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Business Asia, May, 2002

Q: APEC ventured outside of its traditional economic focus last year in Shanghai as leaders sought to address the events of 11 September. Do you now expect the APEC vision to broaden to issues outside of trade and investment? Or should the organisation's focus be kept solely on trade?

The focus of APEC is trade and investment. Or, to put it another way, how to make people's lives better by putting in place good policies and sound institutions. APEC leaders in Shanghai naturally wanted to send a powerful signal of unity against terrorism. That was consistent with the broader shared purpose that APEC represents. It is part of the same bigger picture that tells us that growing economic interdependence, with all the benefits that brings, also increases the importance of cooperation to strengthen domestic and regional policies and institutions.

Q: At Shanghai, APEC members reiterated their commitment to meeting the Bogor Goals. How important is it to meet the Bogor Goals?

The Bogor goals are a commitment by APEC members, individually and collectively, to deliver the reforms needed to improve the well being of peoples across the Asia-Pacific region. So the goals are important. They are as much a contract between each member government and its own people as they are a joint undertaking. The evidence is clear that open economies grow faster, are more resilient to external shocks and deliver real welfare improvements.

Q: The Shanghai Accord advocated the use of "pathfinder initiatives", where economies which were ready to move forward with trade initiatives could do so and pave the way for others to follow. Given that one of the key criticisms of APEC in the past has been the slow pace of reform due to its consensus framework, will initiatives such as these speed the trade liberalisation process? Is there any area where Australia could lead as a "pathfinder"?

No economy need ever await APEC consensus to implement liberalisation or economic reform. Australia's reforms over the past two decades have made it an internationally competitive exporter and a world-class place to invest. Hard decisions have delivered an improved business environment and unprecedented record of growth. But there is a role for APEC to be more ambitious in encouraging economies that want to choose more rapid implementation of the reforms implied by their Bogor commitments. APEC has some good runs on the board, especially in the practical area of trade facilitation. I hope the new "Pathfinder" tool stimulates APEC and helps deliver results within fixed timeframes. Australia is developing "Pathfinder" proposals in areas such as corporate governance, e-commerce, customs, intellectual property rights and business mobility.

Q: There seems to be a growing trend towards bilateral agreements between nations. Australia itself is pursuing more bilateral agreements with key economic partners. Is the role of APEC diminished in the face of these agreements?

It does not matter how APEC economies deliver on the Bogor goals. The history of unilateral, bilateral, regional and multilateral trade and investment liberalisation initiatives is that they "leap frog" each other. They are not mutually exclusive. Much of the opening up in the region over the past two decades has been unilateral. At the end of the day, all that matters is that economies take the hard decisions. It would be nonsense for APEC to claim a monopoly. But it will continue to play an important role, including by strengthening the capacity of members, to build the policy and institutional frameworks needed for reform.

Q: What in your view are the main challenges APEC will face in its second decade? What can APEC do to remain relevant? What has its main achievement been so far?

APEC cooperation to deepen economic integration will always be relevant. APEC was formed at a time when economies in the region began to realise that the greater the level of economic integration between economies, the greater the benefit of creating a more certain and open environment for trade and investment -- and the greater the potential damage of policy decisions taken without awareness of their regional implications. This has not changed. The challenge is to improve implementation and to intensify work in areas such as competition policy, regulatory reform and economic and corporate governance. APEC can provide a reference point for economic opening and reform in these areas as it has in the past. It has set ambitious goals, played a key role in supporting WTO outcomes, delivered worthwhile trade facilitation results especially on customs and standards, and has helped developing member economies build their capacity, including through technical assistance, to implement and enjoy the benefits of liberalisation.

Q: In a speech you made to the APEC CEO Summit in Shanghai last year, you stated that the input of business was crucial for governments. What role can business play, particularly APEC's business arm ABAC, in growing the APEC economies?