Stephen Jacobi, Executive Director of NZIBF, traveled to San Francisco for APEC Leaders’ week and writes his thoughts on the outcome.
Remarks by Rachel Taulelei to Hugo Group, Wellington, 3 August
APEC BUSINESS ADVISORY COUNCIL
ADDRESS TO THE HUGO GROUP WELLINGTON, 3 AUGUST 2021
RACHEL TAULELEI, ABAC CHAIR 2021
Thank you very much for the opportunity to join you today and talk about our work this year.
For the uninitiated, we are a group of 63 Members, three from each of APEC’s 21 economies, who are appointed by our respective Leaders.
I am pleased to serve alongside Malcolm Johns from Christchurch Airport and Anna Curzon from Xero. In my day job I am the CEO of the Wakatū-based food and beverage exporter, Kono.
If there ever was a time for more korero about the challenges facing the APEC region, it is surely now when the continuing challenge of the pandemic and its fall-out requires a coordinated response across all the region’s economies.
When it comes to finding those solutions, ABAC ensures that the voice of business is heard.
ABAC provides a mechanism for the private sector to provide advice and recommendations to Ministers and senior officials and directly to Leaders themselves when we sit down with them during Leaders’ Week in November.
To do this requires a significant effort and all the more so in a “virtual” year when our usual pattern of four physical meetings has to be replaced by a series of regular, sometimes daily, video link ups – over 60 of them in fact to date.
So it not always a straightforward process: to use an Olympic analogy, I’m not sure what sport I might be in – it could be the wrestling, the hurdles or the marathon.
Suffice to say, with over three months to go before we deliver our final Report to Leaders we still have a few hills to climb, starting with our third plenary meeting which takes place later today.
I’d like to spend the time I have with you this morning talking about what we as business are seeing across the five pillars of our work programme this year.
Our theme this year is designed to put all our work in a coherent framework – “People, Place and Prosperity or Tāngata, Taiao me te Taurikura”.
Especially at this challenging time, when the need for enhanced vaccination efforts is acute, we need to put people (ngā tāngata) at the centre of everything we do.
We need to do so in a way we respects and preserves the environment (te taiao) in which we live.
And we have to continue to have regard for continuing to advance economic well-being (te taurikura) in a way that is both inclusive and sustainable.
So to the five pillars:
- Regional economic integration
- Digital; and
Regional Economic Integration
Integration is at the heart of APEC’s core mandate, which, in the words of the Putrajaya Vision adopted last year, “is to create an open, dynamic, resilient and peaceful Asia-Pacific community by 2040”.
A key deliverable for New Zealand in the APEC Chair this year is to develop an Implementation Plan to achieve the vision.
Trade and investment have a key role to play in achieving the vision.
Our ABAC submissions have emphasised the need to create a seamless environment where it is as easy to do business in one part of the APEC region as another.
That means paying attention to eliminating tariff and non-tariff barriers for both goods and services, to making behind-the-border regulatory frameworks more coherent and to facilitating more cross-border investment.
APEC is a voluntary and non-binding organisation – both its greatest strength and possibly also its greatest weakness: it can lead economies to be bolder in their approach, but it can also lead them to drop the ball when it comes to the most sensitive issues.
ABAC has promoted – since 2004 in fact as some good ideas take time (and I fear I have never been described as a patient person so this has taken some time to get used to) – the concept of the Free Trade Area of the Asia Pacific (FTAAP) as an organising principle to achieve greater integration.
While some economies have drifted away from this idea, ABAC has certainly not given up and our advocacy saw FTAAP retained in the Putrajaya Vision.
How to deliver FTAAP especially in the current geo-political environment is not so clear, but ABAC has consistently championed the expansion of the so-called negotiating pathways – CPTPP and RCEP – and their eventual convergence as the best way to achieve FTAAP.
Prominent too in this vision is the future of the World Trade Organisation (WTO), the parlous state of which is a serious cause for concern.
This year, as last year, ABAC has released a detailed Statement of Support for the WTO as the ultimate maker, keeper and upholder of the rules governing international trade.
The WTO faces a key test of its mettle later this year when Trade Ministers gather in Geneva for the Twelfth Ministerial Conference.
ABAC will making further representations to that meeting about the pressing need for an outcome that secures relevance of the organisation and especially its liberalisation and dispute settlement functions.
The pandemic and its continuing long tail have cast a shadow over the pace of integration in the region.
Trade has a key role to play in the pandemic response and we have urged APEC to lead a sectoral initiative to eliminate tariffs and other barriers to trade in vaccines and the other goods and services needed to combat the virus.
ABAC has spent a lot of time this year talking about the conditions under which borders might eventually be opened safely and seamlessly – every time we seem to get close, another wave appears to hit.
While safeguarding the health of our communities has to be of key concern right now, it is not too early to start thinking about how we might return to a more normal situation when it is appropriate to do so.
Some of the considerations involve the availability of vaccines especially in APEC’s developing economies, the pace of vaccination, the need for verifiable and mutually- recognisable documentation that might permit a resumption of travel and the processes at the border, particularly for different levels of risk.
There is still a lot of work to do but ABAC has some concrete ideas to propose.
It has been said that the pandemic is just a curtain raiser for the wider challenge facing the world in the form of rapidly increasing and dangerous climate change.
