Date
20 September 2017
Philippines needs to show quick footwork in the coming 12 months after taking over the chairmanship of APEC. Photo: wikipedia.org
Philippines needs to show quick footwork in the coming 12 months after taking over the chairmanship of APEC. Photo: wikipedia.org

Manila has its work cut out as new APEC chair

As Laura del Rosario, the Philippines’ senior official responsible for APEC Chairmanship in 2015, laid plans for the year ahead, she chose Legazpi City in Albay as the perfect setting for their inaugural meeting – what we call the Informal Senior Officials Meeting (iSOM) in early December: with the perfect cone of Mt Mayon volcano towering over the city, the message was clear: emergency preparedness must be one of the year’s highest priority themes.

And the theme was put to the test more speedily than she might ever have imagined. Typhoon Hagupit barreled into and over the Visayas in the central Philippines and bore straight down on Legazpi City. With just three days to go to the meeting, Mayor Noel Rosal told Manila that he would be too busy coping with Hagupit to host senior APEC officials. At impossible short notice, we were all informed that the meeting had been moved to Manila.

To the huge credit of the Philippine government, the shift moved like clockwork. This was emergency preparedness at work – and with an average 20 typhoons a year in the Philippines, and at least 60 days of APEC meetings set across the country in 2015, this quick footwork might be required more than once in the coming 12 months.

After an effective and very productive year of Chinese APEC chairmanship, the Philippines has a hard act to follow. Some of the priorities for the year ahead have already effectively been set by developments in 2014: for example, work on a “collective strategic study” of how to form a Free Trade Area of the Asia Pacific (FTAAP); work on improving the region’s physical infrastructure; managing the challenges of urbanization; putting flesh on the “connectivity Framework” that links physical, institutional and person-to-person connectivity; and deepening and making more transparent the region’s financial markets; making the region’s services markets more open and efficient.

The most tantalizing – but most distant – of these inherited priorities is of course the FTAAP, a vision for comprehensive regional integration first tabled a decade ago by the region’s business leaders. In 2004, APEC leaders trashed the idea as unrealistic. Today it is being taken seriously. But the Chinese aspiration to finish the deal by 2025 may still be ambitious; the “collective strategic study” will not be done before the end of 2016 – and that just scopes the idea. Don’t hold your breath for evidence of rapid progress.

But many priorities will distinctively be the Philippines’ own: tackling regional inequalities and the rich-poor divides in each of our economies; strengthening education systems across the region; helping SMEs to build international competitiveness; making it easier for workers to move around the region.

It is noteworthy that after six or seven years during which APEC was being led by its developed economy members (Australia, the US, Singapore, Japan, Russia), the Philippines is the third successive chair with a developing economy agenda (Indonesia in 2013 and China in 2014). Significantly, these developmental and capacity-building priorities will continue through to the end of the decade, with APEC chairmanship being passed to Peru, Vietnam, Papua New Guinea and Chile by 2019.

The Philippines will also focus on a number of important externally-driven liberalization priorities: the completion of the ASEAN single market by the end of 2015; the ratification of the WTO’s landmark Trade Facilitation Agreement which will reduce border frictions and expenses as exports pass through customs; and the long-sought update of the Information Technology Agreement (ITA) which will bring down tariffs on IT products. Also significant will be the mid-year ratification of the ambitious Pacific Alliance, a trade agreement between Chile, Colombia, Mexico and Chile (three of these are APEC members) which will improve the integration of the south American economies into the Asia-dominated APEC.

Perhaps the single most encouraging aspect of Philippine leadership on market-opening in 2015 is that the Philippines has in the past been one of APEC’s most reluctant reformers. By most international measures, the Philippines remains one of the world’s most protected, and least easy in which to do business. That the government in Manila is setting such a clear and comprehensive liberalization agenda must be encouraging for the whole region. The year’s activity may well be buffeted by a typhoon or two, but Laura del Rosario seems emergency-prepared to deliver some results that could be important to business across the region.

– Contact us at [email protected]

RC

Executive director of the Hong Kong APEC Trade Policy Group

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