RESTRICTED
WORLD TRADE WT/WGTI/W/9
6October 1997
ORGANIZATION(97-4202)
Original: English Working Group ontheRelationship
between Trade andInvestment
COMMUNICATION FROM APEC
Reproduced herewith isapaper received fromtheAPEC Investment Experts Group onAPEC 's
approach totheliberalization oftradeandinvestment withtherequest thatitbecirculated toMembers.
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APEC andtheWTO share acommon commitment totheliberalization oftradeandinvestment.
APECMinistersinchargeofTrade,whometinMontrealinMay1997,clearlyunderscoredthiscommon
commitment when theyinstructed theirofficials toensure APEC 'swork oninvestment issupportive
ofthework oftheWTO Working Group ontheRelationship between Trade andInvestment.
APEC approach toinvestment
APEC economies recognize thatforeign direct investment intheAsia-Pacific region hasbeen
oneofthemostimportant factors contributing tothestrong economic growth thathascharacterized
theregion overthepastfewyears. APEC hasundertaken abroad commitment tothisend:
"APEC economies willachieve freeandopeninvestment intheAsia-Pacific region
by:
a. liberalizingtheirrespectiveinvestmentregimesandtheoverallAPECinvestment
environment by,interalia,progressively providing forMFN treatment and
national treatment andensuring transparency; and
b. facilitating investment activities through, interalia,technical assistance and
cooperation."1
APEC hasorganized anddesigned itsactivities torealize thiscommitment. Thefocal point
within APEC oninvestment issues istheInvestment Experts Group (IEG). However, many sectoral
committees alsotarget investment-related challenges andopportunities.
1. Liberalization andfacilitation
Member economies recognize theimportance ofremoving barriers toinvestment. Member
economies havespelled outspecific stepsthattheyintend totakeinthisregard intheirIndividual Action
Plans(IAPs)andCollectiveActionPlans(CAPs).Theseplansincludevoluntary,unilateralcommitments
1Extract from theOsaka Action AgendaWT/WGTI/W/9
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tobetaken inpursuit ofafreeandopeninvestment environment andsome IAPsinclude commitments
toinvestment rule-making atthebilateral, regional, andmultilateral level. These plans areshared
among members andareupdated regularly.2Attheupcoming meeting ofTrade andForeign Ministers
andAPEC Economic Leaders (Vancouver, December 1997), members willdiscuss implementation
andimprovement oftheiraction plans.
APEC Economic Leaders in1994approved asetofnon-binding investment principles (NBIPs)
forAPEC. TheNBIPs underline certain important concepts which identify theaspirations ofmember
economies inpursuit offreeandopeninvestment intheregion.
2. Transparency
Although itdoesnotpursue rule-making perse,agood partofAPEC 'sinvestment-related
activities havefocused onotherrelated priority objectives, including increased transparency withrespect
toinvestment policy measures intheregion.
TheIEGhasfurthered theobjective relating totransparency through thedevelopment ofa
guidebook ontheinvestment regimes ofAPEC member economies. Thispublication (nowinitsThird
Edition) reviews sixmajor topics foreachmember economy:
- background ontheforeign investment regime;
- regulatory framework andinvestment facilitation;
- investment protection;
- investment promotion andincentives;
- summary ofinternational investment agreements orcodes towhich theAPEC member
isaparty; and
- assessment ofrecent trends inforeign investment.
Thispublication isreadily accessible toeconomies andbusinesses, including through theInternet.
3. Policy dialogue
Discussion ofinvestment policy hasbecome animportant partofthework oftheIEG. The
increased understanding thatflows from suchanexchange willbeimportant asmembers seekto
implement APEC 'sobjective. Policy dialogue intheIEGwillbeenhanced through thefollowing:
- introduction ofregular policy discussion oninvestment issues, including discussion
ofindividual economies investment regimes; and
- establishment ofapolicy dialogue withtheOECD andotherinternational forainvolved
inglobal andregional investment issues.
2Individual Action Plans andCollective Action Plans were developed inthecontext oftheManila Action
PlanforAPEC (1996) which wasadopted attheSubic BayLeaders meeting in1996. These maybeobtained
through theAPEC secretariat website at:http://www.apecsec.org.sg.WT/WGTI/W/9
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4. Business sector dialogue
Oneofthehallmarks ofAPEC 'swork withrespect totradeandinvestment hasbeenthedegree
ofcooperation withthebusiness sector. In1995, APEC Leaders established apermanent body, the
APEC Business Advisory Council (ABAC), tobethechannel forprivate-sector ideas onkeyareas
forattention andcooperation among member economies. TheCouncil plays animportant rolein
identifying impediments togrowth andpractical means toachieving increased access andenhanced
opportunities totheglobal marketplace. Itproduces advice intheformofanannual report toEconomic
Leaders, anditsmembers participate inadialogue withtheEconomic Leaders astheyplanforsenior
official andministerial meetings.
Theclose relationship between theIEGanditsprivate-sector constituents continues through
thefollowing activities:
- consideration oftherecommendations oninvestment intheABAC Report tothe
Economic Leaders andfrom theAPEC Business Symposiums;
- organization ofThird APEC Investment Symposium inHong Kong, China in
October 1997;
- identification ofmechanisms forperiodic discussions withbusiness representatives in
individual member economies; and
- identification ofthemerits ofasecond business survey and,incooperation withPECC
andPBEC, definition ofspecific options forthesurvey framework.
