APEC still on track toward Bogor goals

Dian Triansyah Djani and I.B. Made Bimantara, Jakarta

Many have questioned the achievements of the Asia Pacific Economic Cooperation (APEC) to date. It has been more than 10 years since the Bogor Goals were declared by the leaders of APEC. In essence, the goals were made to achieve free and open trade and investment in the Asia-Pacific region: 2010 for industrialized economies and 2020 for developing economies.

Analysis of economic data, compiled extensively and scrutinized thoroughly by independent experts has concluded that APEC is "on track" to achieving the Bogor Goals. However, APEC economies should not be complacent, as formidable challenges lie ahead.

The first test is meeting the 2010 goals for industrialized economies. At stake is the credibility of APEC. Fulfilling the commitment of comprehensively reducing barriers to trade in the region would boost its international stature, provide a fresh outlook and renew APEC's energy. Conversely, the failure to achieve those goals would slide APEC into economic cooperation irrelevance and would open APEC's floodgates to even more discussions and initiatives far beyond the economic field.

A symposium held recently in Korea to assess APEC's progress underlined the importance of individual and collective action plans to open markets.

Two independent studies conducted by the Project Team Experts Report and the Center for International Economics reflected the main accomplishments of the APEC economies and to some extent, Indonesia.

It was found that trade and investment barriers across the APEC region fell from 16.6 percent in 1988 to 6.4 percent in 2004. Foreign direct investment inflow increased by more than 50 percent, while outflow more than doubled.

Furthermore APEC economies have also come closer to attaining the UN Millennium Development Goals than other nations.

According to independent experts commissioned by APEC to review its progress, Indonesia has passed the halfway mark on the road to achieving the Bogor Goals, and in some cases has gone beyond the World Trade Organization (WTO) commitments.

Unquestionably, progress has been made, but many difficult questions remain unanswered.

First, barriers remain in key sectors, particularly in textiles, clothing and footwear, motor vehicles and agriculture. These sectors are the most labor-intensive ones, and agriculture represents a politically sensitive industry.

Second, for the high-income APEC economies striving to meet the 2010 deadline, a crucial issue here is whether they will be able to address a number of lingering issues, i.e. sectors with significant levels of protection.

Third, although APEC has proved to be helpful in shaping constructive responses to issues such as communicable diseases and terrorism, on the other hand, such engagements have to draw upon APEC's limited resources. APEC, by its original design, was intended as an economic forum. Policy consultations extending beyond the economic field, however relevant they are to the current world situation, divert the focus of APEC from its core business.

The APEC Ministers Responsible for Trade (MRT) recently concluded a meeting on Jeju Island, Korea, with the main agenda of ensuring APEC's continued support for the WTO/Doha Development Agenda (DDA) round of negotiations and to review the progress made toward the Bogor Goals.

The former agenda is the key to attaining the Bogor goals, particularly to resolving difficult and sensitive issues that cannot solely be addressed through APEC. Whilst the latter ensures that APEC is indeed on the right track and recommends a number of adjustments as necessary.

Accordingly, it is fitting that APEC's theme for 2005 is "to meet the challenge and make the change."

One of the priorities for this year is to take stock of achievements made in the fields of liberalization and facilitation as well as the difficulties in realizing them.

APEC is on the right path and can be proud of its achievements thus far. Nevertheless, APEC should remain cautiously optimistic.

The writers are officials at the Directorate of Asia-Pacific and African Intra-Regional Cooperation at the Indonesian Foreign Ministry. The views expressed in this article are solely those of the authors and do not necessarily reflect the views of the ministry.