an analysis of options to enhance apec and wto's ...this is the reason why apec has indicated...

An Analysis of Options to Enhance APEC and

WTO's Cooperation in Promoting Trade

Facilitation

■Chen-Sheng HO / Taiwan Institute of Economic Research Associate Research Fellow

Abstract

APEC and WTO have been working to promote trade facilitation in the past

few years. In the case of APEC, it has asked its members to produce trade facili-

tation actions collectively and individually. However, APEC has been emphasiz-

ing trade liberalization in comparison to trade facilitation. Recently, APEC mem-

bers have recognized that their work in trade facilitation needs to be strengthened

further. APEC's Shanghai Accord states that APEC seeks to achieve a 5% reduc-

tion in the trade transaction costs by 2006. In addition, APEC has come out with

the Trade Facilitation Action Plan to ensure the achievement of the 5% target.

We can clearly see that APEC is serious about enhancing its work in trade facili-

tation.

WTO is also seeking to become more productive in the area of trade facilita-

tion. For many years, WTO members have been sharing their experiences in

trade facilitation. With the arrival of the Doha Development Agenda, WTO is

indicating that it will do more to promote trade facilitation. Since both APEC

and WTO are pursuing the same goal of seeking to advance their work in trade

facilitation, there is ample room for cooperation between them. The purpose of

亞太經濟合作評論，第十期（民國九十一年十二月）， 84-103

中華台北APEC研究中心

中華民國91年12月 / 第十期84

亞太經濟合作評論 APEC Review

中華民國91年12月 / 第十期 85


WTO's Cooperation in Promoting Trade Facilitation

this paper is to suggest ways for APEC and WTO to cooperate with each other so

that their work in trade facilitation could be strengthened further. In order to

evaluate options suggested for enhancing cooperation between APEC and WTO,

the Prince Analysis method for analyzing political feasibility is utilized in the

paper.

1. Introduction

The promotion of trade facilitation is an important part of APEC's work for many years.

APEC members, working collectively and individually, have been producing actions in the

area of trade facilitation. However, APEC has been emphasizing trade liberalization in com-

parison to trade facilitation. Recently, there exists the viewpoint among APEC members that

greater emphasis should be placed on trade facilitation. This is the reason why APEC has

come out with the objective of lowering trade transaction costs by 5% and the Trade

Facilitation Action Plan.

WTO has also been interested in promoting trade facilitation. Members of WTO have

held several discussions on the subject. In the Doha Development Agenda, WTO members

have included trade facilitation as an important area that merits greater attention. We should

see more significant output from the WTO on trade facilitation in the future. However,

APEC is further ahead than WTO in developing actions in trade facilitation. There is the

possibility for cooperation between APEC and WTO in strengthening their work in trade

facilitation. Therefore, the purpose of this paper is to find ways for APEC and WTO to coop-

erate with each other in the area of trade facilitation.

2. APEC's Work on Trade Facilitation

2.1 APEC Members' IAPs and APEC Fora's Collective Actions

APEC has placed tremendous amount of importance on trade and investment liberaliza-

tion and facilitation (TILF). This is the reason why APEC has indicated TILF to be two of

the three pillars of APEC's work program. Economic and technical cooperation (Ecotech) is

the third pillar. The APEC Economic Leaders' Declaration of the 1994 Bogor goal provided

considerable amount of stimulus for APEC to seriously begin its TILF work. Essentially, the

Bogor goal is about the achievement of free and open trade and investment in the Asia-

Pacific region by 2010 for developed members and 2020 for developing members (APEC

1994).

The momentum to achieve the Bogor goal continued in the following year in 1995 with

APEC's creation of the Osaka Action Agenda (OAA). The OAA is APEC's implementation

program for reaching the Bogor goal (APEC 1995). The OAA's Framework for

Liberalization and Facilitation clearly calls for the establishment of Individual Action Plans

(IAPs). The Framework states that the APEC's liberalization and facilitation process to

achieve goals of the Bogor Declaration will include actions by each APEC member (APEC

1995). APEC economies have consistently followed this instruction since 1996, through the

production of IAPs on an annual basis. The OAA's Framework for Liberalization and

Facilitation has also explicitly stated that actions by APEC fora constitute a part of APEC's

process of liberalization and facilitation for reaching goals of the Bogor Declaration (APEC

1995). The result is the creation of collective actions by APEC fora.

