    [Public Papers of the Presidents of the United States: George W. Bush (2001, Book II)]
    [October 21, 2001]
    [Pages 1278-1286]
    [From the U.S. Government Publishing Office www.gpo.gov]

    APEC Economic Leaders' Declaration, Shanghai, China
    October 21, 2001

    Meeting New Challenges in the New Century

        1. We, the Economic Leaders of APEC, gathered today in Shanghai for
    the first time in the twenty-first century. We are here to explore ways
    to meet the new challenges confronting us. Convinced of the great
    potential of the Asia-Pacific region, we have resolved to achieve common
    prosperity through broader participation and closer cooperation.
        2. Our meeting has taken place at a crucial juncture. The major
    world economies are experiencing a slowdown more severe than
    anticipated. Most economies in the Asia-Pacific region have experienced
    an economic downturn, with some emerging economies particularly affected
    by unfavorable external market conditions. In addition, the terrorist
    attack on the United States risks undermining some industries as well as
    consumer and investor confidence. In the long run, a major challenge for
    the Asia-Pacific community is to manage the profound changes brought
    forth by globalization and the New Economy and to benefit from the
    opportunities that abound.
        3. As the premier forum for regional economic cooperation in the
    Asia Pacific, APEC is well suited to play a leading role in helping its
    member economies embrace these opportunities and challenges. We wish to
    send a clear and strong message on the collective resolve of the Asia-
    Pacific community to counter terrorism. We are determined to reverse the
    current economic downturn and maintain public confidence at a time of
    uncertainty by fighting protectionism and committing to the launch of
    the new WTO round at the upcoming WTO Ministerial Conference. These
    efforts are consonant with and contribute to the pursuit of the APEC
    vision of peace, harmony and common prosperity.

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        4. Inspired by such a vision, we are determined to work together for
    a more dynamic and prosperous Asia Pacific in the new century by
    promoting sustainable economic growth, sharing the benefits of
    globalization and the New Economy, and advancing Trade and Investment
    Liberalization and Facilitation (TILF). To this end, we reaffirm our
    commitment to achieving the Bogor Goals of free and open trade and
    investment in the Asia Pacific by 2010 for developed economies and 2020
    for developing economies. We have also charted the course for the
    development of APEC in its second decade and beyond by adopting the
    Shanghai Accord.

    Promoting Sustainable Growth

        5. We affirm our unwavering confidence in the medium and long-term
    growth prospects for the Asia-Pacific region since the fundamentals of
    the region remain sound. As reforms and restructuring following the
    1997-1998 financial crisis take effect, many emerging economies are now
    in a much stronger position to cushion themselves against the impact of
    the economic slowdown and unexpected shocks.
        6. We undertake to adopt appropriate policies and measures to
    increase economic growth and resolve to enhance macroeconomic policy
    dialogue and cooperation not only to resume growth but also to build a
    stronger foundation for sustainable growth and broad-based development.
    It is important for all economies to take timely policy actions to
    strengthen markets and facilitate an early pick-up in global economic
    activity.
        7. In this context, we pledge to accelerate our domestic efforts to
    build capacity and deepen structural reform so as to strengthen the
    market fundamentals across the region. To this end, we emphasize the
    importance of sound economic policies and corporate governance as well
    as the important role and responsibility of governments in shaping the
    legal and regulatory framework that encourages competition and
    innovation, with an increased emphasis on capacity building. Developing
    the social safety net is a high priority, as it can make an important
    contribution to reducing the harmful effects of economic shocks on
    vulnerable groups. As noted in the 2001 Economic Outlook, enhancing
    financial efficiency is also essential to promoting growth. We thus
    welcome efforts made in these areas in APEC, including strengthening
    economic legal infrastructure, supervision of capital markets, corporate
    governance, and implementation of international financial standards, as
    exemplified by the work done through the Finance Ministers' process. We
    also welcome contributions by Pacific Economic Cooperation Council
    (PECC) in these areas. We direct responsible Ministers and Officials to
    build on their work.
        8. Recognizing the importance of promoting financial stability and
    crisis prevention, we stress the need to strengthen the international
    financial system. We urge continued efforts to enhance the effectiveness
    of mechanisms to prevent the recurrence of financial crisis. We welcome
    the important steps that have been taken to strengthen the international
    financial architecture including, for example, the review by the
    Financial Stability Forum of the effectiveness and the progress in
    implementing the recommendations from the Working Group on Offshore
    Financial Centers and Highly Leveraged Institutions. We emphasize the
    importance of ensuring that representation on the International Monetary
    Fund (IMF) Board and IMF quota/share allocation appropriately reflects
    the current world economy. While the IMF and other international
    financial institutions play a pivotal role, regional cooperation can
    also be very useful in complementing efforts by these institutions to
    promote financial stability. In this connection, we welcome the
    substantial progress in implementing the Chiang Mai Initiative to
    strengthen cooperative financing arrangements among the Association of

