Committee on Trade and Investment
The Committee on Trade and Investment (CTI) was established in November 1993 by the Declaration of an APEC Trade and Investment Framework. APEC Leaders and Ministers direct its work and APEC Senior Officials provide guidance. The scope of the CTI’s work was expanded and further clarified by the Osaka Action Agenda in 1995.
The CTI provides a forum for APEC’s 21 member economies to deliberate trade and policy issues. It works to reduce impediments to business activity in the areas outlined by the Osaka Action Agenda, with the objective of helping APEC economies achieve free and open trade and investment.
Trade and investment liberalisation and facilitation are the cornerstones of APEC’s mission and activities, and the Committee on Trade and Investment (CTI) is the coordinating body for all of APEC’s work in these areas.
The CTI oversees:Eight sub-groups:
- Business Mobility Group (BMG)
- Electronic Commerce Steering Group (ECSG)
- Group on Services (GOS)
- Intellectual Property Experts Group (IPEG)
- Investment Experts Group (IEG)
- Market Access Group (MAG)
- Sub-Committee on Standards Conformance (SCSC)
- Sub-Committee on Customs Procedures (SCCP)
- Automotive Dialogue (AD)
- Chemical Dialogue (CD)
- Life Sciences Innovation Forum (LSIF)
Ad-hoc Public-Private Dialogue
- APEC Alliance for Supply Chain Connectivity (A2C2)
- APEC Regulatory Cooperation Advancement Mechanism on Trade Related Standards and Technical Regulations (ARCAM)
- Environmental Goods and Services (PPEGS)
Last page update: May 2018
The CTI’s current work program is organized around three priority areas under the 2018 APEC theme, “Harnessing Inclusive Opportunities, Embracing the Digital Future.” Its 2017 priorities include:
- Support for the multilateral trading system
- The Free Trade Area in the Asia-Pacific (FTAAP)
- The Internet, digital economy and e-commerce
- Trade in Services
- Access of micro, small and medium-sized enterprises (MSMEs) to global and regional markets
- GVC Cooperation and Development
- Environmental Goods and Services/Green Growth
- Trade Facilitation/Supply Chain/Connectivity
An overview of the work of the CTI and its 11 working groups—the dialogues, initiatives and achievements made in 2017—are encapsulated in the 2017 CTI Annual Report to Ministers endorsed at the 29th APEC Annual Ministers Meeting in November 2017.
For 2018, the CTI will continue to advance trade and investment initiatives and other related actions as directed by ministers and Leaders in Da Nang in 2017, as well as those actions outlined in its 2017 Annual Report to Ministers.
A summary of CTI initiatives and achievements include, among others:
Support for the Multilateral Trading System
The CTI and its subfora continue to exchange views on possible contributions they could make in support of the World Trade Organisation (WTO), in part in response to outcomes of the 11th WTO Ministerial Conference (MC11) held in Buenos Aires in December 2017. There were several proposals aimed at complementing the implementation of multilateral trade agreements.
The CTI has been facilitating the implementation by APEC economies of the WTO Trade Facilitation Agreement (TFA), which entered into force on 22 February 2017. The CTI has been continuously monitoring the progress of economies in implementing the TFA in order to determine if there is any need for capacity building. Various targeted capacity-building projects have been implemented to help economies implement the TFA.
There are initiatives implemented and/or proposed at the CTI, which aims at contemplating the implementation of the multilateral trade agreements.
The CTI is conducting the monitoring of the implementation by APEC economies of the WTO commitments on export subsidy through a systematic method for information sharing and exchange, which has begun in 2017.
The CTI agreed to a proposal to promote additional transparency for APEC member economies and businesses regarding the WTO notification processes of sanitary and phytosanitary (SPS) notifications. Methods to carry out the proposal are under discussion.