Subsequently, the Manila Action Plan for APEC (MAPA) was announced during the

1996 Economic Leaders' Meeting in Subic Bay (APEC 1996). MAPA begins the process in

which Individual Action Plans (IAPs) and Collective Action Plans (CAPs) are presented each

year for achieving the Bogor goal. Every APEC economy produces an IAP each year that

states its TILF commitments. The Committee of Trade and Investment (CTI) and CTI fora

are in charge of coming out with CAPs on an annual basis. Additionally, APEC working

groups, such as the Energy Working Group (EWG), Telecommunications Working Group

(TELWG), and Transportation Working Group (TPTWG) have also been actively producing

collective actions that liberalize and facilitate trade and investment.

APEC members have been quite productive in the area of trade facilitation. The trade

facilitation collective actions could be classified as being primary actions or secondary

actions. Primary actions are APEC trade facilitation actions that truly lead to the reduction of

transaction costs. Examples of existing primary actions in APEC are: 1) mutual recognition






arrangements (MRA); 2) enhancement of business mobility; and 3) harmonization of stan-

dards. Secondary actions consist of APEC trade facilitation actions that principally seek to

provide information and guidelines. Examples of secondary actions are: 1) menu of options;

2) best practices; 3) principles; 4) conferences; 5) workshops; 6) seminars; and 7) assessment

studies (Ho 2002).

The majority of the APEC trade facilitation actions belong to the secondary actions.

These actions are numerous in APEC because it is much easier to formulate and implement

secondary actions relative to primary actions. Since the secondary actions principally pro-

vide information and guidelines, there is no obligation to follow the guidelines or utilize the

information. On the other hand, primary actions entail more effort to accomplish and to

implement. These actions would certainly have positive effects on facilitating trade by low-

ering the costs of doing business (Ho 2002).

In the case of commitments in the IAPs, further study is necessary to determine the

extent to which the IAP commitments focus on trade facilitation. A suggestion to improve the

IAPs is that APEC members could indicate which TILF categories their IAP commitments

belong to in their IAPs. The IAP commitments could be classified as pertaining to trade

facilitation, trade liberalization, investment facilitation, investment liberalization or all of

them. At present, APEC does not make this kind of classification. The purpose is to allow us

to know which IAP commitments are related to trade facilitation. APEC members would

also be able to determine which TILF categories need more commitments, so that the work to

achieve the Bogor goals is done in a balance and well thought out manner (Ho 2001).

2.2 APEC's Promotion of Trade Facilitation

APEC has begun to emphasize its work on trade facilitation recently. According to

APEC Economic Leaders, they continue to put the highest priority on facilitating the flow of

goods and services and decreasing international transactions' cost. The main beneficiaries are

business, consumers and small and medium enterprises (SMEs). The Economic Leaders call

on Ministers and officials to come up with a set of principles on trade facilitation in 2001.

Trade facilitation should be addressed in an integrated way, in order to assist in reducing the

cost of doing business in the APEC region (APEC 2000). Woo has stated that APEC has

plenty of room to seriously strive for achieving the Bogor goal through trade facilitation

(Woo 2000).

According to Woo, a single definition of trade facilitation does not exist. Generally,

trade facilitation means simplifying procedural and administrative impediments to trade.

Examples of areas where work in trade facilitation has focused on are customs administra-

tion, standards and technical regulations, and mobility of business people. In APEC, trade

facilitation is also called business facilitation or “cutting red tape.” Business has been

emphasizing the importance of trade facilitation issues. The reason is that customs' delays,

multiple testing requirements, and barriers to business mobility greatly affect costs to con-

sumers (Woo 2000).

