APEC agrees to cut business costs

South Korea's President Kim Dae-jung, left, with U.S. President George W. Bush and Japanese Prime Minister Junichiro Koizumi at the APEC summit

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LOS CABOS, Mexico -- APEC leaders have endorsed a plan to cut transaction costs by 5 percent by 2007, offering a potential boost to trade flows of up to $280 billion.

The 21 member nations of the Asia Pacific Economic Cooperation forum meeting in Mexico on Sunday agreed to speed up trade facilitation measures and slash red tape in a bid to boost economic growth.

Australian Prime Minister John Howard told reporters after the meeting that there was a "strong commitment" to the goals set at the December 1994 APEC meeting in Bogor, Indonesia, where members agreed to reduce barriers to trade and investments.

Howard said he came away from the meeting "feeling that people collectively remained committed."

He also said there was "very strong support" for a successful Doha round -- a reference to the next round of multilateral tariff reductions under the auspices of the World Trade Organization.

Sydney meeting

Australia will host an informal meeting of trade ministers from up to 25 countries to discuss the Doha round in Sydney on November 14-15.

Sunday's decision by the APEC leaders follows a new World Bank study which estimated that upgrading ports, cutting red tape and adopting common customs rules could boost trade among APEC by $280 billion.

The trade facilitation plan calls on APEC members to identify "concrete actions and measures they intend to implement in 2003 and beyond to cut transactions costs."

The APEC declaration calls for common standards to be put in place by 2005 "whenever possible".

APEC estimates that achieving the goal of reducing costs 5 percent over the next five years would boost economic growth among the 21 economies by 1 percentage point.

The APEC declaration also spoke of the need to speed up efforts to deny terror groups access to international financial institutions.

The World Bank report said modest investments in capacity building projects and port logistics mean large APEC exporters such as the United States, Japan and South Korea would see the greatest increase in efficiency at $95 billion.

Standardized rules

The World Bank study found Russia, Hong Kong and Chile would see their exports to APEC partners grow by 44 percent, 34 percent and 22 percent respectively, on improved port logistics as well as standardized rules and the use of e-business.

APEC leaders also expressed their commitment to boost the security of trade.

That initiative aims to strengthen customs and immigration enforcement without slowing the movement of goods and people.

Trade security measures include enhanced air cargo security and quick implementation of a container security regime to help identify and examine high-risk containers and provide advance electronic information, including location, as early as possible in the supply chain.

APEC members also aim to develop ship and port security plans by July 2004 and install automatic identification systems on certain ships by December 2004.

Russia said technical issues might force it to extend the timeframe to December 2006.

The APEC leaders also agreed to adopt by 2005 common standards for electronic customs reporting that provide for standardized customs data to target high-risk goods and containers and to facilitate trade.

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