Inclusion of MSMEs in global trade pushed
AS THE Philippines’ hosting of the Asia Pacific Economic Cooperation (Apec) meetings comes to a close, the country could only be commended for a job well done.
The last eight months saw government officials and industry leaders from Pacific Rim countries flying in and out of the Philippines to thresh out issues and advance initiatives aimed at boosting free trade and economic cooperation. New measures have been proposed and key action plans have been adopted by ministers across the 21 member economies of Apec.
And in November, the Philippines’ hosting will culminate in a Leaders Summit that will gather the heads of economies across the region, with hopes that they will adopt the proposal of the Philippines to put the micro, small and medium sized enterprises (MSMEs) at the front and center of global trade policies.
So what has happened so far?
Two of the biggest takeaways from the Apec meetings since these started in January this year would be the Boracay Action Agenda, which was adopted by trade ministers on the tourist island of Boracay last May, and the Cebu Action Plan, which was adopted by finance ministers in Cebu earlier this month.
Boracay agenda
Apec trade ministers endorsed in May the “Boracay Action Agenda to Globalize MSMEs,” which was deemed “quite an accomplishment for the chairmanship of the Philippines” as this served as a broad recognition by member economies of the agenda being pushed by the country.
The Boracay Action Agenda is an action-oriented initiative that supports Apec’s ongoing work to address the barriers faced by MSMEs in international trade. Apec has identified priority areas for cooperation and action, namely trade facilitation, e-commerce, financing and institutional support, including those for women-led MSMEs. Through this agenda, Apec members will facilitate MSMEs’ access to regional and global markets.
“We recognize that MSMEs are an important force in economic activity, growth, job creation, community resilience and innovation. We will complement Apec’s initiatives in promoting MSMEs’ participation in global value chains with an agenda that will support micro and small enterprises as direct exporters,” Trade Secretary Gregory L. Domingo said.
One of the more notable achievements during the Ministers Responsible for Trade (MRT) meeting in May was the members’ support for the World Trade Organization’s (WTO) move to expand the Information Technology Agreement to cover tariff reduction for more IT goods valued at $1.3 trillion a year.
The support for the WTO clause in the statement of the MRT was heavily debated during the meeting in Boracay.
Cebu action plan
Finance officials of Pacific Rim economies also approved a road map called Cebu Action Plan, which was aimed at integrating the region’s financial sector while enhancing resiliency, fiscal transparency and infrastructure development.
The 10-year plan called for measures to ensure that Apec economies would be resilient to financial shocks, bounce back when disaster strikes and sustain the economic growth being enjoyed now. It has four pillars—promoting financial integration; advancing fiscal reforms and transparency; enhancing financial resiliency, and accelerating infrastructure development and financing.
Specifically, the Cebu Action Plan aims to facilitate trade and investments in the region; pursue good governance and sound fiscal policies; deepen financial markets that offer diversified financial instruments; advance financial inclusion for all households and business (including those led by women); enhance financial resilience to global market volatility and natural disasters, and mobilize more financing for quality infrastructure development to sustain growth.
Meanwhile, discussions throughout the year continued on key issues affecting the regional and global business climate, while new initiatives were pushed and launched to help realize the goals of Apec, which primarily revolves around trade facilitation and inclusive, sustainable economic growth. Here’s a snapshot of what has happened at Apec meetings thus far.
Events
The First Senior Officials’ Meeting (SOM1) and Related Meetings, which were held from Jan. 26 to Feb. 7 in Subic and Clark, served as the opening salvo of the Philippines’ hosting.
Discussions and actions were centered largely on issues including the Free Trade Area of the Asia-Pacific, trade facilitation and implementation of the WTO Bali Package, environmental goods and services liberalization, boosting anti-corruption, counter-terrorism, disaster preparedness, human capital and MSME development, resilient infrastructure, and oceans and fisheries-related issues.
In Tagaytay last March, finance and central bank officials first firmed up a proposal to make the region more financially integrated, transparent and resilient alongside infrastructure development. This was when officials agreed to make the then proposed Cebu Action Plan the key agenda for the Apec Finance Ministers’ meeting that was held earlier this month.
In Manila, the Philippines and Malaysia made a pitch in April during the 22nd Automotive Dialogue Meeting to undertake a study project that will map out the measures and initiatives needed to ease the integration of SMSEs into the global value chains (GVCs) of automotive companies.
