Upcoming APEC Meetings in Shanghai, China

   3:27 P.M. EDT

     MR. GREENWOOD: Thanks, Jeff.

     As Jeff just said, there'll be two meetings next week in Shanghai: the ministerial meeting on the 17th and 18th, and then the leaders' meeting on the 20th and 21st.

     Let me just state very briefly what we hope to see happen and our objectives at these two meetings, and then open it up to questions.

     We have two major objectives. One is to strengthen the coalition for combating terrorism. This will be the first major international meeting after the attacks of September 11th, and it'll be an important opportunity to do that. Secondly, to restore economic confidence both regionally and globally. Obviously even before the attacks, there had been an economic slowdown in the region, and that has been the major focus of the work of APEC for the year. Let me talk a little bit in more detail about those two objectives.

     Going back to counterterrorism. Obviously, this will be an excellent opportunity for the region of Asia Pacific to show that it is, in fact -- that we are working together to combat this problem. The attacks of September 11th obviously were not just an attack on the United States; it was an attack against many, many nations. As you all know, many victims of many nations died and were hurt in those attacks. This is a view which is very widely shared throughout the Asia-Pacific region. There has been an excellent response from the region towards, again, this working together to fight terrorism.

     The region is an important part of what is the broadest, perhaps most important coalition against a common enemy that we've seen in the history of mankind. APEC economies will be fighting this and making a contribution as appropriate to each of those economies, but APEC as an institution can also make a contribution. And what we will be doing in Shanghai will be looking at both of these areas; that is, what APEC economies are doing on their own and together, and cooperation in various other fora, the U.N., the FATF and various institutions working on various aspects of combatting terrorism. And we are also looking at, again, what APEC can do as an institution.

     We are, of course, looking mainly at the economic impact and the economic tools that we have to combat terrorism in this particular group. The Asia-Pacific Economic Cooperation group is obviously an economic policy group, and this is the perspective that we'll be focusing on in the discussions that we're going to have both at the ministerial level as well as at the leaders' level on terrorism.

     The second objective, restoring economic growth in the region. As I said before, this has been a major focus of the work of APEC this year. We have been -- first of all, identified very early on that there was going to be a problem. Virtually every economy in the region will be growing more slowly this year than they did last, some very much so. Others, the difference in growth rates won't be as marked, but still, virtually every economy will be growing more slowly.

     We are looking at a number of ways to respond to that. And so the discussions all year long at the senior officials levels and at ministerial meetings have been held as to, you know, what should we -- how should we respond as a region to this economic slowdown, how can we reverse that slowdown as quickly as possible, and how can we make sure that the economies -- when we come out of that slowdown and start growing again, how can we assure that the economies will come out stronger than ever?

     The response that we have developed over the year will not be a surprise to you. It's going to be to continue the work that APEC has done and to accelerate that work in areas such as market opening, structural reform, putting in place policies that can spur innovation and get growth going again.

     The obvious number-one priority in that is going to be launching the new trade round. And we anticipate that ministers and leaders will call for the launch of that round at the upcoming WTO ministerial meeting.

     In addition, we'll be calling for continued structural reform. We'll be calling for continued use of macroeconomc policies to alleviate the downturn and, hopefully, push us towards -- to get out of this business cycle as quickly as we can.

     One of the areas that we've talked about at great length this year is the policies needed to increase and boost productivity through the application of information technology. The IT was a big issue last year in Brunei. We have continued that work into this year, to build on what the leaders had agreed to last year in the IT area, through something called the E-APEC exercise in APEC.

     And we also have worked very closely with two very talented economists from the International Institute for Economics, Fred Bergsten's institute here, who have worked with us and APEC, in the Economic Committee of APEC, to do an excellent study on exactly the kinds of policy changes we need to promote the application of IT to all economic activity and thereby transform our economies. We've also put together a strategy for how to do that.

     Let me make an advertisement that if -- for those of you who have colleagues or if you yourselves are going to be in Shanghai, that we'll be the results of the work of the E-APEC Task Force in Shanghai at a -- along -- together with our private-sector partners, who have been working with us in this exercise as well, on Saturday the 20th at 12:45, as part of the CEO summit, which will be taking place at the same time. There will be a very snazzy event and multimedia and all kinds of interesting things. So if you're there in Shanghai, please don't miss that.

     Another area that -- in this -- in terms of what we have been talking about this year and how we can move forward is in the area of customs reform. Modernization of customs is a very important area for business. It's -- when we do surveys of business in the region about the problems they face, actually tariffs are not the number-one problem that they identify; customs is the number-one problem that's identified in virtually all the surveys that are done. In many cases, customs results in increases in cost that far exceed the cost of tariffs.

