, for her service this morning as moderator.

In deference to the considerable APEC expertise in the room, I'll keep my own remarks fairly brief in order to leave plenty of time for the panel discussion and your questions.

Before I get into my remarks, however, let me share a personal reminiscence. I think most of you know that this is my first year as U.S. Senior Official for APEC. Earlier in the year, I attended my first Senior Officials' Meeting in that capacity. I still have vivid memories of the challenges we faced at that meeting: the sharply diverging agendas, the disparate points of view, the endless debates over what language to include in key APEC documents, the seeming inability to come to agreement on even the most basic issues. But enough about the U.S. delegation

Seriously, friends, the United States regards APEC as the most important regional forum in the Asia-Pacific and we will continue to support its work in every way we can. 2005 has been a very productive year for APEC and a year in which the United States advanced important objectives in the areas of trade, public health, security, and anti-corruption. Let me review for you the 2005 accomplishments the United States regards as the most significant.


Doha Development Agenda

As you know, our top goal in APEC in 2005 was to advance free and fair trade in the Asia-Pacific region. Throughout the year, we regarded strong support for the World Trade Organization specifically, the Doha Development Agenda negotiations as the principal means of achieving that goal.

Advancing the Doha negotiations continues to be a top priority within APEC because no other single area of APEC's work holds out such promise for increasing prosperity and alleviating poverty in the region. Earlier this year, in an address to the U.N. General Assembly here in New York, President Bush himself articulated the importance of Doha to the United States and the community of trading nations, stating: "A successful Doha Round will reduce and eliminate tariffs and other barriers on farm and industrial goods. It will end unfair agricultural subsidies. It will open up global markets for services. Under Doha, every nation will gain, and the developing world stands to gain the most The elimination of trade barriers could lift hundreds of millions of people out of poverty over the next 15 years. The stakes are high. The lives and futures of millions of the world's poorest citizens hang in the balance -- and so we must bring the Doha trade talks to a successful conclusion."

I'm pleased to report to you that at the recently concluded APEC Leaders' Meeting in Busan, we achieved a very successful outcome in this critical area. At the urging of President Bush, the 21 APEC Leaders took bold action to ensure an ambitious, market-opening outcome for the Doha Development Agenda. The Leaders issued a strong stand-alone statement underscoring their commitment to achieve a successful conclusion of the Doha negotiations and their determination to provide the strong political leadership necessary to move the negotiations forward at the impending Hong Kong Ministerial. Given the fact that the APEC economies account for about half of global trade and nearly 60% of global output, we are confident that this statement will give the negotiations a good push in the right direction.

Intellectual Property Rights

Another key trade-related outcome of the Leaders' Meeting was in the area of intellectual property rights, or IPR. I certainly don't have to explain to this group the extraordinary importance of this issue to U.S. businesses, and, more broadly, the U.S. economy. But just in case

Perhaps some of you saw a recent study, put out by NBC Universal, that clearly established the importance of IPR protection to the overall U.S. economy. According to the report, U.S. intellectual property industries account for 18 million U.S. jobs and 20% of the U.S. private sector's contribution to U.S. GDP, and contribute 40% of U.S. private sector growth and nearly 60% of the growth of U.S. exportable goods and services.

At the same time, however, the scale of IPR infringement, particularly in the Asia-Pacific region, is enormous. U.S. business executives routinely list the theft of intellectual property as one of the greatest challenges their companies face in the region.

In 2005, the United States made IPR a key priority and, here again, scored a major success for American businesses and workers. Building on President Bush's global initiative to stop trade in pirated and counterfeit goods the STOP! program with which many of you are familiar we secured unanimous endorsement of model guidelines to 1) reduce trade in counterfeit and pirated goods, 2) protect against unauthorized copies, and 3) prevent the sale of counterfeit goods over the Internet. What's more, the APEC Leaders agreed to build on this important work in 2006 and beyond in close consultation with the private sector.

The adoption in APEC of these model guidelines, which are essentially hands-on blueprints for protecting and enforcing intellectual property rights, is the result of protracted and vigorous negotiations with key APEC trading partners. It is also the result of extensive collaboration with the private sector, principally, through the APEC Business Advisory Council, or ABAC. Our successful work on the vitally important issue of IPR is a great example of how APEC can and does work effectively with the private sector to produce tangible, relevant results.

