Compilation of Weekly Presidential Documents - October 29, 2001 - APEC Economic Leaders' Declaration, Shanghai, China

Monday, October 29, 2001


Volume 37, Issue 43; ISSN: 0511-4187


APEC Economic Leaders' Declaration, Shanghai, China



� October 21, 2001



� Meeting New Challenges in the New Century



� 1. We, the Economic Leaders of APEC, gathered today in Shanghai for

the first time in the twenty-first century. We are here to explore

ways to meet the new challenges confronting us. Convinced of the

great potential of the Asia-Pacific region, we have resolved to

achieve common prosperity through broader participation and closer




� 2. Our meeting has taken place at a crucial juncture. The major

world economies are experiencing a slowdown more severe than

anticipated. Most economies in the Asia-Pacific region have

experienced an economic downturn, with some emerging economies

particularly affected by unfavorable external market conditions. In

addition, the terrorist attack on the United States risks

undermining some industries as well as consumer and investor

confidence. In the long run, a major challenge for the Asia-Pacific

community is to manage the profound changes brought forth by

globalization and the New Economy and to benefit from the

opportunities that abound.



� 3. As the premier forum for regional economic cooperation in the

Asia Pacific, APEC is well suited to play a leading role in helping

its member economies embrace these opportunities and challenges. We

wish to send a clear and strong message on the collective resolve of

the Asia-Pacific community to counter terrorism. We are determined

to reverse the current economic downturn and maintain public

confidence at a time of uncertainty by fighting protectionism and

committing to the launch of the new WTO round at the upcoming WTO

Ministerial Conference. These efforts are consonant with and

contribute to the pursuit of the APEC vision of peace, harmony and

common prosperity.



� 4. Inspired by such a vision, we are determined to work together

for a more dynamic and prosperous Asia Pacific in the new century by

promoting sustainable economic growth, sharing the benefits of

globalization and the New Economy, and advancing Trade and

Investment Liberalization and Facilitation (TILF). To this end, we

reaffirm our commitment to achieving the Bogor Goals of free and

open trade and investment in the Asia Pacific by 2010 for developed

economies and 2020 for developing economies. We have also charted

the course for the development of APEC in its second decade and

beyond by adopting the Shanghai Accord.



� Promoting Sustainable Growth



� 5. We affirm our unwavering confidence in the medium and long-term

growth prospects for the Asia-Pacific region since the fundamentals

of the region remain sound. As reforms and restructuring following

the 1997-1998 financial crisis take effect, many emerging economies

are now in a much stronger position to cushion themselves against

the impact of the economic slowdown and unexpected shocks.



� 6. We undertake to adopt appropriate policies and measures to

increase economic growth and resolve to enhance macroeconomic policy

dialogue and cooperation not only to resume growth but also to build

a stronger foundation for sustainable growth and broad-based

development. It is important for all economies to take timely policy

actions to strengthen markets and facilitate an early pick-up in

global economic activity.



� 7. In this context, we pledge to accelerate our domestic efforts to

build capacity and deepen structural reform so as to strengthen the

market fundamentals across the region. To this end, we emphasize the

importance of sound economic policies and corporate governance as

well as the important role and responsibility of governments in

shaping the legal and regulatory framework that encourages

competition and innovation, with an increased emphasis on capacity

building. Developing the social safety net is a high priority, as it

can make an important contribution to reducing the harmful effects

of economic shocks on vulnerable groups. As noted in the 2001

Economic Outlook, enhancing financial efficiency is also essential

to promoting growth. We thus welcome efforts made in these areas in

APEC, including strengthening economic legal infrastructure,

supervision of capital markets, corporate gover-nance, and

implementation of international financial standards, as exemplified

by the work done through the Finance Ministers' process. We also

welcome contributions by Pacific Economic Cooperation Council (PECC)

in these areas. We direct responsible Ministers and Officials to

build on their work.



� 8. Recognizing the importance of promoting financial stability and

crisis prevention, we stress the need to strengthen the

international financial system. We urge continued efforts to enhance

the effectiveness of mechanisms to prevent the recurrence of

financial crisis. We welcome the important steps that have been

taken to strengthen the international financial architecture

including, for example, the review by the Financial Stability Forum

of the effectiveness and the progress in implementing the

recommendations from the Working Group on Offshore Financial Centers

and Highly Leveraged Institutions. We emphasize the importance of

ensuring that representation on the International Monetary Fund

(IMF) Board and IMF quota/share allocation appropriately reflects

the current world economy. While the IMF and other international

financial institutions play a pivotal role, regional cooperation can

also be very useful in complementing efforts by these institutions

to promote financial stability. In this connection, we welcome the

substantial progress in implementing the Chiang Mai Initiative to

strengthen cooperative financing arrangements among the Association

of Southeast Asian Nations (ASEAN) countries and China, Japan and

the Republic of Korea. We also note the ongoing work in the Manila

Framework Group. We support all these efforts and urge them to be




� 9. The current economic slowdown underlines, above all, the

importance of APEC's work towards more open and stronger economies.