The APEC Business Advisory Council (ABAC) has made recommendations on busi-

ness facilitation in its 2000 Report to the APEC Economic Leaders titled Facing

Globalization the APEC Way. The Report has recommended that APEC should remove stan-

dards and conformance-testing impediments to international business. APEC economies

should also align their own domestic standards with international standards. ABAC supports

APEC government -business dialogues for promoting APEC's facilitation agenda, such as the

APEC Auto-Dialogue. In addition, ABAC seeks to promote business mobility. ABAC

endorses the APEC Business Travel Card (ABTC) program. The Council also supports pre-

clearance procedures for expediting the movement of travelers. Another recommendation

calls on APEC to streamline visa processing, so that business and professional people can

move to work temporarily within APEC economies (ABAC 2000).

In recognition of the importance of the trade facilitation agenda, APEC's CTI has creat-

ed the Ad-hoc Task Force on the Development of APEC Principles on Trade Facilitation. The

APEC Principles on Trade Facilitation is now available. The document consists of the pream-

ble, nine principles and examples to illustrate the principles. The preamble states the impor-

tance of trade facilitation to APEC in providing benefits to governments and business. The

advancement of trade facilitation will be accomplished through individual and collective

actions. It further relates that principles are non-binding and implementation is voluntary.

Additionally, the preamble says that APEC members should provide sufficient protection

against unlawful activities, such as commercial fraud and trafficking in illegal goods.

Another noteworthy point is that the definition of trade facilitation is given in the preamble.






Trade facilitation is defined as simplifying and harmonizing international trade procedures

(CTI 2001e).

The preamble has been developed in a clear and precise manner. Two interesting points

are presented in the preamble. First, the preamble has pointed out the necessity of preventing

illegal activities. This point is important because APEC members would not want to see that

in the course of facilitating trade, they also facilitate illegal activities. The stating of the trade

facilitation definition is also significant, because it provides us with a clearer understanding

of APEC's work in trade facilitation.

The APEC Principles on Trade Facilitation contains nine principles regarding issues of

1) Transparency; 2) Communication and Consultations; 3) Simplification, Practicability and

Efficiency; 4) Non-discrimination; 5) Consistency and Predictability; 6) Harmonization,

Standardization and Recognition; 7) Modernization and the Used of New Technology; 8)

Due Process; and 9) Cooperation. In each of the above issues, examples of actions that APEC

members could implement are shown (CTI 2001e). The principles and the illustrative exam-

ples are presented clearly. APEC's work on trade facilitation will certainly be strengthened

with the creation of the APEC Principles on Trade Facilitation.

In 2001, APEC Economic Leaders came out with the Shanghai Accord for the purpose

of stimulating APEC's work in trade and investment liberalization and facilitation; and eco-

nomic and technical cooperation. Specifically, the Economic Leaders call on APEC mem-

bers to implement trade facilitation actions, in order to reduce trade transaction costs by 5%

by 2006 (APEC 2001). The stating of this numerical objective is a significant event for

APEC's work in trade facilitation, because it shows APEC is serious about promoting trade

facilitation. It would be easier now to analyze whether or not APEC has been able to achieve

the 5% target. Thus APEC members would be more likely to produce trade facilitation

actions, in order to show that they are doing something to achieve the above specific objec-

tive.

After the announcement of the 5% target, APEC has developed the Trade Facilitation

Action Plan in 2002 to accomplish the objective by 2006. We can infer that APEC is

extremely serious about promoting trade facilitation in coming out with the objective and the

Plan. The Plan states the following schedule of work to be completed:

A. SOM II and MRT 2002: Develop the schedule of work to be accomplished.

B. SOM III 2002: Compile a list of trade facilitation measures.

C. Leaders' and Ministerial Meeting 2002: Obtain approval of the Trade Facilitation Action

Plan

D. SOM I 2003: Begin the implementation of the trade facilitation actions through

IAPs, CAPs and Pathfinder Approach.