The CTI, together with the Market Access Group (MAG), has been monitoring the efforts of by APEC economies to expand the Information Technology Agreement (ITA), which was agreed upon by participating members in 2016. The ITA, which requires participants to eliminate duties on IT products covered by the agreement, was expanded to include additional 201 products which were not originally included; new products that have entered the market, and products which have evolved and have different characteristics today. Expanding the Information Technology Agreement will ultimately ensure greater access and lower prices for consumers. The implementation dates of the tariff cuts are as follows:
- First set – 1 July 2016
- Second set – 1 July 2017
- Third set – 1 July 2018; and
- Effective Elimination no later than 1 July 2019
Achieving the Bogor Goals
Following the Second-term Bogor Goals Review conducted in 2016, preparation is underway to implement the 2018 Bogor Goals to analyze and assess progress made towards attaining trade and investment liberalization and facilitation.
The Second-term Bogor Goals Review is made up of the following:
The reports highlighted a slowing of the growth of trade in goods in recent years due to structural elements, such as
- The development of global value chains
- The pace of progress towards zero tariffs slowing down after 2010, despite the substantial reduction of tariffs from 1994 to 2015
- The increase of the number of non-tariff measures (NTMs) applied and its growing importance
- The marked increase of trade in services, especially the increasing involvement and importance of developing economies
- The aggravation of perception on the business environment.
The reports provide a basis to identify areas to further focus and priorities to conduct work towards meeting the Bogor Goals.
Exploring an FTAAP
The Beijing Roadmap for APEC’s Contribution to the Realization of the FTAPP (The Beijing Roadmap), agreed on by leaders in 2014, is one of the core initiatives related to advancing regional economic integration. The Beijing Roadmap comprises of
- Conducting the Collective Strategic Study on Issues Related to the Realization of the FTAAP,
- Implementing capacity building relating to provisions set in FTAs/RTAs
- Conducting information sharing on FTAs/RTAs.
The Collective Strategic Study on Issues related to the Realisation of the FTAAP was finalized in November 2016.
The CTI played a major role in drafting the study, which provides analysis on topics such as
- Next-generation trade and investment issues
- Measures affecting trade and investment
- Stocktaking of existing RTAs/FTAs in the Asia-Pacific region and ongoing regional undertakings
- Stocktaking of initiatives and outcomes relevant to FTAAP
- Opportunities and Challenges.
Based on the study, in November 2016, Leaders issued a recommendation—“The Lima Declaration on Free Trade Area of the Asia-Pacific (FTAAP)”—instructing officials to implement necessary works to move towards the eventual realization of the FTAAP and to implement the Lima Declaration on FTAAP. Currently, a suite of initiatives/work programs have been proposed and discussed.
Under the 2nd Regional Economic Integration (REI) Capacity Building Needs Initiative (CBNI 2) 2015–2017, capacity building activities for various FTA/RTA provisions have been implemented in order to nurture an understanding of these provisions. The goal is contributing to the building capacity of developing economies to negotiate high-quality and comprehensive FTAs/RTAs, which include provisions on environment, intellectual property rights, transparency, competition, e-commerce, non-tariff measures and others. To further continue and build upon the work conducted under the CBNI, the CTI agreed to launch Phase 3 of the Capacity Building Needs Initiative (CBNI) from 2018 to 2020. Currently, projects have started or are expected to be implemented under phase 3 of the CBNI.
The CTI has been implementing a number of information-sharing activities about FTAs and RTAs under the Beijing Roadmap. In 2017, a trade policy dialogue on the WTO-plus aspects of recently concluded RTA and FTAs was held on May 2017 in the margins of CTI2, which highlighted on the progressive elements of the Canada – European Union Comprehensive Economic and Trade Agreement, as well as on Singapore’s approaches regarding technical barriers to trade in its recent FTAs. In August 2017, the Senior Officials’ Meeting (SOM) Dialogue on RTA/FTAs was held in the margins of SOM3. For the works of APEC on capacity building and information sharing, as well as on comparative tool for intra APEC FTAs/ RTAs, see here.