We reaffirm our unyielding commitment to free and open trade and

investment and resolve to work together to fight against

protectionism in all forms. We render the strongest support for an

open, equitable and rules-based Multilateral Trading System, which

is essential to sustain global economic growth. APEC must also stay

on track with its own agenda on trade and investment and on capacity




� Sharing the Benefits of Globalization and the New Economy



� 10. We are convinced that globalization is a powerful vehicle that

stimulates economic growth, and holds great promises for delivering

higher living standards to people and improving social well-being

for our communities. We acknowledge that the New Economy has broad

potential to raise productivity, stimulate innovation in economic

organization and entrepreneurship, and create and disseminate

knowledge and wealth. However, the opportunities arising from these

processes are not sufficiently shared among and even within

economies. Hence the need to enable all individuals in our

communities to benefit from them. We emphasize the importance of

capacity building, both human and institutional, as a key answer to

the challenges and opportunities of globalization and the New

Economy. Capacity building constitutes a key element of the balanced

approach essential to the success of APEC along with market opening

and full participation.



� 11. In this context, we reiterate that human capacity building

(HCB) remains a central theme this year and the years ahead. We

commend the success of the High-Level Meeting on Human Capacity

Building, and welcome the Beijing Initiative as a comprehensive set

of principles for human capacity building, which also provides

opportunities for further work in the New Economy. We call on APEC

fora and member economies to under-take follow-up activities in

specific areas of their interest in the spirit of developed and

developing economies complementing each other. We support the

engagement of all key stakeholders in the region and, in particular,

the establishment of the partnership of government, business,

academic and training institutions for this purpose. We welcome the

launch of the Consortium for APEC Cyber Education Cooperation

initiated and sponsored by the APEC Education Foundation, the Human

Capacity Building Promotion Program and the APEC Finance and

Development Program. We also welcome the outcomes of the 4th Human

Resources Development Ministerial meeting and support the Kumamoto

Statement that makes a contribution to APEC Human Resources

Development activities in the 21st Century as a basis for advancing

social and economic development and the sharing of prosperity by our




� 12. Reaffirming the importance of Economic and Technical

Cooperation (Ecotech) in achieving equitable growth and sustainable

development, we welcome the progress that APEC has made in advancing

Ecotech goals and underscore that Trade and Investment

Liberalization and Facilitation and Ecotech should be mutually

reinforcing. We call for efforts to this end to be further

strengthened. We commend the formulation and submission of Ecotech

Action Plans by individual member economies as a major step forward

for promoting sound and balanced development of APEC and ask

Ministers and Officials to develop the exercise as lessons are




� 13. We also welcome the progress made in other areas of Ecotech. We

endorse the APEC Strategy for Combating Infectious Disease and call

on members and relevant fora to implement its recommendations.



� 14. Given the importance of Small and Medium-sized Enterprises

(SMEs) and micro-enterprises, we instruct Ministers and Officials to

build on APEC's Integrated Plan of Action for SMEs and place special

emphasis on micro-enterprises. In this context, we welcome the High

Level Meeting on Microenterprises to be hosted by Mexico next year.



� 15. Building on work done in Brunei last year, we have made further

progress by formulating and delivering a long-term, forward-looking

and more action-oriented e-- APEC Strategy for the development of

the New Economy through the promotion of information and

communications technology (ICT) and its application in our region.

The goal is to build APEC towards a digital society, with higher

growth, increased learning and employment opportunities, improved

public services and better qualities of life by taking advantage of

advanced, reliable and secure ICT and networks and by promoting

universal access. Such a society should bring equal opportunities

and widely shared benefits for all member economies and individuals,

including women, the disabled and others. We commend the

crosscutting character of the e-APEC Strategy and urge APEC fora and

member economies to implement the programs for collective and

individual actions set out in the Strategy, as appropriate. Under

the current circumstances, the early implementation of the Strategy

will also support the revival of the ICT sector. We also welcome the

progress in advancing e-commerce.



� 16. In September 2002 many of us will be meeting in Johannesburg

for the World Summit on Sustainable Development, to reinvigorate our

commitment to sustainable development in pursuit of enhancing

economic growth, promoting human and social development and

protecting the environment as interdependent objectives. We will

consider how APEC, which has undertaken a broad range of activities

in this area, can contribute to the success of the World Summit and

take forward the outcomes in its work program.



