Australia and Latin America in the Asia Pacific
Presentation by Mr Claudio de la Puente, Ambassador of Peru in Australia, at the Forum
organised by the University of Sydney, 15 March 2007.
Let me start by thanking the University of Sydney, in particular to Professor Gavin Brown, Vice Chancellor and principal, and Professor John Hearn, Deputy Vice Chancellor, for hosting this International Forum. I would also like to thank DFAT Assistant Secretary, Les Luck and COALAR President, Bernard Wheelahan for joining us in promoting a better understanding on the Latin American/Australian relations in the Asia Pacific region.
I have been asked to talk about Peru and APEC. As you all may know, Peru will host APEC meetings right after Australia in 2008.
I intend to share with you what our experience in APEC has meant to Peru, the beginnings of our approach to the Asia/Pacific and how Peru is preparing to conduct the Forum and host the multiple annual meetings. I will also refer to the priorities drawn up by Peru for 2008.
I will start by saying that Peruís presence in APEC is part of an increasing engagement between Latin America and the Asia/Pacific region. Far from being mere witnesses of a distant process, Latin American APEC members, and those who are not part of the forum, are contributing assets to the denser weave of economic and commercial relations with the Asia Pacific, and they have made significant contributions to the process of interregional cooperation.
Latin America and APEC: Some historical background
The Pacific Ocean, great scenario of convergences, has had an special significance for Latin America, from an age that dates back to Colonial and even pre-Columbian times.
This was reflected in the recent celebration of the 400 anniversary of the pioneering explorations of Torres and Quiros that started off from the Peruvian port of El Callao. Together with other explorations launched from Mexico, they helped somehow to place the South Pacific in the world map and to coin the first expressions that gave origin to the name of Australia. No to mention that long before these extraordinary adventures, one Peruvian Inca would have reached Polynesia, according to what some historians suggest.
What I want to stress, in sum, is that our interests in the Pacific can be traced a long time ago, and todayís efforts to foster relations with the Asia/Pacific, ground their roots in remote historical precedents.
Latin American Contribution to Asia/Pacific and APEC
Mexico, Chile and Peru, with a combined GDP of over one thousand billion dollars and nearly 150 million consumers market, have played an important and proactive role in APEC. Mexico held the Presidency of APEC in 2002. Under the motto of "Expanding the Benefits of Cooperation, Economic Growth and Development", the Mexican Summit reached substantial commitments to implement a number of initiatives in trade and investment liberalization and facilitation, counter-terrorism and economic growth. Later in Chile 2004, under the idea "One Community, Our Future", the Leaders approved the ďInitiative of Santiago for Expanded Trade in APECĒ and the "Compromise to fight Corruption and ensure Transparency".
Solid economic and commercial links with Asia have been developed, however, by many Latin American countries. Bilateral cooperation extends to areas as diverse as nuclear energy, environment, mining and education. According to COALAR reports, trade and investments between Australia and Latin America are growing steadily. But still more, we are already seeing some Latin American companies expanding their investments in third APEC economies, like giant Brazilian corporation CVRD in Australia, to mention only an example.
Peru and APEC
Peruís presence in APEC responds to high-priority foreign policy objectives seeking to promote and advance Peruvian interests in which is the most dynamic economic region in the world. This achievement has been the result of a patient work that followed a process of economic stabilization and structural reforms started in the 90ís, which has turn Peru into one of the most dynamic, fastest growing and stable economies in the Region.
Let s review some figures:
The initial steps of this approaching process date from 1990, when Peru enters the Pacific Basic Economic Council (PBEC). A year later, Peru joined the Pacific Economic Cooperation Council, PECC. Between 1992 and 1995 Peru enhanced its diplomatic presence in the region, with the opening of new Embassies and commercial offices in some Asian and South Pacific countries. In 1996, Peru joined the APEC Fisheries and Tourism working groups, and the following year the Peruvian candidacy was admitted at the Vancouver Leader Summit. Finally, Peru became full APEC member in Kuala Lumpur, Malaysia, in 1998.