Global Value Chains
The CTI has been implementing the APEC Strategic Blueprint for Promoting Global Value Chains Development and Cooperation (GVCs Blueprint) agreed upon by leaders in 2014. The blueprint includes projects and initiatives related the nine work streams:
Work Stream 1 – Addressing trade and investment issues that impact GVCs (United States);
Work Stream 2 – APEC GVCs and trade in value added (TiVA) measurement (China; United States);
Work Stream 3 – Realize the critical role of trade in services within GVCs (Australia);
Work Stream 4 – Enable developing economies to participate in GVCs (Indonesia; China);
Work Stream 5 – Assist SMEs to benefit from GVCs (Korea);
Work Stream 6 – Improve the investment climate for GVCs development (Japan);
Work Stream 7 – Adapt effective trade facilitation measures (Singapore);
Work Stream 8 – Enhance resiliency of GVCs (Japan); and
Work Stream 9 – Integration of public-private partnership and dialogues in Work Plans.
Progress was achieved, including the establishment of the “APEC Global Value Chain Partnership Platform” and the development of the report, “Improve the investment climate for GVCs development.”
Work at the CTI is in progress to develop the APEC Trade in Value Added (TiVA) Database by the end of 2018.
Digital Economy and E-Commerce
The CTI has been discussing and implementing issues related to digital trade and e-commerce. In 2016, two trade policy dialogues on digital trade were held in order to enhance a better understanding of the current situation and the notion of digital trade among economies. In order to further advance the work on digital trade, the CTI agreed on the “Work Plan to identify building blocks to facilitate digital trade for 2018.” On the basis of the work plan, discussions are ongoing about a proposal for a set of possible elements (“Building Blocks”) to facilitate digital trade. The Trade Policy Dialogue on Digital Trade will be held in 2018 to deepen economies’ understanding of these Building Blocks to facilitate digital trade.
A study will be conducted on business models that utilize digital trade; it will analyze and identify opportunities, benefits and challenges of its use.
A proposal is under discussion to collect data on the regulations of APEC economies related to e-commerce in order to disseminate them through the APEC Trade Repository (APECTR) to provide more transparency for the benefit of stakeholders, such as MSMEs, for conducting cross-border e-commerce.
Environmental Goods and Services/Green Growth
Intensive work was done in 2015 to implement the Leaders’ commitment to reduce applied tariff rates on the 54 products in the APEC List of Environmental Goods (the EG List) to 5 per cent or less by the end of that year. It was done in accordance with the agreement reached in 2012 in Vladivostok. Updates were compiled and published on the APEC website in January 2016. Each economy agreed to publish detailed implementation plans, which serve to enhance transparency for business and other stakeholders on tariff reductions under the EG List. The CTI continues to monitor the progress of implementing this commitment, with a view to realize its full implementation.
The CTI has also been implementing the Environmental Services Action Plan (ESAP), endorsed by ministers in 2015. As an initial part of Phase I, a survey was conducted by the APEC Policy Support Unit (PSU) on Regulatory Measures in Environmental Services on various regulatory aspects of environmental services in APEC economies that are classified under customs procedure code 94. Further steps were implemented in 2017, where case studies and policy dialogues were held to build and enhance common understanding of the role of a wider range of environmental services, including water, refuse disposal and recycling, environmental damage remediation service, renewable energy and energy efficiency. Building on these works, an interim review of the ESAP is planned to be conducted in 2018.
Works on facilitating green production and supply chains continue under the initiative on “APEC Cooperation Network on Green Supply Chain” agreed upon by Leaders in 2014.