     A group of private-sector companies has been working with the Chinese for the last -- for more than a year now on something called the Shanghai Model Port Project, and that has now been completed. There will be new -- brand-new facilities -- there are brand-new facilities up and running now in Shanghai for air-express cargo customs clearance, all -- a very modern facility, all automated.

     And the customs -- the Chinese customs officials have been trained by the U.S. Customs, and we're very pleased with that particular project. It will be kind of, you know, launched in a sense this next week, and that's an example of the kinds of things that APEC can do improve the business conditions in the region.

     And finally, what APEC has talked about in terms of restoring confidence to the economy in the region is some of the areas of -- well, the foundations that are necessary for long-term, sustained growth over time. And in particular we have identified three areas that the United States in particular is working on very hard in APEC.

     One is education, and we have a number of -- three education projects that we are very pleased to be working with our APEC partners on. It's mainly aimed at improving teacher quality, and by drawing on best practices around the region and incorporating them through Web portals.

     Another one is on language study and how we can use, again, Web- based language tools to improve the way we teach foreign languages.

     The other -- one of -- the other of the two areas is infectious diseases. Combatting infectious diseases is something that the leaders last year in Brunei identified as a priority. We have developed the APEC strategy for doing that, which has focused mainly on networking of CDCs, of disease control centers around the region, so that we can better monitor and surveil the outbreak of infectious diseases, such as HIV-AIDS.

     And then finally, in the area of biotechnology -- this has been an area of -- that we've paid a lot more attention this year in APEC than -- and previously we've had some very good discussions and have agreed to launch a new high-level biotechnology dialogue, which will begin next year.

     So those are some of the highlights of the kinds of things we've been talking about this year and the highlights of what ministers and leaders will be -- at least will be on the agenda. Whenever folks get together in APEC, they also have an opportunity to talk about a variety of other issues, and we'll have that -- again, we'll have that opportunity next week. Obviously, in these times, that's going to be even more critical -- that the kinds of personal networks that APEC has created over the years will be more important than ever.

     Another reason for that is that we actually have a lot of new faces among leaders this year. Obviously, ours is new. One-third of the leaders attending the meetings next week will be -- this will be their first APEC meeting. That, I think, is probably unprecedented in APEC, to have that high a turnover of leaders. And that's, I think, in a sense exciting both in terms of seeing APEC as an ability to network as well as putting, I guess, in some ways, new blood into the APEC institution.

     So the basic line is, you know, we're working together to deal with the challenges before us, both those that have new challenges such as those of terrorism at least have taken on a new profile, obviously, and some of the challenges that we've been working for in years -- for years now in APEC, how to create dynamic, open, competitive economies in the region.

     Let me stop there and open it up to you guys.

     MODERATOR: Okay. Why don't we start right here on this side?

     Q Okay. Xiangshi Li (sp) from China Economic Daily. I guess there might be some bilateral meetings between President Bush and some other leaders. And I believe for that it is also a very important part of the APEC as U.S. takes part in the APEC. And could you share some ideas what kind of specific measures President Bush is going to bring to those bilateral meetings, especially to President Jiang Zemin?

     MR. GREENWOOD: I don't want to -- I can't really talk so much about what the president will say. I mean, I would ask you to direct those questions over to the White House. But let me just kind of give you a general sense of the kinds of messages that I think we'll be wanting to give across the board.

     Obviously the first one will be on terrorism, and first of all, our -- how pleased we are at the response that we've seen throughout the region, including in China, and in also underlining the need to work in a very concrete, in a very specific way on the various aspects. One important aspect, for example, is tracking and cutting off financing for terrorists. And that is something that -- you know, it involves nitty-gritty cooperation at the very -- a very micro level that requires a lot of flexibility both from regulators as well as banks and companies. And it takes a lot of cooperation to do that. Those are the kinds of things that we're going to need to see to make this cooperation more than just words and Rio. And that's -- and we have no reason to expect anything other than that. In fact, everything we're hearing and seeing is, in fact, that these statements of support are, in fact, real and will result in that. The other thing is one message, I think, will be -- one area of interest among many leaders, of course, is the state of the U.S. economy and how quickly we think that we'll be able to get out of this business cycle and start growing in a robust fashion. And so that will be, I'm sure, discussed. And the other message is that we hope -- obviously, we -- you know, the downturn has been -- the attacks of 9/11 have the risk of lengthening the downturn. We think have -- we've put in the right policies and made the -- put in the policies that can restore our confidence quickly that that doesn't necessarily have to be the case and we can move things around quickly. We would hope that next year we'll see, actually, a very good year. And so my guess is that we will be making statements that, you know, we are doing everything we can to get the turnaround fast here, and look forward to the same kinds of policies out in the region.