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    Southeast Asian Nations (ASEAN) countries and China, Japan and the
    Republic of Korea. We also note the ongoing work in the Manila Framework
    Group. We support all these efforts and urge them to be strengthened.
        9. The current economic slowdown underlines, above all, the
    importance of APEC's work towards more open and stronger economies. We
    reaffirm our unyielding commitment to free and open trade and investment
    and resolve to work together to fight against protectionism in all
    forms. We render the strongest support for an open, equitable and rules-
    based Multilateral Trading System, which is essential to sustain global
    economic growth. APEC must also stay on track with its own agenda on
    trade and investment and on capacity building.

    Sharing the Benefits of Globalization and the New Economy

        10. We are convinced that globalization is a powerful vehicle that
    stimulates economic growth, and holds great promises for delivering
    higher living standards to people and improving social well-being for
    our communities. We acknowledge that the New Economy has broad potential
    to raise productivity, stimulate innovation in economic organization and
    entrepreneurship, and create and disseminate knowledge and wealth.
    However, the opportunities arising from these processes are not
    sufficiently shared among and even within economies. Hence the need to
    enable all individuals in our communities to benefit from them. We
    emphasize the importance of capacity building, both human and
    institutional, as a key answer to the challenges and opportunities of
    globalization and the New Economy. Capacity building constitutes a key
    element of the balanced approach essential to the success of APEC along
    with market opening and full participation.
        11. In this context, we reiterate that human capacity building (HCB)
    remains a central theme this year and the years ahead. We commend the
    success of the High-Level Meeting on Human Capacity Building, and
    welcome the Beijing Initiative as a comprehensive set of principles for
    human capacity building, which also provides opportunities for further
    work in the New Economy. We call on APEC fora and member economies to
    undertake follow-up activities in specific areas of their interest in
    the spirit of developed and developing economies complementing each
    other. We support the engagement of all key stakeholders in the region
    and, in particular, the establishment of the partnership of government,
    business, academic and training institutions for this purpose. We
    welcome the launch of the Consortium for APEC Cyber Education
    Cooperation initiated and sponsored by the APEC Education Foundation,
    the Human Capacity Building Promotion Program and the APEC Finance and
    Development Program. We also welcome the outcomes of the 4th Human
    Resources Development Ministerial meeting and support the Kumamoto
    Statement that makes a contribution to APEC Human Resources Development
    activities in the 21st Century as a basis for advancing social and
    economic development and the sharing of prosperity by our people.
        12. Reaffirming the importance of Economic and Technical Cooperation
    (Ecotech) in achieving equitable growth and sustainable development, we
    welcome the progress that APEC has made in advancing Ecotech goals and
    underscore that Trade and Investment Liberalization and Facilitation and
    Ecotech should be mutually reinforcing. We call for efforts to this end
    to be further strengthened. We commend the formulation and submission of
    Ecotech Action Plans by individual member economies as a major step
    forward for promoting sound and balanced development of APEC and ask
    Ministers and Officials to develop the exercise as lessons are learned.
        13. We also welcome the progress made in other areas of Ecotech. We
    endorse the