5. Technical cooperation
APEC members haverecognized thattechnical cooperation isoneofthewaysinwhich APEC 's
individual andcollective goals willberealized. Inthisregard, theIEGhasplanned anumber ofactivities
including thefollowing:
- theconduct ofaseminar onimplementation oftheUruguay Round TRIMs Agreement,
inconjunction withtheAPEC Business Symposium tobeheldinHong Kong, China
inOctober 1997;
- development oftraining programmes forinvestment officials;
- identificationofpossibleareasforimprovedpracticeandpracticalfacilitationinitiatives;
- identification oftarget areas fortechnical cooperation including bestpractice
policy/administrative frameworks; and
- coordination oftechnical cooperation efforts oninvestment withother relevant bodies
involved intechnical cooperation.
6. Economic research andsectoral analytical capacity
Strengthening anunderstanding ofinvestment flows andtheirdeterminants isrecognized among
APEC economies asintegral tosound policy decision-making inanumber ofeconomic sectors. TheWT/WGTI/W/9
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APEC Economic Committee andanumber ofsectoral APEC Working Groups include investment as
animportant element oftheirwork asillustrated below.
(i) TheEconomic Committee isundertaking anumber ofinvestment-related activities:
- completion ofstudy ontheimpact ofinvestment rule-making andliberalization
onAPECeconomiesandinclusionoftheresultsinthe1997EconomicOutlook;
- facilitation ofinfrastructure development through such activities asan
Infrastructure Workshop tobeheldinLosCabos, Mexico inJune1997,
establishment ofInfrastructure Development Information Network, and
cooperation among export credit agencies (ECAs);
- update ofadatabase onbilateral FDIflows amongst APEC members and
integration withdataontrade flows.
(ii) Finance Ministers arepursuing acomprehensive programme ofwork including:
- development ofconcrete andpractical measures forinclusion inavoluntary
action planforsupporting thefreerandstable flows ofcapital;
- promotion ofenhanced cooperation among export financing institutions inthe
region;
- assessment oftheadequacy oftraining programmes forbanksupervisors and
securities regulators intheregion anddevelopment ofastrategy formeeting
unmet needs;
- arrangements toshare experiences andprovide technical support for
strengthening clearing andsettlement systems;
- collaborative initiatives toimprove ratings procedures fordeveloping capital
markets andforthecollection anddissemination offinancial datatoimprove
market transparency;
- reportonalternativeapproachestopensionfundreform,includingissuesrelated
totheroleoftheprivate sector inpension fundmanagement, fundinvestments
ininternational markets andtheprudential regulation ofprudential fund
investments;
- forum todiscuss theroleofsecuritization incapital market development,
including regulatory mechanisms needed topromote itsgrowth;
- review thereport oftheWorking Party onFinancial Stability inEmerging
Market Economies withaviewtofacilitating theirimplementation within the
region;
- contributiontothedocumentationofbestpracticesintheregionontheprovision
ofprivate infrastructure.WT/WGTI/W/9
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(iii) Telecommunications Working Group:
- theconduct ofastudy toidentify theproper environment forthepromotion
ofprivate-sector investment intelecommunications;
- theconduct ofaSeminar onPromoting Business/Private-Sector Participation
inTelecommunications Infrastructure Development, Tokyo, Japan,
24-25 July1997.
(iv) Energy Working Group:
- implementation ofawork programme aimed atfacilitating increased
private-sector investment inpower infrastructure through aseries ofpractical,
cooperative actions.
(v) Human Resources Development Working Group:
- completion ofatraining programme forindividuals working intheinstitutions
which provide trade andinvestment insurance inAPEC economies.
(vi) Marine Resources Conservation Working Group:
- thedevelopment ofaninventory ofAPEC ocean industries toassist relevant
businesses toestablish partnerships andexpand markets.
(vii) Fisheries Working Group:
- theconduct ofastudy ofbarriers toinvestment inthefisheries sector.
(viii) Trade andInvestment DataReview Working Group:
- theconduct ofwork ontheTrade andInvestment Database System, which will
include dataoninternational merchandise trade, services tradeandinvestment;
- consideration oftheadoption ofinternational standards fortrade inservices
andinternational investment data, suchasdeveloped bytheIMF.
(ix) AdHocPolicy Level Group onSmall andMedium Enterprises:
- theconductofaworkshoponimprovingcapitalmarketsforinternationalSMEs.
APEC/WTO collaboration
APEC members havecommitted intheirCollective Action PlanonInvestment toengage in
dialogue withinternational organizations involved withinvestment. AstheWTO begins itsinvestigation
oftherelationship between trade andinvestment, APEC stands ready toshare itsexperience inthis
area.WT/WGTI/W/9
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Further information forWTO delegations3:
(a) acopyoftheGuide totheInvestment Regimes oftheAPEC Member Economies (1996)
compiled bytheAPEC Investment Expert Group;
(b) excerpts from theAPEC Member Economies '1996 Individual Action Plans related
toinvestment;
(c) acopyofForeign Direct Investment andAPEC Economic Integration ,astudy published
bytheAPEC Economic Committee.
3These maybeobtained through theAPEC secretariat website at:http://www.apecsec.org.sg.