The challenge is to cut social costs

This is the text, lightly edited, of the leaders' declaration issued at the conclusion of the Apec summit in Auckland yesterday.



We the economic leaders of Apec celebrate here in Auckland 10 years of unprecedented cooperation in pursuit of a vision of stability, security and prosperity for our peoples. We shall continue to exercise leadership to reach our goals and to meet the challenge we have set ourselves.

We welcome the improved performance and prospects of our economies since we last met, and commend the actions taken to reform those economies affected by the crisis. The cooperative growth strategy we adopted in Kuala Lumpur, and sound macroeconomic policies in key economies, have supported the restoration of confidence and growth and have allowed us to share growing confidence about our prospects.

We are not complacent about the risks that might impede recovery and sustainable growth and we will sustain the momentum for reform. As leaders, we accept responsibility for resisting protectionism, opening markets further, and addressing structural and regulatory weaknesses that contributed to the economic downturn from 1997.

We will achieve this through regulatory reform and enhanced competition and by improving the international framework governing trade and investment flows. To this end we commit to the launch of a new round of negotiations in the World Trade Organisation.

All people in our communities have a stake in the success of Apec. We want to ensure they achieve their full potential for improved economic and social well-being. We particularly welcome the more active participation of women and business in Apec's work this year.

Improved competitiveness through ongoing reform is the road to recovery and sustainable growth. Through Apec, we seek to expand opportunities for business and employment growth, build strong and open markets and ensure that our communities and economies can participate successfully in the international economy.

Open, transparent and well-governed markets, both domestic and international, are the essential foundation of prosperity and enable enterprises to innovate and create wealth.

We will strengthen markets by providing greater transparency and predictability in corporate and public-sector governance, enhancing competition, improving regulation, reducing compliance costs and building a favourable regional and international environment for free and fair competition.

In reconfirming our commitment to achieve the Bogor goals of free and open trade and investment by 2010 and 2020, we endorse the Apec principles to enhance competition and regulatory reform.

We accept ministers' proposals for an initial work programme to strengthen markets. This gives priority to strengthening infrastructure and human capacity in our economies and enterprises, especially in developing economies. It also calls for specific implementation strategies in areas such as natural gas and e-commerce. We call upon the private sector, including the Apec business advisory council and the Apec financiers' group, to contribute to these efforts.

We endorse the work of our finance ministers to strengthen domestic financial markets and to secure the foundation for the return of capital to the region by enhanced supervision of financial markets, improved training of supervisors and regulators; developing domestic bond markets and applying agreed corporate governance principles. We look forward to receiving a report from finance ministers of further progress in dealing with financial market issues when we next meet.

We reaffirm that individual actions by economies are the principal means by which Apec's goal will be attained. We acknowledge that progress towards the Bogor goals has been uneven, and undertake to continue concrete actions to fulfil our commitment.

We also accept the views of the Apec business advisory council and other business representatives who have called for action plans to be more specific, transparent and comprehensive and welcome the initiative by ministers to review and strengthen processes for individual and collective actions under the Osaka action agenda.

Apec's trade facilitation programmes are already delivering substantial benefits - in customs harmonisation, standards and conformance and increased mobility of businesspeople. We welcome the agreed new initiatives and instruct ministers to give priority to this work next year, in consultation with business, and to better communicate the value of Apec's trade facilitation role.

Enhanced economic and technical cooperation is essential if we are to lift our peoples into prosperity and narrow the development gap among Asia-Pacific economies.

The financial crisis has underlined the importance of cooperation in human and institutional capacity-building, science and technology exchanges and development of infrastructure. We direct our ministers to give special attention in the coming year to improving effective and coordinated delivery of Apec's ecotech and capacity-building programmes, in accordance with the Manila declaration.

We welcome the ministers' report on the Apec food system proposed by the business advisory council and endorse its recommendations on the development of rural infrastructure, dissemination of technological advances in food production and processing and promotion of trade in food products.

A robust regional food system that efficiently links food production, food processing and consumption is a vital contribution to meeting the objectives of Apec. We instruct ministers to implement the recommendations and monitor progress.

We recognise the key role that electronic commerce will play in linking our economies. Apec must continue its efforts to create a favourable environment for e-commerce in cooperation with the private sector.

In a little over 100 days, Apec economies will face the century date change. Intense activities in economies and throughout the region have lessened risks but more cooperative planning must occur.

We recognise we must continue to prepare, accelerate cross-border contingency planning and enhance transparency. We adopt the Apec Y2K 100 days cooperation initiative to intensify cooperation for responding to potential Y2K events. We agree to share information and expertise about Y2K impacts on critical infrastructures during and after the date change.