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    APEC Strategy for Combating Infectious Disease and call on members and
    relevant fora to implement its recommendations.
        14. Given the importance of Small and Medium-sized Enterprises
    (SMEs) and micro-enterprises, we instruct Ministers and Officials to
    build on APEC's Integrated Plan of Action for SMEs and place special
    emphasis on micro-enterprises. In this context, we welcome the High
    Level Meeting on Micro-enterprises to be hosted by Mexico next year.
        15. Building on work done in Brunei last year, we have made further
    progress by formulating and delivering a long-term, forward-looking and
    more action-oriented e-APEC Strategy for the development of the New
    Economy through the promotion of information and communications
    technology (ICT) and its application in our region. The goal is to build
    APEC towards a digital society, with higher growth, increased learning
    and employment opportunities, improved public services and better
    qualities of life by taking advantage of advanced, reliable and secure
    ICT and networks and by promoting universal access. Such a society
    should bring equal opportunities and widely shared benefits for all
    member economies and individuals, including women, the disabled and
    others. We commend the crosscutting character of the e-APEC Strategy and
    urge APEC fora and member economies to implement the programs for
    collective and individual actions set out in the Strategy, as
    appropriate. Under the current circumstances, the early implementation
    of the Strategy will also support the revival of the ICT sector. We also
    welcome the progress in advancing e-commerce.
        16. In September 2002 many of us will be meeting in Johannesburg for
    the World Summit on Sustainable Development, to reinvigorate our
    commitment to sustainable development in pursuit of enhancing economic
    growth, promoting human and social development and protecting the
    environment as interdependent objectives. We will consider how APEC,
    which has undertaken a broad range of activities in this area, can
    contribute to the success of the World Summit and take forward the
    outcomes in its work program.
        17. We realize that there is an ongoing public debate on the
    benefits and costs of globalization. Such debates are healthy when they
    are informed by rigorous and comprehensive analysis of the impact of
    globalization. The time has come for APEC to come forward and lead the
    public debate in a constructive manner. We instruct Officials to convene
    an APEC Dialogue on Globalization and Shared Prosperity, focusing on,
    among other issues, structural adjustment and its impact. At the same
    time, APEC should reach out to business and other stakeholders to
    communicate APEC's objectives, activities and benefits to ensure that
    they participate in and benefit from the APEC process and globalization
    at large. In particular, we thank APEC Business Advisory Council (ABAC)
    for its report and value the interaction with the Council and other
    business representatives. We also direct our Ministers and Officials to
    develop and implement programs to give effect to the APEC Communications
    and Outreach Strategy as well as the conclusions of the Ad Hoc Group on
    APEC Interaction.
        18. Noting that sustainable growth in the APEC region also requires
    the ability to feed a growing and increasingly prosperous population,
    Leaders call for accelerated implementation of the APEC Food System
    initiative. Recognizing the benefits of biotechnology in improving
    productivity, increasing nutrition, and reducing the environmental
    impact of agricultural production, we reaffirm the importance of safe
    introduction and use of biotechnology products based on sound science.
    We also welcome the initiative to hold a policy-level dialogue on
    agricultural biotechnology and call for more related capacity building
    activities.

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        19. We take satisfaction at the significant progress made, through
    the leadership of the Ad Hoc Group on Gender Integration, in the
    capacity of APEC to address gender equity in its work. Our commitment to
    a wide distribution of the economic opportunities of our era requires
    the application of gender perspectives in APEC's work, we welcome the
    decision to hold a Second Ministerial Meeting on Women in Mexico in
    2002, as an opportunity to make further progress.