E. 2003: Examine review methods and report to the Ministerial Meeting.

F. After 2003: If necessary, APEC fora could develop action plans regarding capacity build-

ing and technical assistance.

G. 2004: Implement a mid-term review of progress using the selected review methods.

H. 2005-2006: Examine the status of reduction of trade transaction costs from implementing

the trade facilitation actions.

3. WTO's Work on Trade Facilitation

Trade facilitation is an important topic for WTO. Paragraph 21 of the Singapore

Ministerial Declaration (WT/MIN(96)/DEC) calls on WTO's Council for Trade in Goods to

undertake analytical work on the simplification of trade procedures. In order to accomplish

this task, the work of other organizations on trade facilitation should be taken into considera-

tion. Finally, the scope for WTO rules in this area could be analyzed (WTO 1996). We can

see that WTO has broadly defined trade facilitation as the simplification of trade procedures.

Since the WTO Ministerial Meeting in Singapore, the Council for Trade in Goods has

been discussing the topic of trade facilitation. From March 9 until March 10 of 1998, the

WTO Trade Facilitation Symposium took place at the WTO. Twenty-seven speakers from the

private sector gave an overview of a number of areas where traders face obstacles when mov-

ing goods across borders. Speakers also came from international organizations, such as IMF,

UNCTAD, World Bank and WCO. They reported their working experiences on trade facilita-






tion (WTO 1999).

In 2000, the Council for Trade in Goods held three informal meetings. Several WTO

members shared their experiences on trade facilitation at the meetings. These presentations

have a number of common themes. First, trade facilitation measures are implemented

because of increasing trade volumes, stagnant administrative budgets and demands from the

private sector. Second, simplified official requirements are an important condition for the

application of information technology. Third, small and medium-sized enterprises (SMEs)

have benefited from simplified procedures and enhanced transparency. Fourth, there has been

an increase in cooperation between the government and the trade community on trade facili-

tation (WTO 2000).

The above paragraphs provide a summary of the work that WTO has done recently on

the topic of trade facilitation. The main subject of discussion at the WTO in recent years has

been to share members' experiences with trade facilitation. The ultimate goal of the WTO is

to come up with rules on trade facilitation. This is not an impossible goal to accomplish, but

certainly more work needs to be done. The topic of trade facilitation is quite new to WTO.

Since the Singapore Ministerial Meeting of the WTO, the WTO's CTG has held numer-

ous discussions on trade facilitation. However, the ultimate goal of developing rules on trade

facilitation has not been reached. In the coming new trade round, the possibility for WTO

members to agree on a set of rules on trade facilitation exists. The reason is that many WTO

members have been relating their positive experiences with trade facilitation.

Several important members of WTO have been voicing their support for WTO to devel-

op rules on trade facilitation. For example, Japan has stated that it is a common belief among

WTO members that trade facilitation strengthen the development of trade and benefits all

members. Therefore, Japan believes that WTO should work more actively in enhancing WTO

rules on trade facilitation (WTO 2000b). Canada has stated that it supports WTO's work in

evaluating the scope for WTO rules on trade facilitation (WTO 2000a).

We can see that WTO members have been supportive of the idea to enhance WTO rules

on trade facilitation. The challenge now lies in getting WTO members to agree on rules of

trade facilitation. The negotiations should take place at the coming new trade round. APEC

has an extremely active role to play in assisting WTO to accomplish the task of agreeing on

rules of trade facilitation. The previous sections have shown that APEC has been successful

in promoting trade facilitation. It is now the right time for WTO to seriously consider rules

on trade facilitation, as the benefits are tremendous.

