One of APEC’s more underappreciated assets is that it is one of the world’s pre-eminent institutions for business-government collaboration on a variety of economic issues that arise because of rapid economic integration.
The issues affecting an integrated world economy are more complex than one where we were simply trading goods with each other. Governments have a stake in encouraging investment, and fostering policies that promote integration is a critical element in attracting investment. The certainty, transparency, and consistency of regulation is a critical factor in determining how successfully an economy can attract investment. By promoting open business-government collaboration on economic regulation, APEC is helping its governments realize the benefits of integration.
Governments need to set national standards tailored to each country’s structure of government and approach to regulation. However, each APEC economy has much to learn from the experiences of other countries. As APEC economies become ever-more integrated through complex supply chains, free trade relationships, and growing trade and investment, there is a strong case for governments to continue to examine their regulatory structures and adapt them to meet the dynamic of global commerce.
The benefits that flow from such “active learning” by economies are substantial. As long ago as 2003, the World Bank estimated that if the APEC economies with below average indicators for trade regulation increased their performance half way to the APEC average, it would increase intra-APEC trade by $254 billion, or one-fifth of intra-APEC trade. Attending to the nitty-gritty effort of reducing administrative costs of doing business, eliminating duplicative regulatory steps or liberalizing standards which diverge from accepted regional practice can boost trade, facilitate investment, and thereby promote higher value jobs in APEC’s developing economies.
The trick in capturing the potential benefit of greater efficiency in regulation is balancing the legitimate interests motivating government policy with the goal of incentivizing businesses towards greater trade and investment. One of APEC’s principal advantages in addressing this balancing act is that it has created numerous examples where business, academics and professionals, and governments have sat side by side to share experiences in tackling regulatory problems, and developed important guidance that helps governments frame better policy.
Take, for example, food safety. Food trade within APEC is rising rapidly, a function of rising incomes, urbanization and growing demand for more sophisticated, often foreign, foods. Increased trade creates new opportunities for agriculture. But ensuring food trade is safe is a critical element in maintaining consumers’ trust. Both business and government have a stake in ensuring confidence in food safety in an environment of increased trade. For APEC’s developing economies, in particular, these issues are important; accessing higher value markets for food is important in raising living standards for rural populations.
APEC has created an innovative way to address the potential tension between food safety standards and economies’ interests in promoting trade. Bringing together government regulators, scientific researchers and food industry quality and safety experts, APEC has developed a long term curriculum to train food safety officials on food safety analytical techniques, risk assessment methods and incident response protocols. This collaboration will help increase the ability of developing economies in APEC to properly surveil their food supply; it promotes the wider adoption of private standards, such as Good Agricultural and Good Manufacturing Practices (GAPs and GMPs) to help meet performance requirements of regulations in other markets; and it promotes information exchange between government and the private sector which can help increase trust in the food supply.
Another good example of public-private collaboration is in the field of information technology. In 2005 APEC Leaders adopted the APEC Privacy Framework to set out common approaches to managing the complex challenge of safeguarding consumers’ legitimate interests in protecting their personal data in an environment of rapidly growing cross border data flows. Since the adoption of the Framework, government and private sector experts have cooperated on a series of projects to implement the Framework. Included in this work are areas where the private sector has taken the lead in developing and educating governments on optimal approaches, in particular in the diverse ways businesses can and do contract with each other to protect private information in business transactions, and how technological innovation is changing to enable better standards of protection.
These examples are not headline-grabbing, high level political commitments. But they represent real examples where APEC is tackling major issues thrown up by the rapid integration of our economies. They represent a shift in how governments address economic competitiveness questions. APEC’s advantage, in promoting business collaboration side by side with government, helps ensure a more informed and consisted approach to addressing regulatory issues, to everyone’s benefit. Getting the process of consultation right is key to getting the result right - ensuring that APEC economies realize open trade’s potential benefits.
This article was originally published in the special annual APEC Summit 2012 edition. Published with permission.
This article was originally published in the CAT Company's special annual APEC Summit 2012 edition. Published with permission.