    Supporting the Multilateral Trading System

        20. Trade and investment liberalization and facilitation hold
    another key to realizing our vision for reduced disparities and common
    prosperity. They have taken on increased importance at a time when rapid
    changes are reshaping the global marketplace. Hence, we commit to
    further efforts in advancing trade and investment liberalization and
    facilitation both within our region and globally.
        21. In November, a major decision will be taken at the Fourth WTO
    Ministerial Conference. Its outcome will have long-term implications for
    our future. Our choice is unmistakably for a stronger Multilateral
    Trading System with greater opportunities for all. We strongly support
    the launch of the WTO new round at the conference, recognizing that the
    current slowdown in the world economy has added to its urgency. We agree
    that, once launched, the new round should be concluded expeditiously.
        22. We emphasize the need for a balanced, sufficiently broad-based
    agenda, which is achievable. This is essential to the successful launch
    and conclusion of the New Round. We agree that the agenda for the New
    Round should include further trade liberalization, the strengthening of
    WTO rules, implementation issues, and reflect the interests and concerns
    of all members, especially those of the developing and least developed
    ones. We also agree that such an agenda should address the challenges in
    the 21st century and support the goal of sustainable development. This
    will help ensure that the prosperity flows from growing trade and
    investment is accessible and equitably distributed to all. In this
    context, we also emphasize the importance that the New Round be
    supported by all WTO members, and hence the need for effective
    implementation of special and differential treatment and for enhancing
    WTO's internal transparency.
        23. We reconfirm the commitment to the APEC-wide moratorium on the
    imposition of custom duties on electronic transmissions, and agree on
    its extension until the Fifth WTO Ministerial Conference, recognizing
    the importance of relevant WTO agreements for electronic commerce.
        24. We reaffirm the importance of APEC WTO-related capacity building
    activities which realize the objectives of the Strategic APEC Plan as a
    unique, substantial contribution to strengthening the Multilateral
    Trading System, and call for the accelerated implementation of the Plan
    to assist developing economies in implementing the WTO agreements.
        25. We applaud the conclusion of all negotiations on the terms for
    China's membership in the WTO as a historic development that not only
    helps make WTO a truly world organization but also reinforces the
    underpinnings for global economic cooperation. We urge that the decision
    on final approval of China's accession be taken at the upcoming
    Ministerial Conference. We also reiterate strong support for the final
    approval of the accession by Chinese Taipei at the Conference and the
    advancement of WTO accession by the Russian Federation and Viet Nam.
        26. We reaffirm that regional and bilateral trade agreements should
    serve as building blocks for multilateral liberalization in the WTO. We
    affirm that the existing and emerging regional trading agreements should
    therefore be consistent with WTO rules and disciplines. We also believe
    that these arrangements should be in line

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    with APEC architecture and supportive of APEC's goals and principles. We
    note the initiatives on exchange of information in this regard.

    Sharpening the Vision for the Future

        27. APEC has come a long way since its inception in 1989. So has the
    world around it. These changes have not in any way lessened the need for
    a vehicle of cooperation like APEC in our region. On the contrary, they
    have made it more compelling for us to remain fully committed to the
    APEC process, to the vision of a peaceful and prosperous Asia-Pacific
    community of diverse yet interdependent economies that has evolved from
    Seattle to Brunei, and above all, to the Bogor Goals. We also reaffirm
    our belief in the unique APEC Approach based on the fundamental
    principles of voluntarism, consensus-building, combination of individual
    and collective actions, flexibility, comprehensiveness and open
    regionalism, which has inspired and underpinned our successes.
        28. At the same time, we recognize that APEC must demonstrate its
    dynamism in advancing with the times by responding and adapting to
    changes in the global and regional economy. As it enters the second
    decade, it is important for APEC to enrich, update and sharpen its
    vision for the future. In this respect, we envision that APEC's
    objectives in the second decade are to make continuous progress in
    achieving the Bogor Goals; deepen the spirit of community by sharing the
    benefits of growth more widely and equitably; and build APEC into a
    closer, stronger partnership for regional economic cooperation.
        29. To this end, we announce today the Shanghai Accord as a
    strategic, forward agenda for the development of APEC in the coming
    years. The Accord not only gives voice to our common resolve to fulfill
    our commitments, it also stands as a template laying out some key steps
    to be taken to achieve our Goals and Objectives. Reflecting the
    diversity of APEC's membership, it incorporates trade and investment as
    well as economic and technical cooperation as two mutually supportive
    and reinforcing elements.
        30. In the Shanghai Accord, we commit to:

         Broadening APEC's vision for the future by identifying a
                conceptual and policy framework to guide APEC in the new
                century. Such a framework recognizes the changes entailed by
                globalization and the New Economy and reflects the need to
                extend the APEC agenda to cover reforms and capacity
                building at both domestic and international levels;
         Clarifying APEC's roadmap for achieving the Bogor Goals on
                schedule with a mid-term stocktake of the overall progress
                in 2005, including by broadening and updating the Osaka
                Action Agenda, adopting a pathfinder approach in advancing
                selected APEC initiatives towards achieving the Bogor Goals,
                promoting the adoption of appropriate trade policies for the
                New Economy, following up on the APEC Trade Facilitation
                Principles, pursuing greater transparency in economic
                governance; and
         Strengthening APEC's implementation mechanism by
                strengthening the Individual Action Plan Peer Review
                process, reinforcing Ecotech and capacity building efforts.

        31. We direct our Ministers and Officials to follow up actively on
    the Accord. We have no doubt that with our concerted efforts the vision
    we set here will over time come to full fruition, culminating in a
    stable, secure and prosperous Asia-Pacific community.

    Appendix 1 Shanghai Accord

    I. Broadening the APEC Vision

        Globalization and the New Economy have transformed the global and
    regional economy significantly since the Bogor

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    Goals, bringing forward extraordinary opportunities as well as
    challenges. APEC's vision needs to reflect these changes. While trade
    liberalization is at the core of APEC agenda, Leaders also agree that
    the Bogor Goals need to be placed within the context of an updated and
    expanded vision that addresses trade and investment liberalization and
    facilitation and economic and technical cooperation in an integrated
    manner to maximize the benefits for all economies in the region. One of
    the greatest challenges to materialize such a vision is to intensify the
    collective and individual actions that economies take at domestic and
    international levels on reforms and capacity building across a range of
    areas.
        The strategic goals of the Finance Ministers' Process should also be
    reflected in a broader vision for APEC, given the important role of
    sound macroeconomic policies, good economic governance, stable financial
    systems and greater economic interaction have in improving prosperity
    for the region.

    II. Clarifying the Roadmap to Bogor

    Broadening and updating the OAA
        Leaders applaud the work done this year on the Osaka Action Agenda
    (OAA), and recognize its importance in reflecting APEC's accomplishments
    and ability to respond to changes in our regional and global situation.
    Leaders agree that the OAA should be broadened to reflect fundamental
    changes in the global economy since Osaka, such as the development of
    new economy including through the implementation of relevant aspects of
    e-APEC Strategy, and Strengthening the Functioning of Markets. Leaders
    direct Ministers to follow this up. Officials should present an interim
    report at the 2002 Meeting of Ministers Responsible for Trade (MRT) and
    a full report at the 2002 APEC Ministerial Meeting (AMM) on their
    recommendations with regard to broadening the OAA.

    Adopting a pathfinder approach in advancing some APEC initiatives
        Leaders reaffirm that those economies ready to initiate and
    implement a cooperative arrangement may proceed to do so, consistent
    with the Bogor Declaration. Leaders encourage the development of such
    ``pathfinder initiatives' and agree that in adopting such an approach,
    APEC principles of voluntarism, comprehensiveness, consensus-based
    decision-making, flexibility, transparency, open regionalism and
    differentiated timetables for developed and developing economies should
    be observed. Use of `pathfinder initiatives' based on a group of members
    piloting the implementation of the initiatives, will invigorate progress
    towards the Bogor Goals and provide a framework to encourage broader
    participation through enhanced capacity building programmes. Leaders
    also agree that these initiatives should be transparent and open, with
    clearly defined objectives and framework for implementation to encourage
    the broadest participation by other APEC members when they are ready to
    join.