Peru has gradually assumed new responsibilities in the forum. Thus, Peru co-chaired the ECOTECH Subcommittee in 2001, and later chaired the committee in 2002, 2003 and 2006. In 2001 Peru presided over the Competition and Deregulation Policies Working Group. This year, Peru will hold the Deputy Executive Direction as a previous step to the Presidency of the forum in 2008.
In addition, Peru has already organized and hosted a series of APEC events including Ministerial Meetings of Transports (2002) and Communications (2005), and a number of working group gatherings as we see in the slide.
What APEC means to Peru
Peru has diversified its foreign trade into four defined geographic areas. On one side, the United States, our largest commercial partner and main destination for Peruvian exports. The European Union is another important trade partner for Peru. One fourth of our exports are directed to the European market. Asia is also a very important and fast growing market for Peru, with Japan, China and Korea as main individual partners. Finally, intra-regional trade with Latin American countries has increased exponentially, boosted by the Free Trade Area agreed by the Andean and Mercosur countries, and our fast growing trade with Chile and Mexico.
Nevertheless, APEC economies as a whole constitute, by far, the area of greatest economic relevance for Peru. In fact, Peruvian exports to APEC economies have increased by 90% since 1996. Nine APEC economies are among the 20 main commercial partners of Peru. In 2005, direct investments from the APEC region summed up more than 26% of the total investments in Peru.
Since Peru joined the Forum, it has experienced a sustained growth in trade and investments. As we will see ahead, we have made significant progresses in negotiating and signing bilateral trade agreements. Our experience in APEC has opened new economic and technical cooperation and capacity building opportunities for Peru.
We pursue not only an increase in our trade and investments figures. We would rather see more and more added value exports, industrial development and technological innovation. We expect our APEC experience to help boosting the over 2 million Peruvian small businesses, improving their competitiveness and capacity to successfully connect with international markets.
In sum, APEC has been fundamental for Peru in the objective of widening and strengthening its relations with the Asia/Pacific Region, but also can serve as a driver to speeding up our economic growth and produce real social impact. It is, indeed, an important part of Peruís development strategy. It is clear where the priorities for Peru are.
Agenda for Peru APEC 2008
Much has been said on the challenges placed to the future of APEC by the arising of new regional fora, particularly in Asia. It is clear that the scenario where APEC was created is not the same today. Having this in mind, we need to work even harder and renew our commitment with APEC, so it continues being the preeminent forum for regional cooperation given its unique trans-Pacific condition.
Accordingly, Peru has identified for the APEC year 2008 the motto of "A New commitment for the Asia Pacific Development", which refers to the need of a shared and sustainable development in the whole region, bringing closer both rims of the Pacific basin. This endeavor demands new synergies between member economies, international financial institutions and private sector.
We should concentrate our energies in high-priority APEC subjects. Nevertheless, as it has been noted in the last ďPECCís State of the RegionĒ, growing inequality among APEC economies is posing a real threat to continued integration. So we should also give special attention to the social dimension of the APEC agenda.
Letís take a quick look on some of the issues that Peru intends to focus on in 2008:
APEC Reform We wish to see a even more sound APEC capable to give proper responses to the new challenging regional and international scenario. That requires the adoption of institutional reforms that must reflect the consensus of the members. And Peru will strongly support this reform process, as deep as required, so that we can meet our main goals of wide trade and investment liberalization, economic cooperation but also, to move on with political vision to make sure that security, in a wide sense, prevails and development extends all along the region.
Free trade and Regional integration Trade liberalization will continue being, with no doubt, a high-priority subject in APEC agenda, as it is a way to reach the Bogor Goals. Moving on the DOHA Development Agenda is crucial for everyone, in particular for developing economies.
Peru will continue supporting all the initiatives oriented towards the successful re-launching of the Multilateral trade talks, in consistency with the Special Declaration approved by the Leaders in Hanoi last year. This will require a great deal of decision and political will, especially form the largest economies. Agricultural Trade liberalization is also an issue of particular concern for Peru having joined, few weeks ago, the Cairns Group.