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In Defense of Public-Private Collaborations
August 31, 2012
One of APEC’s more underappreciated assets is that it is one of the world’s pre-eminent institutions for business-government collaboration on a variety of economic issues that arise because of rapid economic integration.
The issues affecting an integrated world economy are more complex than one where we were simply trading goods with each other. Governments have a stake in encouraging investment, and fostering policies that promote integration is a critical element in attracting investment. The certainty, transparency, and consistency of regulation is a critical factor in determining how successfully an economy can attract investment. By promoting open business-government collaboration on economic regulation, APEC is helping its governments realize the benefits of integration.
Governments need to set national standards tailored to each country’s structure of government and approach to regulation. However, each APEC economy has much to learn from the experiences of other countries. As APEC economies become ever-more integrated through complex supply chains, free trade relationships, and growing trade and investment, there is a strong case for governments to continue to examine their regulatory structures and adapt them to meet the dynamic of global commerce.
The benefits that flow from such “active learning” by economies are substantial. As long ago as 2003, the World Bank estimated that if the APEC economies with below average indicators for trade regulation increased their performance half way to the APEC average, it would increase intra-APEC trade by $254 billion, or one-fifth of intra-APEC trade. Attending to the nitty-gritty effort of reducing administrative costs of doing business, eliminating duplicative regulatory steps or liberalizing standards which diverge from accepted regional practice can boost trade, facilitate investment, and thereby promote higher value jobs in APEC’s developing economies.
The trick in capturing the potential benefit of greater efficiency in regulation is balancing the legitimate interests motivating government policy with the goal of incentivizing businesses towards greater trade and investment. One of APEC’s principal advantages in addressing this balancing act is that it has created numerous examples where business, academics and professionals, and governments have sat side by side to share experiences in tackling regulatory problems, and developed important guidance that helps governments frame better policy.
Take, for example, food safety. Food trade within APEC is rising rapidly, a function of rising incomes, urbanization and growing demand for more sophisticated, often foreign, foods. Increased trade creates new opportunities for agriculture. But ensuring food trade is safe is a critical element in maintaining consumers’ trust. Both business and government have a stake in ensuring confidence in food safety in an environment of increased trade. For APEC’s developing economies, in particular, these issues are important; accessing higher value markets for food is important in raising living standards for rural populations.
APEC has created an innovative way to address the potential tension between food safety standards and economies’ interests in promoting trade. Bringing together government regulators, scientific researchers and food industry quality and safety experts, APEC has developed a long term curriculum to train food safety officials on food safety analytical techniques, risk assessment methods and incident response protocols. This collaboration will help increase the ability of developing economies in APEC to properly surveil their food supply; it promotes the wider adoption of private standards, such as Good Agricultural and Good Manufacturing Practices (GAPs and GMPs) to help meet performance requirements of regulations in other markets; and it promotes information exchange between government and the private sector which can help increase trust in the food supply.
Another good example of public-private collaboration is in the field of information technology. In 2005 APEC Leaders adopted the APEC Privacy Framework to set out common approaches to managing the complex challenge of safeguarding consumers’ legitimate interests in protecting their personal data in an environment of rapidly growing cross border data flows. Since the adoption of the Framework, government and private sector experts have cooperated on a series of projects to implement the Framework. Included in this work are areas where the private sector has taken the lead in developing and educating governments on optimal approaches, in particular in the diverse ways businesses can and do contract with each other to protect private information in business transactions, and how technological innovation is changing to enable better standards of protection.
These examples are not headline-grabbing, high level political commitments. But they represent real examples where APEC is tackling major issues thrown up by the rapid integration of our economies. They represent a shift in how governments address economic competitiveness questions. APEC’s advantage, in promoting business collaboration side by side with government, helps ensure a more informed and consisted approach to addressing regulatory issues, to everyone’s benefit. Getting the process of consultation right is key to getting the result right - ensuring that APEC economies realize open trade’s potential benefits.
This article was originally published in the special annual APEC Summit 2012 edition. Published with permission.
This article was originally published in the CAT Company's special annual APEC Summit 2012 edition. Published with permission.