    Promoting the adoption of appropriate trade policies for the New Economy
        Leaders recognize the importance of adopting appropriate trade
    policies to reflect the new context and encourage the development of the
    New Economy. As part of this effort, Leaders instruct officials to
    undertake by mid-2002 an exchange of appropriate trade policy
    information, such as information on the status of liberalization of
    services, and adherence to tariff and intellectual property regimes. On
    this basis, economies may develop targets by the Ministerial Meeting in
    2002. In this exercise, account should be taken of the implementation of
    relevant recommendations endorsed in the e-APEC Strategy. Given the
    diversity among member economies, Leaders agree that the development of
    the New Economy would also involve developing and implementing concrete
    capacity building programs to improve performance.

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    Follow up on the Trade Facilitation Principles
        Leaders instruct Ministers to identify, by Ministerial Meeting in
    2002, concrete actions and measures to implement the APEC Trade
    Facilitation Principles by 2006 in close partnership with the private
    sector. The objective is to realize a significant reduction in the
    transaction costs by endeavoring to reduce them by 5 percent across the
    APEC region over the next 5 years. Leaders also instruct Ministers to
    explore the possibility of setting objective criteria on trade
    facilitation, taking fully into account the diversity among the members
    as well as progress achieved in respective economies so far. Leaders
    also agree that assistance programmes to help build the capacity of
    developing economies in trade facilitation is particularly important.

    Adoption of transparency principles
        Leaders recognize the importance of transparency in economic
    governance. In this regard, APEC has developed, menus of options and
    principles in different areas that contain transparency provisions.
    Leaders direct Ministers to pursue the implementation of APEC's agreed
    transparency principles, taking into account economies' specific
    circumstances and report on the progress in their IAPs in 2002 and
    thereafter. Leaders also underline the importance of well-targeted
    assistance to help the developing economies make progress towards
    greater openness and transparency. Leaders note the importance of
    cooperation on e-government for achieving this objective.

    III. Strengthening the Implementation Mechanism

    Strengthening the IAP Peer Review Process
        Leaders welcome the decision by Ministers to strengthen the
    Individual Action Plan (IAP) peer review process, and encourage member
    economies to volunteer their IAPs for peer review on the basis of the
    new approach. Leaders also agree that upon completion of such a review
    cycle, involving all volunteer economies, a mid-term stocktake of the
    overall progress towards the Bogor Goals should be undertaken in 2005.

    Strengthening Ecotech and capacity building efforts
        Leaders recognize that in addition to promoting sustainable
    development and narrowing disparity, Ecotech helps to enable all member
    economies to achieve prosperity through activities that both directly
    support trade and investment liberalization and facilitation and
    strengthen the competitiveness of our economies. Leaders applaud the
    efforts undertaken this year to update the OAA Part II and call for
    greater integration of Ecotech efforts with all APEC priority goals.
    Leaders underscore the need to give a strong impetus to ensuring the
    effective implementation of various Ecotech initiatives, especially
    crosscutting issues such as human capacity building.
        Leaders recognize the importance of substantially enhancing the
    profile of Ecotech and improving the coordination and management of
    Ecotech activities of all fora. In this context, Leaders welcome the
    review to be undertaken on the mandate and role of the SOM Subcommittee
    for Ecotech (ESC), and look forward to early progress. Leaders also
    recognize the need to encourage the incorporation of the priorities of
    micro, small and medium enterprises throughout the APEC agenda.
        Leaders agree to further develop Ecotech Action Plans (EAPs), as an
    instrument to gauge and encourage Ecotech activities, drawing from the
    experience and lessons learned in the pilot phase. Leaders also call on
    all members to take part in this exercise on a voluntary basis. Leaders
    agree that APEC should strengthen ties with bilateral, multilateral, and
    private funding entities with a view to minimizing duplication and
    maximizing the delivery of capacity building programs. Leaders instruct
    Ministers and officials to intensify

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    Ecotech activities and report the progress to the Ministerial Meetings
    next year.

    Note: The joint statement was made available by the Office of the Press
    Secretary but was not issued as a White House press release. An original
    was not available for verification of the content of this joint
    statement.