The 2001 WTO Doha Ministerial Declaration provides information on WTO's future

work in trade facilitation. The Ministers have recognized that there is the need to expedite

the movement, release and clearance of goods. In addition, there exists the necessity to

enhance technical assistance and capacity building in the aforementioned area. They have

agreed that negotiations on trade facilitation issues will begin after the Fifth WTO Ministerial

Conference. The first task of that conference is to decide on modalities of negotiations. In

the period before the Fifth Conference, the WTO Council for Trade in Goods shall identify

the trade facilitation needs of WTO members, with particular emphasis on needs of develop-

ing and least-developed WTO members. WTO is committed to provide technical assistance

and support for capacity building (WTO 2002).

4. Policy Option Analysis

The main purpose of this section is to evaluate the likelihood of APEC members' accep-

tance of the options to strengthen cooperation between APEC and WTO. The evaluation con-

sists of three parts. The first part is to state the objective of the analysis. The options are

developed in order to allow APEC to reach the objective stated in this report. The second part

is to identify the major actors that have influence over the acceptance or rejection of the

options. The third part is the analysis of the options using Prince Analysis (Appendix I) with

additional comments.

4.1 Objective of the Analysis

The main objective of the paper is to provide suggestions for APEC to strengthen

WTO's work on the trade facilitation agenda. We have seen from the above discussions that

APEC and the WTO are aware of the benefits of trade facilitation. Since APEC members

have been creating collective actions dealing with trade facilitation, APEC is in a strong posi-






tion to assist WTO in making greater progress in promoting trade facilitation. At the moment,

WTO's work on trade facilitation has been limited to discussions of members' experiences

and the possibility of creating rules on trade facilitation. Therefore, APEC could play a major

role in contributing to WTO's work on trade facilitation.

4.2 Major Actors

Actors in this report refer to APEC members who have been influential in APEC since

its establishment in 1989, such as ASEAN, Australia, Canada, Japan and U.S. Therefore, they

can exert tremendous amount of influence on all aspects of APEC's work. Australia, Canada,

Japan and U.S. have actively participated in WTO CTG's discussions on trade facilitation. In

addition, China is considered an actor because it is the host economy of APEC activities this

year. Chinese Taipei is listed as an actor because it will play the major role of initiating the

work toward acceptance of the options by APEC. The likely views of these actors regarding

the options are shown in this report.

4.3 Evaluation of Policy Options

1. Option 1: Enhance Cooperation Between APEC's CTI and WTO's Council for Trade in

Goods on Trade Facilitation.

APEC and the WTO have been working on promoting trade facilitation in recent years.

In the case of APEC, the Committee on Trade and Investment (CTI) has been coordinating

APEC fora's work on trade and investment liberalization and facilitation (TILF). WTO's

work on trade facilitation has been under the Council for Trade in Goods (CTG). This option

calls for APEC's CTI to work closely with WTO's CTG through exchange of ideas on trade

facilitation.

This option is extremely politically feasible as is shown by the Prince Analysis in Table

2 of Appendix I. ASEAN, Australia, Canada, China, Japan, Chinese Taipei and the U.S.

would most likely support this option. The reason is that APEC has already done consider-

able amount of work on trade facilitation. The analysis of APEC fora's collective actions

done earlier has shown the importance of trade facilitation. Since this option does not entail

substantial amount of additional effort to cooperate with WTO, the likelihood of this option

being endorsed by APEC is extremely high.

In addition, APEC has been criticized for not producing any tangible results. An

increase in cooperation with WTO is an opportunity for APEC to show to the world that it is

an active organization. An expert on trade facilitation, Woo has stated that “APEC can

rightly claim leadership in identifying trade facilitation as a priority, going back to the forma-

tion of the organization in 1989” (Woo 2000). Therefore, WTO would surely welcome

APEC's participation in WTO CTG's discussions on trade facilitation. WTO's CTG has invit-

ed representatives of international organizations, such as World Bank, IMF, UNCTAD, and

World Customs Organization (WCO) to its discussions on trade facilitation. WTO would

surely welcome APEC's participation once APEC has expressed its desire to participate. It is

unfortunate that APEC has not been active in exchanging ideas with WTO. APEC members

would certainly not be opposed to the idea of cooperating with WTO in promoting trade

facilitation.

