APEC Leaders Agree to Reduce Tariffs on Green Goods

At a time when legions of wage-earners are “losing their shirts” in a teetering world economy, President Barack Obama opted to forego ceremonial Aloha shirts for the traditional group photo at the annual Asia-Pacific Economic Cooperation (APEC) Leaders Forum he hosted last weekend in Honolulu. 

The group of 21 world rulers – who had previously “clicked” in silk tangzhuang jackets in China; long, flowing hanboks in South Korea; ponchos in Peru; and sailing jackets in New Zealand – were “all business” in attire at this year’s shoot, reflecting the mounting concerns of the moment.

However, by the time they faced the cameras, the group of government leaders had some reasons to feel relieved:  The meeting ended on an auspicious note that augured more open trade in the region at a time of significant risk from the European debt crisis.

Following a meeting with President Hu of China – among several one-on-ones and group discussions with his counterparts in the region – Obama noted that cooperation between two of the world’s largest countries and principal economies was vital not only to the security and prosperity of Americans, but also critical to the world community.

“Such cooperation is particularly important to the Asia-Pacific region,” said Obama, “where both China and the United States are extraordinarily active.  We are both Pacific powers.  And I think many countries in the region look to a constructive relationship between the United States and China as a basis for continued growth and prosperity.”

Echoing the same message he has made at every stop during the past month, Obama added, “This is where we do most of our trade and where we sell most of our exports. It's also the fastest growing region in the world. And as a consequence, the Asia Pacific region is key to achieving my goal of doubling U.S. exports and creating new jobs.”

Envisioning a  “seamless regional economy,” the group crafted the “Honolulu Declaration” – by which they hope to generate growth and create jobs in three priority areas:  (1) strengthening regional economic integration and expanding trade, (2) promoting green growth, and (3) advancing regulatory convergence and cooperation.

The APEC members agreed to address two key next-generation trade and investment issues facing the region. They committed to help small and medium-sized enterprises grow and better plug into global production chains. They also pledged to promote effective, non-discriminatory and market-driven innovation policies. To advance green growth, they agreed:

• To develop by 2012 a list of goods that contribute to green growth and sustainable development – and to reduce applied tariff rates on the specified goods to 5 percent or less by the end of 2015;
• To eliminate non-tariff barriers, including local content requirements that distort environmental goods and services trade;
• To phase out inefficient fossil fuel subsidies, setting up a reporting mechanism to track progress;
• To  reduce APEC's aggregate energy intensity (a measure of the energy efficiency of a nation's economy) by 45 percent by 2035;
• To take specific steps related to transport, buildings, power grids, jobs, knowledge -sharing, and education in support of energy-smart low-carbon communities, such as the Low-Carbon Model Town and other projects;  and
• To implement appropriate measures to prohibit trade in illegally harvested forest products and undertake additional activities in APEC to combat illegal logging and associated trade.

Members also expressed deep concerns regarding the Doha Development Agenda – the stalled World Trade Organization talks that originally had been intended to facilitate global trade. The talks began in 2001 in Doha, Qatar, and reached an impasse in 2008 over the issue of agricultural tariffs.“Fresh thinking involving innovative approaches is required, including possibilities that involve advancing specific parts of the Doha agenda where consensus might be reached on a provisional or definitive basis,” the APEC members said in their declaration.

Despite what some might have perceived as a sour note, the 21 world leaders closed the forum in relatively high spirits. Prime Minister Julia Gillard of Australia, who has been hammered by her constituents over the carbon tax that is now set to become law and take effect in July 2012, said she was pleased with the meeting’s green agenda. “This is unambiguously good news for Australia,“ Gillard told reporters on Sunday, shortly before leaving Hawaii to fly back to Canberra. “APEC is setting an example to the world on

Finally, while the forum attendees did not wear Aloha shirts in the commemorative photo, each leader received one in his or her “goody bag,” to take home and enjoy. The tradition of wearing colorful local garb was initiated back in 1993, when U.S. President Bill Clinton handed out bomber jackets for leaders to wear in their group photo in the Seattle area. Will Russia return to tradition and hand out babushkas or fur hats at next year’s meeting?