Trade Liberalization and Facilitation/"Busan Business Agenda"

Clearly, APEC scored major successes on Doha and IPR in 2005. It also did good work to promote continued trade liberalization and facilitation. At their November meeting, the Leaders agreed to take further action to facilitate trade and investment, improve transparency and regulatory practices, and simplify administrative procedures.

Toward these ends, the Leaders adopted a plan of action, known as the "Busan Business Agenda," to improve the business climate in the Asia-Pacific region in real, measurable ways. Building on APEC's earlier achievements in cutting transaction costs in the region, the Busan Business Agenda pledges to reduce these costs by another five percent by 2010. The Agenda also calls for expanded work within APEC to increase investment liberalization and facilitation. As with the issue of IPR, the input of the business community was integral to the formulation of the Busan Business Agenda.

Data Privacy Framework

Before I move on to our other major accomplishments in APEC in 2005, let me just say a few words about the APEC Data Privacy Framework, another very positive trade-related outcome of the November meetings. Whether in the public or private sector, the free flow of information is vital to the conduct of business. Those of you who have long operated in the Asia-Pacific are probably well aware that the regulatory regimes governing information flows and privacy requirements are often incompatible from country to country. This means that doing something as basic as e-mailing a phone list from Company X's office in Kuala Lumpur to its sister office in Jakarta can be problematic, if not well-nigh impossible.

In Busan, APEC members adopted a Privacy Framework that 1) lays out a comprehensive set of common principles that enable accountable data flows while preventing impediments to trade, and 2) provides for technical assistance to those APEC economies that have not addressed privacy from a regulatory or policy perspective. The adoption of the APEC Privacy Framework will have a real and very positive impact on the ability of U.S. and other companies to transact business across borders in the Asia-Pacific region and will create the necessary foundation for the development of robust e-commerce in the region. This was yet another significant trade-related outcome of the November meetings.

Avian Influenza

Let me turn now to an issue that has been a source of much commentary and growing concern in recent months: avian influenza, or AI. Even the most conservative estimates indicate that an influenza pandemic, which could emerge from AI, could take hundreds of thousands, if not millions, of human lives and cost the global economy tens, if not hundreds, of billions of dollars. The long-term economic effects of such an outbreak would be seen, and felt, in the disruption of supply chains, loss of consumer confidence, and diminished human resources.

As all of you know, President Bush himself has taken up this issue recently, launching an International Partnership on Avian and Pandemic Influenza and addressing the topic directly in a number of recent speeches and remarks. APEC has been one of the key fora in which the United States has worked to mitigate the possibility of an AI outbreak.

This year, the United States co-sponsored, and the APEC Leaders endorsed, a strong initiative on "Preparing for and Mitigating an Influenza Pandemic." The initiative will help ensure the region's ability to prevent, prepare for and respond to a potential pandemic. Under the terms of this initiative, the Leaders agreed to:

collaborate in a transparent and open manner, provide timely and complete reporting of avian influenza cases, implement multi-sectoral preparedness plans, share data and samples, base travel and trade decisions on science, undertake early implementation of the revised International Health Regulations, enhance collective APEC work to strengthen regional capacity, and support the International Partnership on Avian and Pandemic Influenza.

This U.S. co-sponsored initiative is an integral part of the United States' overall effort to prevent and manage the threat of an influenza pandemic and it was one APEC's most important achievements this year.


If 2005 was a good year for the United States in terms of our accomplishments in the areas of trade and public health, then so, too, was it a good year in terms of our successes in APEC to enhance regional security. Indeed, as former Secretary Powell once noted at an APEC Ministerial Meeting, the very notions of prosperity and security are fundamentally inseparable. In 2005, the United States and other APEC members worked hard to implement the security commitments undertaken by the Leaders just over two years ago in Bangkok and I'm happy to report that we made very good progress.


At their meeting in Busan, the APEC Leaders endorsed a U.S. initiative to reduce the threat associated with man-portable air defense systems, or MANPADS essentially shoulder fired rocket-launchers. The attack on a civilian aircraft in Kenya in 2003 demonstrates the steep economic toll even a failed attempt to use MANPADS can have on an economy that depends on civil aviation and tourism. Under the terms of the initiative, each APEC member committed to undertake a MANPADS Vulnerability Assessment at an international airport by the end of 2006 to identify areas for aviation security improvements. We also provided flipchart guides for APEC customs officials to help identify MANPADS components and prevent smuggling of these dangerous weapons and their constituent parts.