2. Option 2: Create an APEC Working Group on Trade Facilitation.

Another possible option for APEC is to create a working group on trade facilitation

under CTI. CTI has been coordinating APEC's work on TILF. Therefore, it is only logical to

place the working group under CTI. The working group has two major purposes. First, the

working group would serves as a coordinator of APEC fora's work on trade facilitation.

Second, the working group would seek greater ties with WTO's CTG on behalf of APEC.

Woo has stated that it would greatly enhance APEC's work on trade facilitation to estab-

lish a group that focuses on trade facilitation. The reason is that the various APEC fora oper-

ate independently of each other. The group could produce an annual Trade Facilitation

Report and hold a Trade Facilitation Ministerial Meeting. Ministers from development, trade

and other trade-related ministries would join together to discuss trade facilitation issues (Woo

2000).

The existence of a working group on trade facilitation would greatly strengthen APEC's

work on trade facilitation. The group could also have more time to develop closer coopera-

tion with WTO's CTG. APEC's influence on WTO in the area of trade facilitation would cer-

tainly increase once the world knows that APEC has been making significant efforts to pro-






mote trade facilitation.

Appendix I, Table 3 of the Prince Analysis shows that this option is politically feasible.

However, this option is less politically feasible than option 1. APEC members would have to

come up with additional resources, in order to establish a working group. The number of

meetings for APEC members would also increase. There already exist complaints about the

large number of APEC meetings. Thus APEC members might not be extremely enthusiastic

about creating a working group on trade facilitation.

However, the support for strengthening APEC's work on trade facilitation is gaining

momentum. APEC Economic Leaders have stated the importance of trade facilitation, as has

been described earlier. Scholars, such as Woo (2000), have also expressed their support for

APEC's work on trade facilitation. In addition, APEC's work on trade liberalization has not

been as successful as trade facilitation. After the failure of EVSL, there has not been any

major effort to liberalize trade by APEC. There is still more room for APEC to grow in the

area of trade facilitation. Thus the possibility for APEC members to support the creation of a

working group on trade facilitation still exists. However, this option is less politically feasi-

ble than option 1.

3. Option 3: Persuade WTO to Adopt APEC's Principles on Trade Facilitation.

The third possible option for APEC is to persuade WTO to adopt APEC's Principles on

Trade Facilitation. Appendix I, Table 4 of the Prince Analysis indicates that this option is less

feasible than options 1 and 2, but it is still possible that WTO could in the future adopt

APEC's Principles on Trade Facilitation.

The idea of producing WTO principles for trade facilitation is not new to WTO. As a

matter of fact, Canada has raised this idea in the WTO. Canada believes that trade facilitation

principles provide a framework for developing rules on customs administration and other

border procedures (WTO 2000a).

Since Canada has already brought up this idea in the WTO, APEC members that are

also members of WTO could collectively request WTO's CTG to inquire about the possibility

of adopting APEC's Principles on Trade Facilitation. The main reason why APEC members

might be reluctant to accept this option could be that it would be extremely hard to persuade

WTO members to adopt APEC's Principles on Trade Facilitation, as WTO has many mem-

bers. However, APEC's Principles on Trade Facilitation has been developed. Thus it could

serve as a model for developing WTO's principles. APEC should still try to inquire if WTO

would be interested in seeking assistance from APEC. This is another excellent opportunity

for APEC to show that it is serious about cooperating with WTO.

4. Option 4: Develop rules on customs procedures in APEC and seek WTO's acceptance.

Another option calls on APEC to develop rules on trade facilitation emphasizing cus-

toms procedures. Once this task is completed, APEC could seek the acceptance of the rules

by WTO members. This case would follow the similar path that the Information Technology

Agreement (ITA) has taken. One of the reasons for the success of the ITA is that it only

focuses on one sector. According to Petri, APEC members have also recognized that the sec-

tor could enhance economic development (Petri 1999). Thus APEC members have been will-

ing to accept ITA. In the case of the Early Voluntary Sectoral Liberalization (EVSL) initia-

tive, the inclusion of multiple sectors is a major problem. The reason is that the large number

of sectors makes negotiations difficult to accomplish. In the end the EVSL has resulted in

failure.