The proposed GVC-SME for the Automotive Sector Project was not only meant to help SMEs cope with the challenges of globalization, but also underscored and highlighted the unique role that SMSEs play in a $1.5-trillion automotive parts industry.
Apec economies also discussed the completion of the electric vehicle roadmap for the bloc within the year as it builds on the work spearheaded by China last year in bringing focus on new energy vehicles.
In Boracay, Aklan, the Second Senior Officials’ Meeting (SOM2) and Related Meetings discussed last May preparations on three scheduled high-level meetings, namely the High-Level Policy Dialogue on Science and Technology in Higher Education, the Senior Disaster Management Officials’ Forum, and the Structural Reform Ministerial Meeting.
It was also during this time that the MRT meeting was held, which saw trade ministers endorsing the Boracay Action Agenda.
Last June, The Senior Finance Officials’ Meeting kicked off in Bagac, Bataan, where the proposed measures under the Cebu Action Plan were threshed out. The plan garnered more support despite the fact that some members expressed reservations on some the proposed provisions.
Among the issues raised was the establishment of collateral agencies and credit information bureaus because some member economies will have to enact new laws to create such institutions; and capital account liberalization, which can only be done if and when the Apec members’ respective domestic financial systems and regulations have been tweaked to facilitate greater financial sector liberalization across the region.
In Iloilo City, officials from finance ministries and multilateral organizations, infrastructure experts and capital market players across Apec member-economies discussed last July infrastructure and capital market development in the Asia Pacific region.
With the theme “Fostering Apec’s Infrastructure through Long-term Investment and Capital Market Development,” the meeting was then aimed at soliciting proposals and sharing best practices to boost connectivity and mobility within and across member-economies, particularly through more active capital markets.
A side event in Manila was the Slingshot MNL 2015, which provided a platform that can help Philippine startup companies forge partnerships with potential angel investors and address other concerns that could boost their competitiveness in the global and regional trade.
At the Third Senior Officials’ Meeting and Related Meetings held in Cebu in August and September, Apec economies were urged to focus on initiatives that will address the daily concerns of an average citizen. Such initiatives are those that can further open up more opportunities for the average person whether in terms of trade and
investments, education or social equity.
Meetings also included the High Level Meeting on Health and the Economy; the Public-Private Dialogue on Water; and the Symposium on Urbanization. Health, water, and urbanization were deemed to be interrelated issues that affect sustainable economic growth and development.
Approval
Finance ministers also approved the Cebu Action Plan, which would be endorsed to the Apec leaders in the summit in November this year. This plan was likewise endorsed by the Apec Business Advisory Council.
On the sidelines of the finance officials’ meeting in Cebu, six Apec economies signed a paper on the Asia Region Funds Passport, an initiative aimed at allowing financial services professionals to sell investment products to retail customers in other countries. Signatories included the Philippines, Australia, Japan, New Zealand, South Korea and Thailand.
In Manila, the Apec High Level Policy Dialogue on Women and the Economy was held with the aim of advancing gender integration and gender equality to boost the economic participation of women across the region. It was noted that as much as $89 billion could be added to the economies of Apec member-states yearly, if women in the region were enabled to realize their full potential.
One of the more concrete takeaways from this meeting was the launching of a health policy toolkit containing a menu of recommendations geared toward boosting the participation and contribution of women to the regional and global economy.
Another development was the creation of a dashboard of indicators providing a snapshot of the status of women in Apec. This was developed by the Apec Policy Partnership on Women and the Economy (Apec-PPWE) as a tool to measure the progress of women’s participation in economic-related activities.
Upcoming meetings
To be held later this month in Iloilo are the 22nd Small and Medium Sized Enterprises Ministerial Meeting, the Apec SME Finance Forum and the High Level Policy Dialogue on Agricultural Biotechnology.
Next month, the Philippines will host the High Level Policy Dialogue on Food Security and the Blue Economy in Iloilo as well as the Transportation Ministerial Meeting and 12th Apec Energy Ministerial Meeting, both in Cebu.
November will see the culmination of the Philippines’ hosting of the Apec meetings with the Concluding Senior Officials Meeting, Ministerial Meeting, CEO Summit, SME Summit and, finally, the Apec Economic Leaders’ Meeting.