     MODERATOR: Right here.

     Q (Name inaudible) -- with Power TV of Taiwan. Sir, I have two questions. One, are you concerned that the discussion on counterterrorism is so dominant that it may overshadow the discussion of other issues, because APEC basically is an economic forum? My second question -- do you have any reaction or the reaction of the United States to President Chen Shui-bian's nomination of former vice president -- of vice president Li Len-Hsiu (?) of Taiwan to attend the informal leaders' summit in Shanghai?

     Thank you very much.

     MR. GREENWOOD: On the first question, no, because we have to -- keep in mind that restoring economic confidence to the region is -- obviously it's going to be an extremely valuable contribution in fact to the fight against terrorism. We make no apologies or -- about having the counterterrorism effort be number one, and that is going to be the number one priority. There's no question about that.

     But that doesn't make -- in fact, that makes the economic agenda even more important because, as I mentioned earlier, this was not only an attack against the United States, it was an attack against the entire world. It was also an attack on economic institutions, and the whole effort to create prosperous and dynamic economies. The way that we can -- one important way, obviously, of addressing over time, the terrorism issue, is to make sure that that prosperity continues and is shared as widely as possible. And that's exactly what APEC's role is. And so we consider that role to be extremely important. The president does as well. He could do a lot of different kinds of counterterrorism work all around the world. He's choosing to go to Shanghai to the APEC meeting, and I think that's a good indication that he's keeping his eye on the ball when it comes to both the counterterrorism agenda as well as the economic agenda.

     With regard to Mr. Li (sp) -- is it? -- his selection. I don't know so much about him, and I don't really have any comment to make, other than the -- we welcome a positive and constructive participation of Chinese Taipei and Taiwan in the leaders' meeting as they have done in the past.

     And we have no reason to expect that it's going to be any other way than that.

     MODERATOR: Do you have a question?

     Q Thank you. I'm Gary Yerke (sp) with BNA. You didn't mention your -- the famous Shanghai accord or charter or whatever it's being called.

     MR. GREENWOOD: It's here. I forgot to mention it.

     Q (Laughs.) I wonder if you could bring us up to date on that and whether it's still alive and what we can expect from it.

     MR. GREENWOOD: It is. And in fact, it was on my notes and I overlooked it.

     The other thing that we intend to do -- (laughs) -- in Shanghai is try to reinvigorate APEC as an institution in its effort to achieve the goals we've set for ourselves in APEC, in particular the goal of free trade and investment in the region by the year 2010 for developed and 2020 for developing economies. And the instrument for doing that is the Shanghai Accord.

     The Shanghai Accord does two things, basically. One is that it broadens the vision that we've set for ourselves in APEC to cover some of the areas that we've spent a lot of time working on since the original road map was set out in Indonesia, and the year after in Japan, and in particular in areas such as e-commerce and in areas such as food and agriculture. The other area would be in terms of strengthening of financial markets in the aftermath of the '97-'98 financial crisis. And so it's a broadening of the road map and also a greater emphasis on trade facilitation and how we can turn trade facilitation principles into practice.

     The second goal of the Shanghai Accord is a greater emphasis on implementation, moving from vision to reality, taking the various best practices, principles, the documents that we've prepared over the years and had our leaders endorse, and translating them into real instruments that people -- that economies would agree to and live by.

     And so we are focusing on how we can improve implementation through -- by identifying a couple of areas where we could actually come up with these instruments to move forward in this manner. One area would be transparency, and things like an obligation to publish all investment regulations or all standards regulations or all government procurement regulations.

     The other one is in the area of trade policies for the new economy, which is trade policies that relate to e-commerce, I guess is another way to put it, or e-business.

     One aspect of these kinds of instruments, we would hope that in all cases we could get consensus of all economies to move forward, but in some times, some economies may not be ready. And in that case, we would still be able to move forward with those who were ready. And so we have what we're calling pathfinder agreements that would allow us to move forward even if not everyone could, you know, move forward together; we would work with those who couldn't to try to make sure that they could agree as quickly as they could.

     And finally, one aspect of implementation is to focus more resources on capacity building, to help the economies in the region who are not ready to undertake some of these obligations, to help make them more ready to do that.

     Q I have a question about the discussions on money laundering. There's been a published report that the FBI has identified Taiwan as a center of money laundering for Osama bin Laden. And some weeks ago, Mexico branded Taiwan as a terrorist country. Is there something here? Is this going to be of concern to the United States? Is it something that you're aware of and plan to bring up at APEC in discussions with the Taiwan delegation?

