It’s a real pleasure to be able to talk to you today, during this historically important series of meetings in Auckland. I want to associate myself with the New Zealand Prime Minister, Jenny Shipley, and her comments of support for APEC and your participation.
I’m pleased because I’m a New Zealander who attended the first APEC ministers’ meeting in Canberra 10 years ago. One of the reasons why that meeting was important was because it broke new ground which allowed China, Hong Kong China and Chinese Taipei to later sit around the same table. Ten years later their participation in APEC has become routine. What was headline making and radical a decade ago is routine today and we very much hope this will smooth the way for China joining us at the WTO family table.
Ten years on, APEC has undergone a remarkable development, deepening and broadening of its agenda and membership.
There are now 21 members of APEC, and APEC’s achievements in the past decade have far exceeded the expectations that we held for it in the beginning. However, more recently, our region has gone through the greatest economic reversal in 50 years.
The Asian crisis was real, is real, as is the recovery.
There are those who make a living out of predicting gloom, some even seemed to enjoy it, suggesting this was the end. Remember the headlines? But it did not signify an end to multilateralism and openness, nor did it prove that the system failed. It proved the opposite; it proved how resilient the system is. South Korea, Thailand and the Philippines, among others, not only kept their markets open, they introduced further liberalization measures.
One of APEC’s great contributions has been in establishing the climate for openness, and in the main, leaders and governments stood firm, learnt the lessons and started rebuilding. They resisted the pressures to revert to protectionism. We know those policies prolonged and made the Great Depression so much deeper, and from this the twin tyrannies of fascism and Marxism arose.
Mrs. Shipley and I talked before I left New Zealand about whether APEC was an economic, political or moral issue. I think it’s all those things. It’s not complicated. It’s about getting more customers. It’s about whether or not we run the world based on the civilised order of rules, or force. Whether we settle our differences by process, or force, persuasion or coercion. Of course it’s imperfect and it can be improved.
All of that can be said about the WTO, too.
Some suggest that APEC and regionalism are in contradiction to the WTO and multilateralism. One trade expert once said that regional arrangements were like street gangs, not nice, but if you live in the neighbourhood you had better join up.
I don’t agree. Open regionalism can give impetus to the best option, multilateralism. It gives smaller countries the opportunity to learn the political, economic and business skills necessary to engage further.
However, it does sometimes reflect the lack of satisfaction with the progress of the multilateral system.
History has shown us that open societies do better. That’s true. Our region testifies to this general principle.
Thirty years ago 70 per cent of Indonesians lived in what the World Bank called extreme poverty. Now, despite the recent problems, the figure is 10 per cent.
Look and admire at what Japan has delivered to its people from the rubble and ruin of the 1940s. Now it’s the second most powerful economy in the world, and a constructive force for good in the world.
A large number of APEC projects are gradually having their impact. One is the removal of red tape and other obstacles to trade, in an exercise that our experts like to call "trade facilitation". You out there in APEC are many steps ahead of us here in the World Trade Organization where "trade facilitation" is still a new discussion topic.
It’s an important exercise. The APEC Economic Committee estimated a couple of years ago that trade facilitation could save 45 billion dollars, more than the gains expected from APEC’s trade liberalization.
APEC and other regional organizations are extremely helpful to the WTO. Many ideas which eventually reach the WTO have been developed in regional groups. The debates that these ideas arouse in the groups are rehearsals for the discussions in the WTO. And this year’s agenda in Auckland deliberately focuses on important WTO work ahead.
That’s an important point that I’d like to emphasize today. I’d also like to turn it into a kind of challenge — a challenge to you, the chief executives and leaders of Asia-Pacific businesses.