Integrating MSMEs into Global Regional Markets
Support for micro, small and medium-sized enterprises (MSMEs) has been a priority for APEC, given its importance from the viewpoint of promoting inclusive growth and maximizing the benefits of trade and investment liberalization and facilitation. The CTI has been supporting this process through various initiatives and projects related to MSME’s access to international and regional markets. This includes:
- Promoting the participation of MSMEs in global value chains (GVCs) – Currently, the focus is on implementing projects on participation in the GVCs of services industry MSMEs. For example, projects of the kind related to the fashion design industry and logistics have been undertaken. Projects related to the tourism and software industry are planned to be carried out in 2018.
- Contributing to the implementation of the Boracay Action Agenda
- Promoting e-commerce to globalize MSMEs – A study was conducted to identify challenges for MSMEs to utilize e-commerce and suggestions to facilitate MSMEs utilization of e-commerce.
- Supporting industry initiative – “APEC Best Practices for Promoting Supporting Industry in the Asia Pacific Region” were agreed upon by CTI and welcomed by ministers in 2017.
- Developing a compendium on methodologies for SMEs internationalization – The Joint CTI – APEC SME Working Group (SMEWG) are compiling a compendium of economies’ initiatives and success stories to facilitate MSMEs’ access to international and regional markets, for disclosure on the “SMEs Market Place” website. Some economies provided inputs. Additional economies are planning to provide inputs to the compendium.
Advancing the Services Trade Agenda
In 2016, the CTI advanced a number of issues related to services trade. Under the leaders’ instruction to develop a strategic and long-term APEC Services Competitiveness Roadmap (ASCR) in 2016, the CTI served as a core forum in the drafting process. The Group on Services (GOS) under the CTI has been monitoring the progress of the roadmap’s implementation, as mandated by Senior Officials. The GOS and the APEC Business Advisory Council (ABAC) intensified their cooperation inimplementing the ASCR through such means as GOS presenting ABAC on progress made, and the GOS catering to the council’s requests for further consideration.
In relation to the ASCR, on the basis of a proposal by Korea, works related to developing a set of nonbinding principals for domestic regulation of the services sector is ongoing. Drafting of the nonbinding principles is expected to start in May 2018.
In addition, the CTI and GOS agreed on a proposal to develop indicators for measuring the regulatory environment of the services trade of APEC economies (APEC Index). A technical group was established under the GOS to discuss and coordinate details to develop and implement the APEC Index.
The CTI is also working on sectoral issues on trade in services. With a view to facilitate the liberalization of manufacturing-related services, the Manufacturing-related Services Action Plan (MSAP) was endorsed by the ministers in 2015. In 2018, an interim review to examine progress under the MSAP will be conducted.
Strengthening Comprehensive Connectivity and Infrastructure
The CTI and the Subcommittee on Customs Procedures (SCCP) continue to review the progress made in various initiatives to improve supply chain performance, including capacity building work to improve economies’ ability to prepare for implementing the articles included in the WTO Trade Facilitation Agreement (TFA).
Five targeted capacity building projects funded by the APEC Supply Chain Connectivity sub-fund have been implemented and were completed in 2017. The projects provided capacity building and technical assistance to implement the TFA’s provisions on pre-arrival processing, advance rulings, expedited shipments, release of goods and electronic payments. In 2018, three new targeted capacity building projects started:
- Addressing obligations under Article 1 of the WTO Trade Facilitation Agreement
- Advance Rulings Phase II
- Expedited Shipment Phase II
The CTI is working to collect data on regulations on Advance Rulings of APEC economies in order to disseminate them through the APEC Trade Repository (APECTR) to serve as providing more transparency to stakeholders, such as MSMEs, to help them conduct business.