     MR. GREENWOOD: I'm not familiar with the specific allegations either of the FBI or of Mexico with regard to Taiwan. In APEC we have worked in the money-laundering area overall a little bit; something called Financial Crimes Working Group is part of the finance minister's process. We are also using APEC meetings to encourage others in APEC to play a more active role in some of the global regimes -- the Financial Action Task Force, FATF; the so-called Egmont Group, which sets up something called Financial Investigatory Units, FIUs, to better monitor and to track and to stop money laundering.

     Taiwan is a very active member of the APG, the Asia Pacific Group on money laundering, and so we would expect that Taiwan, as well as the other economies, will do whatever is necessary to use the instruments at its disposal to obviously not only to stop money laundering, but also to use them to track and cut off finances to terrorists.

     One of the aspects of looking at the work that we -- in looking at what needs to be done, clearly in many cases the will is there but the capacity is not. And there will be a need for technical assistance in many cases to help train folks in the region to be able to undertake this task, and also just to put in place -- in a much more basic level to be able to put in place modern banking systems that would allow that.

     MODERATOR: Over here.

     Q Sir, Vincent Chen (sp) with the United Daily News, Taiwan. I'm just wondering, is there any consensus among the member economies to bring the counterterrorism issue into this year's APEC meeting?

     And one other question is that -- do you expect to discuss the -- what you say the -- you just mentioned that there will be two main topics among this meeting. But I'm just wondering, will you expect to discuss the economic part only in the senior officials' level -- I mean, only in the senior officials' meetings and just leave all the counterterrorism stuff to the ministerial meeting and the leaders' meeting?

     MR. GREENWOOD: On the first question, I don't want to speak on behalf of all of my counterparts in APEC, to say that everyone supports it. Certainly everything we've heard so far has been extremely supportive, and the chair has also been extremely cooperative -- that is, the Chinese. And so we have been very pleased, as we have been pleased, actually, throughout the year in the conduct of the chairmanship of this meeting by China. And so I'm very optimistic that we'll have a very strong and very robust statement coming out on counterterrorism.

     In terms of the division of labor, the majority of the discussion on counterterrorism will take place at the foreign ministers' and leaders' level.

     MODERATOR: Time for a couple more questions. We'll go -- we'll go back over here next.

     Q Thank you. If I may, I would like to ask a question about food security. It is known that -- (inaudible) -- the president advocates that certain actions should be taken concerning, you know, no further sanctions should be used by agriculture products. What kind of measures will be taken during this APEC conference concerning food security issue?

     MR. GREENWOOD: We've had those discussions through this year, although I have to say that the discussion of the food system has not been an intense one this year. How this comes out in terms of the ministers' and leaders' discussion remains to be seen. We have discussed this issue of forgoing food embargoes, and that is the stated position of President Bush, that we will -- that the United States will not use food -- embargoes of food and medicine.

     Whether that's going to be some kind of collective decision in APEC, probably not. We're still kind of discussing it. I should point out that the APEC Business Advisory Council has explicitly recommended that APEC renounce -- officially renounce the use of food embargoes. So that is an issue.

     In terms of food security and the importance that trade plays in it, again, that's been something we've discussed and we'll be continuing to discuss there. Whether there will be an outcome in that -- with that regard at the ministerial leaders' meetings, that remains to be seen.

     MODERATOR: And we'll make this our last question back up here.

     MR. GREENWOOD: No questions in the back at all?

     Q (Name inaudible) -- with Power TV of Taiwan, again. Sir, I would like to come back to the question I asked earlier, the second question. It's the U.S. reaction to the nomination of Mr. Li (sp) to the informal summit. In the past, when the White House and the State Department spoke on this issue, I remember, you know, they were talking about two qualifiers: one, following past practice; two, it would be the top economic official. Does the nomination of Mr. Li (sp) meet the U.S. qualifiers? Is the nomination part of Taiwan's constructive participation in the APEC meetings in Shanghai, in your view? Thank you.

     MR. GREENWOOD: We, actually, as of today, have not been formally notified that Mr. Li (sp) is the candidate, so we haven't made really any study of this at all. We would, frankly, wait to hear from the chair as to whether there was an issue that we needed to discuss or not.

     Our view is that Taiwan has played a very constructive role in the past and will continue to play a very constructive role in APEC, a very valuable role at all levels -- at the senior level, senior official level, and the ministers level, and at the leaders' meeting. And that -- you know, we look forward to seeing that continue, and I believe that will be the case.

     Q You don't foresee any problem?

     MR. GREENWOOD: At this stage, we can't say. I mean, we have no -- you know, we have no indication that there's going to be a problem.

     MODERATOR: Okay, with that, thank you all very much.

     MR. GREENWOOD: Thank you.

END.

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