� 17. We realize that there is an ongoing public debate on the

benefits and costs of globalization. Such debates are healthy when

they are informed by rigorous and comprehensive analysis of the

impact of globalization. The time has come for APEC to come forward

and lead the public debate in a constructive manner. We instruct

Officials to convene an APEC Dialogue on Globalization and Shared

Prosperity, focusing on, among other issues, structural adjustment

and its impact. At the same time, APEC should reach out to business

and other stakeholders to communicate APEC's objectives, activities

and benefits to ensure that they participate in and benefit from the

APEC process and globalization at large. In particular, we thank

APEC Business Advisory Council (ABAC) for its report and value the

interaction with the Council and other business representatives. We

also direct our Ministers and Officials to develop and implement

programs to give effect to the APEC Communications and Outreach

Strategy as well as the conclusions of the Ad Hoe Group on APEC




� 18. Noting that sustainable growth in the APEC region also requires

the ability to feed a growing and increasingly prosperous

population, Leaders call for accelerated implementation of the APEC

Food System initiative. Recognizing the benefits of biotechnology in

improving productivity, increasing nutrition, and reducing the

environmental impact of agricultural production, we reaffirm the

importance of safe introduction and use of biotechnology products

based on sound science. We also welcome the initiative to hold a

policy-level dialogue on agricultural biotechnology and call for

more related capacity building activities.



� 19. We take satisfaction at the significant progress made, through

the leadership of the Ad Hoc Group on Gender Integration, in the

capacity of APEC to address gender equity in its work. Our

commitment to a wide distribution of the economic opportunities of

our era requires the application of gender perspectives in APEC's

work, we welcome the decision to hold a Second Ministerial Meeting

on Women in Mexico in 2002, as an opportunity to make further




� Supporting the Multilateral Trading System



� 20. Trade and investment liberalization and facilitation hold

another key to realizing our vision for reduced disparities and

common prosperity. They have taken on increased importance at a time

when rapid changes are reshaping the global marketplace. Hence, we

commit to further efforts in advancing trade and investment

liberalization and facilitation both within our region and globally.



� 21. In November, a major decision will be taken at the Fourth WTO

Ministerial Conference. Its outcome will have long-term implications

for our future. Our choice is unmistakably for a stronger

Multilateral Trading System with greater opportunities for all. We

strongly support the launch of the WTO new round at the conference,

recognizing that the current slowdown in the world economy has added

to its urgency. We agree that, once launched, the new round should

be concluded expeditiously.



� 22. We emphasize the need for a balanced, sufficiently broad-based

agenda, which is achievable. This is essential to the successful

launch and conclusion of the New Round. We agree that the agenda for

the New Round should include further trade liberalization, the

strengthening of WTO rules, implementation issues, and reflect the

interests and concerns of all members, especially those of the

developing and least developed ones. We also agree that such an

agenda should address the challenges in the 21st century and support

the goal of sustainable development. This will help ensure that the

prosperity flows from growing trade and investment is accessible and

equitably distributed to all. In this context, we also emphasize the

importance that the New Round be supported by all WTO members, and

hence the need for effective implementation of special and

differential treatment and for enhancing WTO's internal




� 23. We reconfirm the commitment to the APEC-wide moratorium on the

imposition of custom duties on electronic transmissions, and agree

on its extension until the Fifth WTO Ministerial Conference,

recognizing the importance of relevant WTO agreements for electronic




� 24. We reaffirm the importance of APEC WTO-related capacity

building activities which realize the objectives of the Strategic

APEC Plan as a unique, substantial contribution to strengthening the

Multilateral Trading System, and call for the accelerated

implementation of the Plan to assist developing economies in

implementing the WTO agreements.



� 25. We applaud the conclusion of all negotiations on the terms for

China's membership in the WTO as a historic development that not

only helps make WTO a truly world organization but also reinforces

the underpinnings for global economic cooperation. We urge that the

decision on final approval of China's accession be taken at the

upcoming Ministerial Conference. We also reiterate strong support

for the final approval of the accession by Chinese Taipei at the

Conference and the advancement of WTO accession by the Russian

Federation and Viet Nam.



� 26. We reaffirm that regional and bilateral trade agreements should

serve as building blocks for multilateral liberalization in the WTO.

We affirm that the existing and emerging regional trading agreements

should therefore be consistent with WTO rules and disciplines. We

also believe that these arrangements should be in line with APEC

architecture and supportive of APEC's goals and principles. We note

the initiatives on exchange ofinformation in this regard.



