APEC’s Targets
APEC’s Targets
And top on the agenda is resisting protectionism and speeding up economic integration.
In a sign of the troubling global economy, trade and finance officials came together for the first time, to discuss ways to help businesses cope with the downturn.
In a span of just two months, the International Monetary Fund (IMF) revised the global GDP from 2.2 per cent to 0.5 per cent in January.
Meanwhile, the World Bank projected that global trade will contract to 2.1 per cent this year.
Together, APEC senior officials will lay the groundwork that will help leaders collectively respond to the economic crisis.
In the last meeting in Peru three months ago, APEC leaders had expressed confidence they can overcome the global financial crisis in 18 months.
To meet that target, trade and finance officials made an unprecedented move to discuss trade financing and ways to build capacity for social resilience.
Ninety per cent of the world’s trade today requires trade financing. But given credit tightening in the market, businesses are finding it increasingly difficult to get loans as financial institutions become more risk averse.
The APEC Senior Officials Meeting is an opportunity for global trading partners to share ideas on how to address this problem.
Chairman of Singapore APEC Senior Officials Meeting, Ravi Menon, who is also the second permanent secretary at the trade and industry ministry, said: “The contraction in trade has been exacerbated by a lack or inadequacy of trade financing. Sometimes there are good orders to be met but there isn’t enough credit to finance that trade or there isn’t enough credit insurance to see that trade goes through.”
Another area officials are looking into is social resilience programmes – measures that can help individuals or households tide over the economic crisis.
Mr Menon said: “There is a need to build up through fiscal policy strong resilience elements, safety nets and so on, and to the extent fiscal policies and other policies do this, there will be less pressure from businesses and labour unions to erect trade barriers and protectionist measures.
“If fiscal policy can work harder in this area and can provide some support, some resilience to the most vulnerable in society, then there’ll be less pressure to use trade policies to help industry and protect jobs because that will be unfortunate. That will lead to retaliatory measures and go into a spiral which will only worsen the economic downturn.”
As an added check, APEC officials have also agreed on the need to monitor compliance to the pledge made by APEC leaders last November, to resist protectionist measures.
This will be done by compiling a list of member economies or governments that have put in place financial packages containing protectionist clauses.
Mr Menon said it is something the World Trade Organisation has already started doing.
The list will be presented to trade ministers when they meet in Singapore in July.
Mr Menon said: “We’ll leverage off those lists and seek inputs from the business community to tell us of measures taken by governments and economies that are restrictive to trade and add to business costs and we’ll make a simple compilation, not to pass judgment but an exercise in transparency so that through a process of peer pressure, and moral persuasion, we hope to put a check on these pressures.”
The 10-day Senior Officials Meeting is the first in a series of over 100 meetings to be held in Singapore over the course of the year.
Some 7,000 delegates and heads of state including US President Barrack Obama are expected in Singapore at the APEC Leaders’ Meeting in November.
- CNA/yb/yt