Radioactive Sources

The United States also worked effectively in APEC to strengthen control over radioactive sources that could be used to make "dirty" bombs. We secured commitments from all APEC members to aim for implementation, by the end of 2006, of the International Atomic Energy Agency "Code of Conduct" and "Guidance on the Import and Export of Radioactive Sources." These are important steps toward the desired end result: maximizing control over these potentially dangerous materials and keeping the Asia-Pacific region secure.

APEC Framework for the Security and Facilitation of Global Trade/ Regional Movement Alert List (RMAL)

In addition to these notable successes, the United States encouraged APEC members to implement the "APEC Framework for the Security and Facilitation of Global Trade," which will help secure and facilitate the global supply chain within the APEC region from exploitation by would-be terrorists, among others. Given that the APEC economies are home to 21 of the world's 30 top container ports, this is a particularly important area of APEC work.

In collaboration with Australia, we also launched a pilot project on the Regional Movement Alert List, an immigration alert system to identify travelers using lost or stolen passports. We plan to expand work in this important area in 2006.

Export Controls

Finally, we also advanced in APEC this year efforts to help APEC members develop effective export control systems. At a conference that the United States co-hosted with Vietnam about a month ago in Honolulu, APEC members explored the legal and regulatory frameworks, licensing procedures, and enforcement measures associated with effective export control regimes.

In short, we moved the APEC security agenda forward in 2005 in substantive and meaningful ways, and we look forward to building on this work during the Vietnam year.


Before I conclude my remarks, I want to call attention to one other noteworthy area of APEC accomplishment in 2005, specifically, in the area of anti-corruption and transparency. As many of you know, APEC undertook some groundbreaking work in this important area last year and we built on that solid foundation this year to register some significant progress.

In Busan, the APEC Leaders agreed to intensify regional cooperation to:

deny safe haven to officials and individuals guilty of corruption, make the implementation of the principles of the United Nations Convention Against Corruption a top priority, and support the commitment on the part of business leaders to operate their corporate affairs with the highest level of integrity and sound corporate governance practices.

Here again, the business community was a driving force for positive action, and that shouldn't surprise us. After all, according to the World Bank, corruption is the single biggest impediment to economic growth in the developing world one that saps perhaps a trillion dollars from the world economy annually and businesses have an enduring interest in doing everything possible to minimize corruption's growth-sapping impact on the Asia-Pacific business environment. We welcome the private sector's pledge to continue to fight corruption and look forward to working with U.S. companies to move forward on this issue in 2006.


The achievements I've just enumerated are not an exhaustive listing of APEC 2005 outcomes, but I think they do give you a sense of the breadth of APEC's current agenda and at least some sense for what APEC's priorities will be going forward into the Vietnam year.

Under Vietnam's able leadership, the APEC economies are working together as we speak to craft an ambitious agenda for 2006 that both builds on the excellent results of 2005 but also leaves room for work on priorities that might arise unexpectedly in 2006. Having worked closely with my capable Vietnamese colleagues in 2005, I have every confidence that the Vietnam year will yield substantive results for the United States and all the other APEC members. And I look forward to working closely with our Vietnamese hosts toward that end.

Let me conclude my remarks this morning with a few observations about the importance of the Asia-Pacific region to the United States. I don't think anyone here at an Asia Society event! would disagree that the Asia-Pacific holds both enormous potential benefits and serious challenges for the United States. The region is home to some of our most stalwart security and trade partners and, of course, to China, which is rapidly assuming a prominent place on the global stage. The Asia-Pacific region accounts for over a third of the Earth's population; a quarter of world GDP; a disproportionate share of global growth; and a quarter of U.S. imports and exports, including about 40 percent of our agricultural exports in all, some $750 billion in two-way trade with the United States.

In every regard geopolitically, militarily, diplomatically, economically, and commercially Asia is vital to the national security interests of the United States. For that reason, we are in the region to stay, and we will continue to work hard in APEC, the Asia-Pacific's premier regional forum, to advance the twin causes of prosperity and security for ourselves and our partners.

Thank you very much. Now, I look forward to hearing from our distinguished panel and from all of you.

Released on December 5, 2005


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