security paper - APEC Meeting Document Database

[pic] 2004/AMM/002
Agenda Item: V.4
Study on the Mutually Supportive Advancement of APEC's Trade Facilitation
and Secure Trade Goals Post September 11 Purpose: Information Submitted by: Malaysia |[pic] | |
| | |
| |16th APEC Ministerial Meeting |
| |Santiago, Chile |
| |17-18 November 2004 |
| | |
Executive Summary In Shanghai in 2001, shortly after the terrorist attacks of
September 11, APEC Leaders set the region on a determined course:
to step up the facilitation of international trade by both cutting
transactions costs in concrete terms for business and making trade
more secure. These twin goals presented a challenge for APEC. It raised the
concern that new measures to boost security would add to
transactions costs and that within APEC's diverse membership not
all economies would be capable of improving trade facilitation in
this new environment. The costs of terrorism to business and the economy are potentially
high. There is the direct cost from the impact of a terrorist
attack on life and property. The indirect costs can also weigh
heavily when business acts on the perceived risk of terrorism and
the results are amplified through the trading system. Governments, reacting to this situation, run the risk of imposing
high costs on the trading system: in a direct way through charges
and indirectly through delays to shipments. The solution to both making trade more secure and minimizing the
direct and indirect costs of terrorism lies in the effective use of
technology and in domestic and international cooperation and
coordination. These measures provide the same solution for cutting
transactions costs and for facilitating international trade more
efficiently. APEC already has a wide range of measures underway to meet these
challenges including its work on paperless trading. New
initiatives, utilizing state of the art technologies and new
systems, are being launched to make trade more secure. These are
becoming more widespread throughout the APEC region. Case studies
and other evidence shows that there are adjustment and set-up costs
for business and governments but that these measures are and can be
embraced to reduce transactions costs through the supply chain. APEC is working on building capacity in governments, especially in
developing economies, and with business to ensure that an inclusive
approach is adopted. APEC is well suited to facilitate the necessary international
cooperation and coordination. Many of the officials which find
themselves at the centre of these challenges have been working
together for many years in APEC working groups. They have
developed a culture of cooperation and an understanding of how
developed and developing economies can cooperate effectively. APEC can work at several levels to build capacity and enhance
domestic and international cooperation: . Continue work on APEC's flagship project, the STAR
initiative. . Develop principles of good regulation . Build capacity for better governance . Promote strong technical capacity building . Develop effective evaluation systems . Cooperate and build partnerships with business . Understand business's supply chain perspective APEC's future work program and cooperation to reduce transactions
costs with more secure trade should be undertaken within a
framework of principles. APEC's own Facilitation Principles
provide an ideal basis for the next steps. Study on the Mutually Supportive Advancement of APEC'S Trade
Facilitation and Secure Trade Goals post September 11 Analysis and Case Studies prepared for APEC by the Pacific Economic
Cooperation Council August 2004 Table of Contents Part I: Analysis of the Issues and Next Steps 4 Introduction 5 Background on the facilitation goals in APEC 6 Impact of terrorist threat 7 Technological change and improved procedures already underway 11 Government mandated actions 12 Adjustment strategies: results of case studies 15 Deepening international cooperation and coordination: further
steps 18 Conclusion: importance of facilitation principles 21 References 23 Appendix 1: The STAR Initiative 25 Appendix 2: APEC meetings on Security 27 Part II: Case Studies 30 1. Maritime Counter-terrorism Measures in Port Facilities:
The Case of Sydney Ports 31 1.1 Background 31 1.2 Sydney Ports 32 1.3 Maritime Security Measures in Australian Port Facilities 34 1.4 Concluding Remarks 36 References 36 2. The Singapore Report on Implementation of Cargo
Security Measures 38 2.1 Introduction 38 2.2 Security Measures 38 2.3 Capacity Building 41 2.4 The Cost of Implementing the CSI scheme 42 References 42 3. Security and Supply Chain Management: Thailand Case Study 44 3.1 Introduction 44 3.2 Adjusting to Security Requirements 44 3.3. Effects 45 3.4 The APEC STAR-BEST project 47 4. The Effect of the Bioterrorism Act on Exporters' Logistics
Costs:
The Case of Chilean Salmon 49 4.1 Introduction 49 4.2 The Logistics of Salmon Exports 51 4.3 Impact of the Prior Notice Requirement 51 4.4 The Effect of Section 303 52 4.5 The Effect of Section 306 53 4.6 Conclusions 54 5. The New Security Environment and its Impact on Trade in
Manufactured Goods: A Canadian Case Study 56 5.1 Introduction 56 5.2 Supply chain for exports to the US before September 11, 2001 56 5.3 New supply chain for exports 57 5.4 Cost and benefits of new initiatives 59 6. The Impacts of 9/11 on Supply Chain Management: The Case of
Two Manufacturing Firms in the Philippines 60 6.1 Introduction 60 6.2 Yazaki-Torres Manufacturing, Inc. 60 6.3 Philbest Canning Corporation 65 6.4 Conclusion 70 Part I: Analysis of the Issues and Next Steps
Paper prepared by members of the Pacific Economic Cooperation
Council network[1]
Introduction APEC Leaders in Shanghai in late October 2001 agreed to work on
concrete measures to cut transactions costs in international trade
by 5 percent across the region by the end of 2006. When making
their commitment, the Leaders reiterated aspects of the Osaka
Action Agenda by observing the importance of taking into account
the diversity among the members and the value of capacity building
programs. Their statement is also significant because of their
reference to working 'in close partnership with the private
sector'. These ambitions were widely welcomed. At the same time,
APEC members were facing new challenges with respect to their trade
facilitation agenda as they also sought to achieve higher levels of
security in the trading system, following the experience of the
events of September 11, 2001. As the security-driven agenda
developed in the following years, some economies expressed concern
about whether the goals of the security agenda would conflict with
those of the trade facilitation agenda. The purpose of this study is to respond to this concern by
undertaking the following tasks:
1. examine the impact of the recent spate of terrorist acts on
APEC's Trade Facilitation goal of achieving a significant
reduction in transaction costs in the APEC region; 2. consider the range of business and trade related responses
and measures being adopted following terrorist attacks in the
US, Indonesia, the Philippines and elsewhere and how they
will affect transactions costs (either positively or
negatively), including how they can reduce the ongoing cost
of terrorism; 3. consider both the challenges and the opportunities for the
APEC Trade Facilitation Goals associated with the measures
and responses under consideration, including the possibility
for new security-related technologies to drive efficiencies
in trade and border controls, thus reducing transaction
costs; and 4. identify areas for potential international cooperation to
achieve APEC's twin goals of secure trade and trade
facilitation.