To continue efforts under the Supply Chain Connectivity Framework Action Plan 2010–2015 (SCFAP) to improve supply chain performance, the Framework for Phase Two of Supply Chain Connectivity Framework Action Plan 2017–2020 (SCFAP Phase II) was endorsed by the leaders in 2016. The SCFAP Phase II lays out five chokepoints to address in improving the supply chain performance:
- Chokepoint 1: Lack of coordinated border management and underdeveloped border clearance and procedures;
- Chokepoint 2: Inadequate quality and lack of access to transportation infrastructure and services;
- Chokepoint 3: Unreliable logistics services and high logistical costs;
- Chokepoint 4: Limited regulatory cooperation and best practices; and
- Chokepoint 5: Underdeveloped policy and regulatory infrastructure for e-commerce
In 2017, the Monitoring Framework for the Implementation of the SCFAP Phase II was endorsed by ministers. It includes targets and indicators and action plans corresponding to the respective choke points as identified in the SCFAP Phase II.
Currently, the CTI, SCCP and other related fora are working towards further improving supply chain performance in line with the SCFAP II.
A series of meetings of the APEC alliance for Supply Chain Connectivity (A2C2)—an advisory group consisting of supply chain and customs experts from the public and private sectors—have been held to gain business’s view to improve supply chain performance and to implement the TFA.
A series of activities to improve and realize an effective supply chain system through model e-ports have been conducted under the Asia-Pacific Model E-Port Network (APMEN). Leaders agreed to establish it in 2014.
The CTI has been contributing to the APEC Connectivity Blue Print through a series of initiatives related to quality infrastructure investment. This includes the “Peer Review and Capacity Building on Infrastructure Development and Investment.” Peer review was conducted for the Philippines and Viet Nam, and follow-up capacity building sessions were conducted in the Philippines. In addition, CTI is currently discussing the possibility of upgrading the “APEC Guidebook on Quality Infrastructure Development and Investment”.
Expanding Regulatory Cooperation and Advancing Regulatory Coherence
The CTI’s key contribution to regulatory convergence and cooperation is done through its implementation of the APEC Regulatory Cooperation Advancement Mechanism on Trade and Related Standards and Technical Regulations (ARCAM) established by Ministers in November 2010. Since its inception, the CTI has addressed the issues of:
- Interoperability standards for smart grid (2011);
- Self-regulation in advertising (2012); and
- Electric vehicle standards (2014)
- Sustainable materials management (SMM) (2016)
On SMM, which is a systematic approach to using and reusing materials more productively over their entire lifecycles, from the point of resource extraction through material recycling or final disposal in order to reduce environmental impacts, conserve resources and reduce costs, the report on “Facilitating Trade and Investment in SMM Solutions in the APEC Region” was agreed upon by the CTI 2017. The committee also conducted follow-up activities on advertising standards, such as a report on “Promoting Competitiveness: Test of Ex Ante Control of Regulations on Advertising.”
Interaction with ABAC
In 2017, the CTI and its subfora delivered outcomes consistent with ABAC’s 2016 recommendations. CTI continues to collaborate with ABAC to reflect business’s views to its work.
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Average applied tariffs in APEC economies have been reduced from 16.9 percent in 1989, when APEC was established, to around 5.2 percent in 2012
In 2013 CTI adopted a work program organized around five priority areas that contribute to APEC 2013 Priorities under the theme of “Resilient Asia-Pacific, Engine of Global Growth.”
Collective Strategic Study on Issues Related to the Realization of the FTAAP(2.26 MB, pdf)
Executive Summary of the Collective Strategic Study on Issues Related to the Realization of the FTAAP
Recommendations accompanying the Collective Strategic Study on Issues Related to the Realization of the FTAAP
Suggested Framework for Phase Two of the Supply Chain Connectivity Framework Action Plan 2017- 2020 (SCFAP Phase II)
Osaka Action Agenda 2002 Update
Workshop on Best Practices of Trade Facilitation Agreement (TFA) Implementation within APEC Economies: Opportunities and Challenges (CTI 13 2018A)Bali, Indonesia
APEC Capacity Building Workshop on RTA/FTA Negotiation Skills on Small and Medium Enterprises (CTI 10 2018A)Ho Chi Minh City, Viet Nam
Mr Justin ALLEN
New Zealand Ministry of Foreign Affairs & Trade
Ms CHAU Chung-Linh