From the cases of ITA and EVSL, we can see that success largely depends on simplicity

and acceptance. Therefore, this option focuses on the development of rules on customs pro-

cedures. Simplicity is achieved through the focus only on rules on customs procedures and

no other areas. The objective of developing rules on customs procedures is to facilitate trade

with simplified customs procedures. When APEC and WTO members discuss about the sub-

ject of trade facilitation, they focus their discussions on ways to simplify customs proce-

dures. Thus the major APEC members might also be supportive of this option because they

are important trading economies.

Appendix I, Table 5 of the Prince Analysis indicates that the political feasibility of this

option is low. The problem with this option is that the failure of EVSL has dampened any

enthusiasm for large-scale negotiations in APEC. At this moment, members of APEC would

most likely not want to spend tremendous amount of time and resources needed to negotiate

with each other. The reason is that most APEC members are suffering from bad economic

conditions. In the case of WTO, there exist both supporters and opponents of rules on trade






facilitation. Some WTO members have stated that new rules are beneficial while others do

not think so (WTO 1999). Therefore, it would take tremendous amount of work to persuade

APEC members to accept this option.

5. Recommendations

The evaluation of the policy options shows that the degree of political feasibility of the

various options varies. We can rank the options in terms of the degree of political feasibility.

This means the easier it is to get APEC members to accept the option, the higher the ranking

of the option. The results are presented here. Option 1 is ranked number one. Number two

spot goes to Option 2. Option 3 is ranked number three. Finally, the last place goes to Option

4.

However, if we rank the options in terms of potential gains in prestige for APEC, the

rankings become reverse with Option 4 receiving first place. The major characteristic of the

four options is that the harder the implementation process, the larger the gains in prestige for

APEC. For example, if APEC is able to implement Option 4 by getting APEC to develop

rules on customs procedures and seek their acceptance in WTO, APEC would certainly be

praised just like the case of ITA.

We can now proceed to make recommendation on the options APEC should adopt,

based on the above information. This report highly recommends that APEC should accept the

four options, because they would enable APEC to assist WTO in promoting trade facilitation.

The analysis also shows that the four options are politically feasible, although at different

degrees of feasibility. It is worth trying to see if APEC members would accept options with

lower scores in political feasibility, since they tend to have larger gains in prestige for APEC.

For example, Option 4 is also recommended because of the huge gains in prestige for APEC

if implemented. The stating of the recommendation is the easy part. The hard part is to per-

suade APEC members to implement the options.

A few suggestions for getting APEC members to accept the implementation of the

options are presented here. First, it would be necessary to inquire APEC members that have

been active in promoting trade facilitation about their views regarding the four options.

These APEC members are Australia, Canada, Japan and U.S. Specifically, participants of

these APEC economies in CTI should be approached to request their views on the four

options. CTI has been coordinating APEC's work on TILF. In addition, participants from the

above stated economies in the Sub-Committee on Customs Procedures (SCCP) should also

be asked for their opinions.

If the responses from Australia, Canada, Japan and U.S. are good, the next step to take

is to form an initial group of these economies including Chinese Taipei. The work of the

group is to generate acceptance of the options. The group approach is suggested because it

shows that the options do have supporters. It is absolutely necessary to seek the acceptance

of Options 3 and 4 through the group approach because these two options are extremely diffi-

cult to gain approval. In the case of Options 1 and 2, it is possible for Chinese Taipei to ini-

tially work alone because they are highly politically feasible. However, the group approach is

still suggested to make the task easier. APEC's work on trade facilitation has produced good

results. The time is right to let the world know about APEC's accomplishments in trade facili-

tation.






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Petri, Peter A. 1999.“APEC and the Millenium Round.” Paper prepared for the 25th PAF-

TAD meeting, Osaka, Japan, June 16-18, 1999.

