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SINGAPORE: Six Asia-Pacific Economic Cooperation (APEC) economies have signed on to an agreement to make customs documentation and clearance matters for businesses easier.
They are Singapore, Australia, New Zealand, the United States, Canada and South Korea. The move is expected to benefit small and medium enterprises (SMEs) the most.
Revealing this at a news conference on Monday, the Chairperson of the APEC Committee on Trade and Investment, Elizabeth Chelliah, noted there now exists 42 free trade agreements (FTAs) among the 21 APEC economies.
She said the key to boosting trade during these difficult times is to continue building trusted relationships. She added that customs procedures which businesses must submit before they receive preferential tariff treatment could sometimes be irksome, tedious and expensive.
"In terms of behind the border, businesses have been constantly telling us that with all the FTAs in place, actually tariff barriers at the border are coming down, tariffs are lower and market access is a bit easier," Ms Chelliah said.
"But they have told us that once they enter the market, they find it very hard to do business because it is still very complicated to get the necessary licences, the permits... and sometimes they don't understand the domestic regulations involved.
"Because of this, we have launched an ease of doing business work-plan. We are looking at how to improve investment facilitation into the APEC regions, so that in times of such crisis, we would still be able to get a huge amount of foreign FDI into this region.
"We are still seen as competitive and attractive and in doing this, we have to make sure that our regulations are simple, easy to understand and easy to use.
"So we have been seeing how to simplify this, make it easier, make it cheaper so that at the end of the day, even the existing 42 FTAs will have increased utilisation rate and that would already be a boost, especially during this time of economic crisis when everyone is looking for a cheaper (alternative) to get business going.
"That has seen a lot of success this year, especially for Singapore. We have an FTA with almost everyone in this region, but different authorities have different customs requirements and so we try and see how we can harmonise so that the trader knows that no matter where he is going to export, there is just one standard set of documents and criteria that you need.
"And that will also make life much easier for the business community, especially the SMEs which do not have the large resources within the office to look at customs issues which the MNCs have."
One such outcome is the launch of the self-certification pathfinder. Under this system, the trader himself can now certify that the goods to be exported have met the rules of origin criteria.
APEC economies also hope that by 2011, there would be a timeline to work towards the vision of a free trade area of the Asia Pacific. For this, APEC is studying several models of FTAs where regional groupings have come together, such as the FTA which ASEAN has with Australia and New Zealand.
"One of the things that we are looking into is whether there is a ready made FTA outside which the APEC economies are already part (of)... for which we may then deem to be the mother-ship, for which once we are ready to say that we want to do an FTA for the Asia-Pacific, then we can say that is the vehicle," explained Ms Chelliah.
"But the economies are still in the analytical mode, so this year we have done three work streams to help us understand the issues better. Do we have an enlargement process like how the EU was expanding? Do we have a ready made FTA for which our economies can dock on to? (Are there two) big enough FTAs that we can merge together to form one big free trade area?"
A key aspect being explored in the study is which areas the economies were close together and where they diverge.
Meanwhile, senior officials from the 21 member economies wrapped up their discussions on Monday afternoon, in preparation for several ministerial meetings to be held in the next few days.
APEC's leaders will meet in Singapore on Saturday and Sunday.
- CNA/yb
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