Peru as many other countries, is moving very fast to secure market access while a breakthrough in trade negotiations holds in a worrying standstill. So, we have advanced in signing trade agreements or are in the way to conclude them, with a number of the most important APEC economies. Among them, the ďearly harvestĒ agreement signed with Thailand in 2005, and the FTAs signed with United States and Chile in 2006. We are about to conclude negotiations with Singapore, in weeks time, and Mexico, where we have very few pending subjects.
Likewise, Peru expects to start formal negotiations with Canada before August, and we have agreed to conduct joint feasibility studies with China and Korea, aiming to start FTA negotiations later on this year. Finally, last December Peru proposed Australia to enter into negotiations for an FTA. We very much hope to move forward on this issue.
It is also to be noted that as the only Andean country in APEC, Peru holds an strategic location in the central Pacific Coast which favors its position as a regional gateway from the Andean Region and South America to the Asia-Pacific Region and vice versa.
Regional economic integration is another crucial area for APEC future. Nevertheless, the considerable amount of work required to harmonize the diversity of agreements in APEC raises a huge challenge. Up to date, they are 54 signed FTAs in the region, which is known as the "noodle or spaghetti Bowl", that creates certain degree of confusion in good practices, concessions and modalities of work.
To contribute to address this challenge, during 2007 and 2008 Peru will encourage the deepening of our discussions and studies on FTAs and RTAs, looking for convergences on the greater possible areas within existing APEC trade agreements, based on the denominated "model measures". We hoped to advance significantly this year so that these efforts produce tangible results in 2008.
Education and Economic and Technical Cooperation.- Developing economies require to strength their capacities for regional integration. That is why Peru will give high-priority attention to technical and economic cooperation, the third APEC pillar, and education, as a mean to lessen the gap between developing and developed economies within APEC. A meeting for APEC Ministers of Education is being considered by Peru and it could be included at the 2008 APEC agenda.
Business Facilitation Business facilitation is also crucial for the continuing growth in trade, and APEC has taken the lead among other fora in this subject. We expect the Second Plan on Trade Facilitation to be approved by APEC Trade Ministers next July, and advance in cutting-off an additional 5% in the associated costs of transaction between APEC economies. Peru will seek concrete advances in areas such as customs procedures and electronic commerce.
Anti Corruption and Transparency Corruption has become a main issue as much in APEC as at global level, since it damages the foundations of Democracy and Governmentís efficiency, and carries additional costs posing new obstacles to economic progress.
Peru, reaffirming its commitment to fight corruption, will organize and host the Second International Conference on Anticorruption and Measures of Transparency, to take place in Lima, in November of this year, prior to the formal beginning of the 2008 APEC year.
Getting prepared for APEC 2008
Letís finally move to what Peru is doing to prepare 2008 APEC activities. We have put in place a multi-sectorial management approach with the active participation of Central and Regional Governments. We plan to have the Leaders Summit in Lima, while most of the Ministerial and technical level meetings are to be hosted by other cities along the amazing and to diverse Peruvian territory. The Organizational structure comprises a National Commission at Ministerial level, a Vice Ministerial Committee together with two executive secretaries, for substance and agenda and for administrative, logistic and security duties. On top of all these instances we will have the Vice President of Peru, Luis Giampietri, as head of the whole task force having thus, the highest political support level to the process. We want also the private Sector and the civil society to be part of this process in a nationwide effort.
Peru has defined a tentative calendar of meetings, previous to the Summit to be celebrated in November. This program includes more than 76 meetings of technical, SOM and Ministerial level, including, Finance, Trade, Tourism, SME and Education.
We are very much profiting from the experience of APEC Australia 2007, attending the many meetings scheduled all along the year. Likewise, we just had one of the Australian task force top officials in Peru, sharing his knowledge and expertise with the Peruvian National Commission. Peru looks forward to continue its close collaboration with Australia so a smooth transit from one Presidency to another is assured together with the required continuity in APECís agenda.
To conclude, we are aware of the challenges of leading APEC next year in the midst of crucial times for our Forum, as well as organizing and hosting such important meetings. And we are confident to successfully address those challenges.
We look forward to seeing you in Peru 2008. In the meantime, letís get familiar with our APEC Logo. (see power point)
I Thank you all for your kind attention.