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. Last Updated: 07/27/2016

APEC Eyes Billions in Transport Savings

APKasyanov, Singapore Trade Minister George Yeo, Taiwan Academia Sinica head Lee Yuan-tseh and U.S. President George W. Bush
LOS CABOS, Mexico -- With an eye toward boosting growth and generating hundreds of billions of dollars of additional trade, Pacific Rim leaders Sunday endorsed a plan to cut transaction costs 5 percent by 2007.

The action by the 21 leaders of the Asia-Pacific Economic Cooperation follows a new World Bank study that 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."

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 World Bank study found Russia, Hong Kong and Chile would see exports to APEC partners grow 44 percent, 34 percent and 22 percent, respectively, on improved logistics as well as standardized rules and electronic business.

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.

"Increasing trade efficiency ... will cut the cost of doing business by removing administrative impediments to trade in areas such as customs, standards and business mobility," Canadian Trade Minister Pierre Pettigrew said last week.

APEC leaders accompanied their cost-cutting plan with a 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 included:

Enhanced air cargo security.

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.

Development of ship and port security plans by July 2004 and installation of automatic identification systems on certain ships by December 2004. Russia said technical issues might force it to extend the timeframe to December 2006.

Adoption by 2005 of common standards for electronic customs reporting that provide for standardized customs data to target high-risk goods and containers and to facilitate trade.

The forum was dominated by discussions of terrorism, underlined by the absence of President Vladimir Putin, who remained in Moscow to deal with the hostage crisis. Prime Minister Mikhail Kasyanov attend the APEC summit in Putin's place.

Pacific Rim leaders Sunday also urged the development of regional bond markets to promote growth.

"We agreed to promote more openness, diversity and competitiveness in our financial markets, including through the development of regional bond markets," APEC leaders said in a statement.

APEC finance ministers will submit a report on the issue to APEC leaders at next year's summit in Thailand.

Philippine Finance Secretary Jose Camacho earlier this month said APEC countries were considering investing $6 billion to establish a market for trading Asian bonds.

Each member would contribute a small percentage of its dollar reserves to invest in government and corporate bonds listed on the market, he said. "The thinking is if the governments were to support this market with a very small allocation of international reserves, you can have a start of a very formidable market," he said.

(Reuters, MT)