Woo, Yuen Pau. 2000.“Wew Directions for APEC's Trade Facilitation Agenda.” Speech to

the 15th Pacific Economic Community Seminar organized by CTPECC and held in

Chinese Taipei.

WTO. 1996.“Tingapore Ministerial Declaration (WT/MIN(96)/DEC).” Geneva: WTO

WTO. 1999. “Trade Facilitation: Status Report by the Council for Trade in Goods

(G/L/333).” Geneva: WTO.

WTO. 2000.“Council for Trade in Goods: Chairman's Progress Report (2000) on Trade

Facilitation (G/L/425).” Geneva: WTO.

WTO. 2000a.“Trade Facilitation: Canada's National Experience (G/C/W/238).” Geneva:

WTO.

WTO. 2000b.“Proposal for Future Work on Trade Facilitation: Communication from Japan

(G/C/W/215).” Geneva: WTO.

WTO. 2002.“Doha WTO Ministerial 2001: Ministerial Declaration.” Geneva: WTO.

Available at <http://www.wto.org>






APPENDIX I

Introduction to Prince Analysis

A method for analyzing the political feasibility of various policies is Prince Analysis.

The Prince Analysis is used to analyze information whereby two or more actors are involved

in decision-making. The system enables users to determine the status of a decision in the

process of being made or rejected. It allows analysts to predict the likelihood of acceptance

of a decision (Coplin and O'Leary 1983).

The first step is to estimate the issue position of each actor. The issue position is the

attitude of the actor toward the policy. The second step is to estimate the power of the actor.

The degree to which the actor can exert influence in a direct or indirect manner for support-

ing or opposing the policy relative to all other actors is the meaning of power. The third step

is to estimate the salience of the policy. Salience is defined as the importance of the policy

for the actor (Coplin and O'Leary 1983).

Table 1

Prince Analysis Scoring System

Issue Position Power Salience

3 Strong Support 3 Strong Power 3 High Salience

2 Moderate Support 2 Moderate Power 2 Moderate Salience

1 Weak Support 1 Weak Power 1 Weak Salience

0 Neutrality

-1 Weak Opposition

-2 Moderate Opposition

-3 Strong Opposition

Source: Coplin and O'Leary (1983).

Table 2

Option 1: Enhance Cooperation Between APEC's CTI and WTO's Council for Trade in

Goods on Trade Facilitation.

Political Actors Issue Position Power Salience

ASEAN 3 x 3 x 2 =18

Australia 3 x 2 x 3 =18

Canada 3 x 1 x 3 =9

China 3 x 1 x 2 =6

Japan 3 x 2 x 3 =18

Chinese

Taipei 3 x 1 x 2 =6

U.S. 3 x 3 x 3 =27

Total =102

Table 3

Option 2: Create an APEC Working Group on Trade Facilitation.


ASEAN 2 x 3 x 1 =6


Canada 2 x 1 x 2 =4

China 2 x 1 x 1 =2

Japan 2 x 2 x 2 =8

Chinese

Taipei 2 x 1 x 1 =2

U.S. 2 x 3 x 2 =12

Total =42






Table 4

Option 3: Persuade WTO to Adopt APEC's Principles on Trade Facilitation.


ASEAN 1 x 3 x 1 =3


Canada 3 x 1 x 3 =9

China 1 x 1 x 1 =1

Japan 1 x 2 x 2 =4

Chinese

Taipei 1 x 1 x 1 =1

U.S. 2 x 3 x 2 =12

Total =38

Table 5

Option 4: Develop rules on customs procedures in APEC and seek WTO's acceptance.


ASEAN 1 x 3 x 1 =3


Canada 1 x 1 x 1 =1

China 1 x 1 x 1 =1

Japan 1 x 2 x 1 =2

Chinese

Taipei 1 x 1 x 1 =1

U.S. 1 x 3 x 1 =3

Total =13

an analysis of options to enhance apec and wto's ...this is the reason why apec has indicated...

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