� Sharpening the Vision for the Future



� 27. APEC has come a long way since its inception in 1989. So has

the world around it. These changes have not in any way lessened the

need for a vehicle of cooperation like APEC in our region. On the

contrary, they have made it more compelling for us to remain fully

committed to the APEC process, to the vision of a peaceful and

prosperous Asia-Pacific community of diverse yet interdependent

economies that has evolved from Seattle to Brunei, and above all, to

the Bogor Goals. We also reaffirm our belief in the unique APEC

Approach based on the fundamental principles of voluntarism,

consensusbuilding, combination of individual and collective actions,

flexibility, comprehensiveness and open regionalism, which has

inspired and underpinned our successes.



� 28. At the same time, we recognize that APEC must demonstrate its

dynamism in advancing with the times by responding and adapting to

changes in the global and regional economy. As it enters the second

decade, it is important for APEC to enrich, update and sharpen its

vision for the future. In this respect, we envision that APEC's

objectives in the second decade are to make continuous progress in

achieving the Bogor Goals; deepen the spirit of community by sharing

the benefits of growth more widely and equitably; and build APEC

into a closer, stronger partnership for regional economic




� 29. To this end, we announce today the Shanghai Accord as a

strategic, forward agenda for the development of APEC in the coming

years. The Accord not only gives voice to our common resolve to

fulfill our commitments, it also stands as a template laying out

some key steps to be taken to achieve our Goals and Objectives.

Reflecting the diversity of APEC's membership, it incorporates trade

and investment as well as economic and technical cooperation as two

mutually supportive and reinforcing elements.



� 30. In the Shanghai Accord, we commit to:



� Broadening APEC's vision for the future by identifying a conceptual

and policy framework to guide APEC in the new century. Such a

framework recognizes the changes entailed by globalization and the

New Economy and reflects the need to extend the APEC agenda to cover

reforms and capacity building at both domestic and international




� Clarifying APEC's roadmap for achieving the Bogor Goals on schedule

with a mid-term stocktake of the overall progress in 2005, including

by broadening and updating the Osaka Action Agenda, adopting a

pathfinder approach in advancing selected APEC initiatives towards

achieving the Bogor Goals, promoting the adoption of appropriate

trade policies for the New Economy, following up on the APEC Trade

Facilitation Principles, pursuing greater transparency in economic

governance; and



� Strengthening APEC's implementation mechanism by strengthening the

Individual Action Plan Peer Review process, reinforcing Ecotech and

capacity building efforts.



� 31. We direct our Ministers and Officials to follow up actively on

the Accord. We have no doubt that with our concerted efforts the

vision we set here will over time come to full fruition, culminating

in a stable, secure and prosperous Asia-Pacific community.



� Appendix I Shanghai Accord



� I. Broadening the APEC Vision



� Globalization and the New Economy have transformed the global and

regional economy significantly since the Bogor Goals, bringing

forward extraordinary opportunities as well as challenges. APEC's

vision needs to reflect these changes. While trade liberalization is

at the core of APEC agenda, Leaders also agree that the Bogor Goals

need to be placed within the context of an updated and expanded

vision that addresses trade and investment liberalization and

facilitation and economic and technical cooperation in an integrated

manner to maximize the benefits for all economies in the region. One

of the greatest challenges to materialize such a vision is to

intensify the collective and individual actions that economies take

at domestic and international levels on reforms and capacity

building across a range of areas.



� The strategic goals of the Finance Ministers' Process should also

be reflected in a broader vision for APEC, given the important role

of sound macroeconomic policies, good economic governance, stable

financial systems and greater economic interaction have in improving

prosperity for the region.



� II. Clarifying the Roadmap to Bogor



� Broadening and updating the OAA



� Leaders applaud the work done this year on the Osaka Action Agenda

(OAA), and recognize its importance in reflecting APEC's

accomplishments and ability to respond to changes in our regional

and global situation. Leaders agree that the OAA should be broadened

to reflect fundamental changes in the global economy since Osaka,

such as the development of new economy including through the

implementation of relevant aspects of e-APEC Strategy, and

Strengthening the Functioning of Markets. Leaders direct Ministers

to follow this up. Officials should present an interim report at the

2002 Meeting of Ministers Responsible for Trade (MRT) and a full

report at the 2002 APEC Ministerial Meeting (AMM) on their

recommendations with regard to broadening the OAA.