Apec will continue to play a leadership role in strengthening the global economy, especially the multilateral trading system. Strong financial systems are fundamental to achieving robust, open and growing economies. We welcome the report from our finance ministers on developments in strengthening the international finance architecture and are encouraged by the progress made.

The establishment of the financial stability forum and the new informal mechanism to enhance dialogue among the systematically important economies should advance cooperation on strengthening the international financial system.

We support ongoing efforts to improve crisis prevention and resolution and urge prompt action to improve transparency of highly leveraged institutions. We also support the developing consensus on the need to ensure that reforms of the international financial system, and domestic financial markets, are mutually reinforcing.

Apec's diverse membership provides a special contribution to discussions on domestic and international financial reforms. In both the public and private sectors Apec advocates greater transparency and openness including improved reliability and timeliness of information and clearer accountability for decisions and judgments.

This year, Apec has a unique opportunity to give impetus to deliberations in the World Trade Organisation. We will give the strongest possible support at Seattle to the launch of a new round of multilateral negotiations and recognise the need to build public confidence in them.

In particular, we agree that the new round should include comprehensive market access negotiations covering industrial tariffs in addition to the already mandated negotiations on services and agriculture; lead to timely and effective improvements in market access to the benefit of all participating economies, particularly developing economies; and provide scope to review and strengthen rules and disciplines.

We agree the round should have a balanced and sufficiently broad-based agenda and be concluded within three years as a single package which does not preclude the possibility of early provisional results. We support, as one of the important objectives of the negotiations on agriculture, the abolition of agricultural export subsidies and unjustifiable export prohibitions and restrictions.

We call on all WTO members to join us at Seattle in a commitment not to impose new or more restrictive trade measures for the duration of the negotiations, as applied during the Uruguay round. We pledge not to impose any such measures before the Seattle WTO ministerial meeting. Support for ongoing WTO negotiations will remain a key area of Apec's work throughout those negotiations. We resolve to ensure that Apec and WTO are mutually reinforcing.

In order to achieve universality of membership, we also seek early progress in the accession negotiations to the WTO, including for those Apec economies that are not yet WTO members. We issue a strong call for these accession negotiations to be concluded at the earliest opportunity, if possible before the new WTO negotiations begin.

As leaders, we recognise our responsibilities to ensure full and successful participation by all of our populations in the modern economy. Technological change has irreversibly integrated global markets for goods and services and finance.

The effective development and application of knowledge will be a key driver of future economic success and we pledge to ensure that Apec economies are to the forefront of building and sharing their expertise in this vital sector. Cooperation in such fields as e-education, science and technology and lifelong skills development should be strengthened. Globalisation must become an opportunity for all.

We are committed to ensuring that Apec takes a leading role in enabling developing economies to participate successfully in the global economy, through enhancing human and institutional capacities and progressively opening markets.

We recognise that income and wealth disparities between and within economies can pose a challenge for social stability. Appropriate social safety nets play a role in facilitating economic and social adjustment. We welcome efforts by Apec economies, and other institutions, to address social safety net issues and to encourage further efforts to maintain employment and environmentally sustainable growth.

We welcome the framework for the integration of women in Apec, which is a significant step to enhance the ability of women to contribute to and benefit from prosperity of the region. We shall review implementation of the framework when we next meet.

In 1999, we have enhanced opportunities for business, especially smaller enterprises, to make their views known in Apec. Those views are of keen interest to us. Further dialogue with the private sector, at all levels, is essential to maintain the dynamism and relevance of Apec. We also look to the private sector for support for reform.

We instruct ministers to take the Apec business advisory council recommendations into account during their work in 2000. We support implementation of the eight steps for more competitive air services and the identification of further steps to liberalise air services in accordance with the Bogor goals. Tourism and air services have a large contribution to make to development and community-building in the region.

In conclusion, we recognise that our role in Apec, as in our own economies, is to set the course which will allow for sustainable development and which will deliver a strong social dividend to our populations.

We acknowledge that economic adjustments may be difficult and that there is social cost which must be reduced. But we are united in our belief that the path to increased prosperity requires continual reform and adjustment of our policies and outlook. An open regional framework, within which competition and cooperation flourish, is the best means of building a prosperous future together.

We embark on Apec's second decade confident that a deepening and enduring spirit of openness, partnership and community is being built. The challenge we collectively face is to maintain our momentum and deliver on our commitment. We accept the challenge.