Climate change and sustainability issues more generally have often proved challenging in APEC, but this year ABAC, under the leadership of Malcolm Johns, has focused on the principles that might guide business in its response to climate change.
We have benefited greatly from the work of the Climate Leaders’ Coalition in New Zealand and have proposed a set of principles focused on reduction and decoupling from fossil fuels, adaptation of both behavior and technologies and achieving ‘just transitions’, which are fair, equitable and inclusive.
We have also focused on the need to foster trade and investment in renewable energy through the adoption of a new framework to address trade barriers and facilitate cross-border co-operation.
Freer trade in environmental goods and services and a multilateral approach to climate-related trade policy are also part of the mix.
Food security has been a long-standing concern in APEC – New Zealand’s last year of hosting in 1999 adopted the concept of an APEC Food System which sought to match food demand and supply as a means to solve the region’s food nutrition needs.
Today that food system needs to both trade-friendly and digitally-enhanced and be more inclusive and sustainable.
This year New Zealand is leading the adoption of a new Food Security Roadmap to 2030 and ABAC is working hard to ensure that the private sector is fully part of that effort.
The inclusion pillar of our work programme speaks directly to the People/Tāngata theme.
We want to ensure that the needs of groups which have not benefited as much as others from economic growth and development in APEC are addressed.
We are thinking here particularly of micro, small and medium sized enterprises, women and Indigenous people amongst other groups.
ABAC’s traditional focus on MSMEs has been continued this year as we look for practical ways to ensure MSME resilience – one of these involves timely payment of invoices by governments and larger businesses.
Women have been impacted disproportionately at every level by the pandemic and there is an urgent need to enable women to participate more fully in trade and especially the digital economy.
For New Zealand this year the inclusion of Indigenous people has been a major focus.
This is a new topic in APEC but one of direct relevance to the region’s 270 million Indigenous people who to date have fallen off the radar.
In July ABAC hosted the first ever Indigenous Business Leaders’ Dialogue – we were joined for a stimulating discussion by over 90 Indigenous business leaders from eight economies.
The meeting adopted a Statement of Priorities which focused on the needs of Indigenous people in the areas of connectivity, infrastructure and data.
That Statement is an important means to elevate Indigenous concerns in APEC and while pursuing the agenda is not without its challenges, we hope to develop this work programme further in coming years.
I’ve already mentioned digital several times – that simply reflects the way digital impacts on every part of our economies today.
Earlier this year ABAC Canada hosted a well-attended Digital Symposium that helped scope these issues.
We’ve tackled the digital pillar in three ways:
- First, in a work stream led by Anna Curzon, to identify ways to make digital uptake and best-practice support programmes more readily available through a one-stop APEC portal
- Second, to work towards greater interoperability for systems for digital trade – all trade is now digital as technology assists the smoother passage of goods through supply chains, enables suppliers to connect directly to customers and assures them of the quality, sustainability and provenance of their products: e-documents, e-invoicing, e-payments and the privacy and security systems that surround them are all top-of-mind issues
- Third, developing a more conducive environment for the adoption of new technologies like AI and digital health.
Our last pillar is focused on the short term and long term.
As we gradually get on top of the global health crisis – although as we meet today that seems further off than ever – there is an obvious need to rebuild the economy.
Co-ordinated approaches to stimulus, business and income support and the need to learn from our experience are all key both to the recovery and living with Covid in the future.
Longer term attention must be paid to the continuing structural reform of our economies to build resilience to future shocks.
There is a temptation to put off structural reform in the bad times and to think it is not required in the good times.
Today’s risks will become tomorrow’s problems if they are not acted upon and ABAC has a substantial body of work directed at the future capacity and sustainability of the region’s economy and financial system.
Where to from here?
I realise I have taken you at a gallop through what is a substantive work programme – you can find out more on our website www.tradeworks.org.nz.
We will start to bring all this together when ABAC meets in plenary session this very afternoon.
It’s an ABAC action-packed day folks. I think one of my colleagues referred to it as Super Tuesday.
The Prime Minister will be with us to open our meeting and engage in discussion with our Members.
We’ll hear updates on the economic situation in APEC, on the status of the Implementation Plan for the Putrajaya Vision and on planning for APEC’s CEO Summit in November.
Most of our meeting will be taken up with discussing and approving a raft of documents, reports and letters to Ministers as well as considering our draft Report to Leaders.
I wondered earlier whether wrestling might be my sport, if not of choice, then of circumstance, and there will doubtless be wrestling of words and will as we finalise these important documents.
To a certain extent that’s inevitable across such a diverse membership, but our task as Chair is to find the points of consensus while giving a strong lead. And with the support of an amazing team, I feel proud of the efforts we have made in this vein this year.
Between now and November we have several points of engagement with Ministers for Food Security, Women, SMEs and Finance, building on earlier dialogues with Trade, Finance and Structural Reform Ministers.
When we get to the Dialogue with Leaders, we will hopefully be speaking “business truth to power” with some of the world’s largest economies and a range of important trade and economic partners for New Zealand.
We take a turn at chairing APEC every twenty years or so.
It’s our turn to be in the driving seat and to offer our unique perspective and kaupapa to the rest of our region.
Whether at the level of government or business, that’s a big responsibility and a big opportunity.
The future of our people, place and prosperity depends on getting it right.
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