� Adopting a pathfinder approach in advancing some APEC initiatives



� Leaders reaffirm that those economies ready to initiate and

implement a cooperative arrangement may proceed to do so, consistent

with the Bogor Declaration. Leaders encourage the development of

such "pathfinder initiatives' and agree that in adopting such an

approach, APEC principles of voluntarism, comprehensiveness,

consensus-based decision-making, flexibility, transparency, open

regionalism and differentiated timetables for developed and

developing economies should be observed. Use of 'pathfinder

initiatives' based on a group of members piloting the implementation

of the initiatives, will invigorate progress towards the Bogor Goals

and provide a framework to encourage broader participation through

enhanced capacity building programmes. Leaders also agree that these

initiatives should be transparent and open, with clearly defined

objectives and framework for implementation to encourage the

broadest participation by other APEC members when they are ready to




� Promoting the adoption of appropriate trade policies for the New




� Leaders recognize the importance of adopting appropriate trade

policies to reflect the new context and encourage the development of

the New Economy. As part of this effort, Leaders instruct officials

to undertake by mid-2002 an exchange of appropriate trade policy

information, such as information on the status of liberalization of

services, and adherence to tariff and intellectual property regimes.

On this basis, economies may develop targets by the Ministerial

Meeting in 2002. In this exercise, account should be taken of the

implementation of relevant recommendations endorsed in the e-APEC

Strategy. Given the diversity among member economies, Leaders agree

that the development of the New Economy would also involve

developing and implementing concrete capacity building programs to

improve performance.



� Follow up on the Trade Facilitation Principles



� Leaders instruct Ministers to identify, by Ministerial Meeting in

2002, concrete actions and measures to implement the APEC Trade

Facilitation Principles by 2006 in close partnership with the

private sector. The objective is to realize a significant reduction

in the transaction costs by endeavoring to reduce them by 5 percent

across the APEC region over the next 5 years. Leaders also instruct

Ministers to explore the possibility of setting objective criteria

on trade facilitation, taking fully into account the diversity among

the members as well as progress achieved in respective economies so

far. Leaders also agree that assistance programmes to help build the

capacity of developing economies in trade facilitation is

particularly important.



� Adoption of transparency principles



� Leaders recognize the importance of transparency in economic

governance. In this regard, APEC has developed, menus of options and

principles in different areas that contain transparency provisions.

Leaders direct Ministers to pursue the implementation of APEC's

agreed transparency principles, taking into account economies'

specific circumstances and report on the progress in their IAPs in

2002 and thereafter. Leaders also underline the importance of

well-targeted assistance to help the developing economies make

progress towards greater openness and transparency. Leaders note the

importance of cooperation on e-government for achieving this




� III. Strengthening the Implementation Mechanism



� Strengthening the IAP Peer Review Process



� Leaders welcome the decision by Ministers to strengthen the

Individual Action Plan (IAP) peer review process, and encourage

member economies to volunteer their IAPs for peer review on the

basis of the new approach. Leaders also agree that upon completion

of such a review cycle, involving all volunteer economies, a

mid-term stocktake of the overall progress towards the Bogor Goals

should be undertaken in 2005.



� Strengthening Ecotech and capacity building efforts



� Leaders recognize that in addition to promoting sustainable

development and narrowing disparity, Ecotech helps to enable all

member economies to achieve prosperity through activities that both

directly support trade and investment liberalization and

facilitation and strengthen the competitiveness of our economies.

Leaders applaud the efforts undertaken this year to update the OAA

Part II and call for greater integration of Ecotech efforts with all

APEC priority goals. Leaders underscore the need to give a strong

impetus to ensuring the effective implementation of various Ecotech

initiatives, especially crosscutting issues such as human capacity




� Leaders recognize the importance of substantially enhancing the

profile of Ecotech and improving the coordination and management of

Ecotech activities of all fora. In this context, Leaders welcome the

review to be undertaken on the mandate and role of the SOM

Subcommittee for Ecotech (ESC), and look forward to early progress.

Leaders also recognize the need to encourage the incorporation of

the priorities of micro, small and medium enterprises throughout the

APEC agenda.



� Leaders agree to further develop Ecotech Action Plans (EAPs), as an

instrument to gauge and encourage Ecotech activities, drawing from

the experience and lessons learned in the pilot phase. Leaders also

call on all members to take part in this exercise on a voluntary

basis. Leaders agree that APEC should strengthen ties with

bilateral, multilateral, and private funding entities with a view to

minimizing duplication and maximizing the delivery of capacity

building programs. Leaders instruct Ministers and officials to

intensify Ecotech activities and report the progress to the

Ministerial Meetings next year.



� NOTE: The joint statement was made available by the Office of the

Press Secretary but was not issued as a White House press release.

An original was not available for verification of the content of

this joint statement.





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