by Chen Jipeng
BALI, Indonesia, Oct. 5 (Xinhua) -- The Asia-Pacific Economic Cooperation (APEC) shall continue to try out new ideas even though the focus of its work changes along the way, APEC Secretariat Executive Director Allan Bollard said in a recent interview with Xinhua.
In the interview ahead of the APEC Leaders' Meeting in Bali, Indonesia, Bollard said there should be no change to the largely voluntary nature of the APEC approach to regional integration and that it should still be "an incubator of new ideas."
"APEC should be here doing interesting new things, trying out new ideas. Some of them won't work. Some of them will," he said.
The vision of the 21-member regional economic cooperation has always been to achieve economic advancement for the people of the Asia Pacific and the APEC economies. It has not changed much since the early days but that the focus of work done by the organization has changed along the way.
Bollard said much can still be done to further reduce tariffs and non-tariff barriers, especially in agriculture. But the focus has gradually moved to behind-border issues, and the next stage of focus should be on regulatory reforms and harmonization.
These include efforts in behind-borders regulatory issues and harmonization of standards across the different economies, he said.
He also said that APEC is waiting for more announcements to see more clearly the direction of upcoming regional architecture such as Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP) and expects a clearer picture by 2015.
It is important that they do "potentially converge" to eventually lead to a Free Trade Area of the Asia Pacific (FTAAP), a vision endorsed by APEC leaders in 2010, he said.
Bollard, who took office as executive director of the APEC Secretariat at the beginning of 2013 for a three-year term, said the "big label" for APEC in the early days was the Bogor Goals, which the APEC leaders endorsed in 1994.
The focus had been on traditional reduction of barriers to trade and investment and some non-tariff barriers across the region. Since then, APEC has also gone a long way to include behind-border issues on its agenda.
Many working groups have been set up to address practical issues, including those around quarantine at customs, national data standards, business travel and certificates of origin, or in Bollard's words, "all the things that make it easier to move goods, services, capital and people across the borders."
The Bogor Goals of 1994 consist of three pillars such as trade liberalization or tariff reduction, trade and business facilitation, and economic-technical cooperation, in particular, capacity building.
Indonesia is hosting the APEC meetings this year with a focus on attaining the Bogor Goals, increasing connectivity and promoting "sustainable growth with equity."
The average tariffs in the APEC region dropped from about 17 percent in 1989 to 5.7 percent in 2011, which is much lower than the average of 10.3 percent for the rest of the world.
The member economies reached their target of reducing trade transaction costs by 5 percent across the region between 2007 and 2010, by simplifying customs procedures and cutting red tape
It laid the groundwork for all APEC economies to adopt electronic customs processing systems that reduce the average time needed to clear customs, he noted.
In capacity building, APEC has some 50 working groups in different areas, including transport.
Bollard said still much can be done in further reduction of tariffs and non-tariff barriers, especially in agriculture. In 2010, the average tariff in APEC economies in agriculture was 11.9 percent, compared with 4.9 percent for other sectors.
APEC is looking to see if the TPP may take the lead in agricultural tariff reduction, he said.
He said he saw the next stage of APEC's focus to be on regulatory reforms and harmonization of standards.
SUPPLY CHAIN MANAGEMENT, ELECTRONIC COMMERCE
Bollard said supply chain management has featured prominently recently as the economies become ever more interconnected with increasing integration of trade in goods, services and the production chains.
Its importance became markedly obvious following the earthquake in Japan and the floods in Thailand in 2011. APEC has since responded.
"I say that because that's the time when we became very aware of just how integrated production is across borders in the region. That started a lot of work on supply chain management, choke points for supply chains," Bollard said.
The goal for an APEC supply chain action plan is to have an improvement of 10 percent by 2015, by addressing eight priority choke points such as regulatory impediments, customs inefficiencies and inadequate transport networks and infrastructure.
APEC also expects to focus on the technical aspects of electronic commerce, which has seen big developments in recent years.
"We're determined that it be an area that does not swerve into a whole lot of different approaches and different systems but really of harmonized systems and approaches, to make sure that electronic is a driver of more trade and investment mobility, not to be used as a barrier," he said.
Bollard said it was not clear yet what themes China will pick for the agendas in 2014 when it chairs the APEC Leaders' Meeting, but it is expected to be of continuity with the current one.
He expects 2015 to be a year of "quite an examination" of what has been done, what needs to be done and what needs to be recalibrated. Quite a number of work group programs will be either completed or kick off in that year.
--- APEC is committed to implementing a reduction in tariffs to 5 percent or less on a list of environmental goods such as wind turbine blades and renewable energy generating equipment by the end of 2015.
--- APEC economies are working to make doing business in the region easier, cheaper and faster, with a goal of 25 percent improvement by 2015. The priority areas are starting a business, getting credit, enforcing contracts, trading across borders and dealing with permits.
--- The supply chain action plan will kick in 2015.
IMPORTANT FOR TPP, RCEP TO "POTENTIALLY CONVERGE"
Bollard said it's important for the different regional architecture of economic cooperation like TPP and RCEP to " potentially converge."
"If they diverge, that is a problem. We would not want to see part of the big economies in the Pacific in one direction and part of the other ones in another direction," he said.
APEC expects to be more specific in the upcoming years on what its Free Trade Area for the Asia Pacific (FTAAP) vision means and how the existing regional architecture may serve as stepping stones. In 2015 there should be a clearer picture on the direction of TPP and RCEP, he said.
APEC leaders announced in 2010 that it was time to turn APEC's long-term goal of a free trade area of the Asia Pacific into a concrete vision. They noted that the FTA should be pursued as a comprehensive free trade agreement by building on existing regional architecture.
Bollard said there should be no change to the largely voluntary nature of the APEC approach, as it has been "an incubator of new ideas." The performance of the economies, though, will be public as monitoring is strengthened.
Bollard said APEC has been successful despite being a diverse grouping because they have a common ideal of making people in the region better-off with growing economic interdependence, but at the same time, its members have been "very flexible in the goals and means for the goals to be achieved."
Not everything is signed up to by all members, with only the programs that have been tried with the best results ending up APEC- wide.
The huge success of growth in the Asia Pacific is another factor that has helped keep the organization together. It keeps people's interest and focus together, he said.
APEC stays relevant by responding to changes in the region, too.
Bollard said he saw the growing middle class population as an important change in the region. People are looking for different goods and services and the governments are driving different trade. "We will probably see demand for more people mobility and less expectation for the U.S. consumers," he said.
The population want not only more income and better standards of living, leading to the need to balanced growth and sustainability. APEC leaders said in 2010 they wanted to pursue balanced, inclusive, sustainable, innovative and secure growth.
"It's not just real fast growth that is going to work in the future," Bollard said. "The growth is really important, but they don't like the extra environmental issues. They want growth with equity."
Bollard, a former governor of New Zealand's central bank for about 10 years, said he also saw an increasingly interconnected Asia Pacific, which led to the need for more cooperation in finance.
"Very quickly you can send very bad economic signals through banking systems, as well as good economic signals," he said.