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United States, Asia–Pacific Partners Look at Ways of Fostering Trade and Economic Growth
On May 19, during APEC 2011 meetings in Big Sky, Montana, Francisco Sánchez (right), under secretary of commerce for international trade, joined a delegation that visited the facilities of West Paw Design, a small manufacturer located in Bozeman, Montana. He spoke with Spencer Williams (left), the company’s president. West Paw has incorporated sustainable practices into its manufacturing processes. (U.S. Department of Commerce photo)
In May, a series of meetings held in Big Sky, Montana, brought together ministers and representatives from 21 Asia–Pacific economies to discuss ways of supporting small businesses, encouraging green growth, and promoting anticorruption efforts. The meetings served as a prelude to a larger gathering set for Honolulu, Hawaii, this fall.
by John Ward
The challenges and future promise of Asia-Pacific trade were the focus of a series of meetings, roundtables, and seminars held May 13–21 in Big Sky, Montana, as part of the 2011 agenda of the Asia-Pacific Economic Cooperation (APEC) Forum. The gathering brought together more than 1,000 participants, including trade ministers, government officials, and private-sector representatives from all 21 APEC member economies, to discuss a variety of trade-related topics, most notably green growth, small business competitiveness, and anticorruption initiatives.
The International Trade Administration hosted APEC workshops and programs that focused on enhancing trade and competitiveness of small and medium-sized enterprises (SMEs) and also arranged the subsequent SME ministerial meeting.
Importance to U.S. Trade
The Asia–Pacific region is increasingly important to the trade position of the United States. Seven of the 15 top U.S. trading partners are APEC members. Sixty percent of U.S. exports of goods in 2010 were sold in the Asia–Pacific region.
Last November, after the 2010 APEC leaders’ meeting, President Barack Obama spoke at a gathering of chief executive officers in Yokohama, Japan, about the growing significance of the Asia–Pacific region to the U.S. and world economies. “[T]his is a relationship that will only become more important as the region continues to grow. Within five years, Asia’s economy is expected to be about 50 percent larger than it is today. And for at least the next four years, Asia–Pacific economies will grow faster than the world average.”
Green Growth and Competitiveness
A prominent element of the Big Sky events was a forum, “Shaping the Agenda: Enhanced SME Competitiveness through Green Growth,” which emphasized ways of enhancing the economic viability of SMEs through green technology and clean growth. Secretary of Commerce Gary Locke spoke to forum attendees on May 18 and noted that “in the next few decades, world economies will need to rebuild and reinvent virtually every industrial activity—from power generation and transportation to manufacturing and construction—to succeed in an energy environment that looks drastically different than the one we've grown used to.”
Locke detailed three key objectives for APEC in 2011 that will help SMEs do business in the Asia–Pacific market: (a) strengthening economic integration in the region by removing barriers to trade and investment, (b) creating an open and transparent business environment, and (c) establishing a regulatory framework that expands opportunities across the board for companies of all sizes.
Sustainable Practices in Action
On May 19, a delegation that included Locke; Senator Max Baucus; and Francisco Sánchez, under secretary of commerce for international trade, visited the production facilities of West Paw Design, a small manufacturer with 46 employees, located in Bozeman, Montana. The company, which exports to 28 foreign markets, has integrated sustainable practices into its design and manufacturing processes.
Spencer Williams, West Paw’s president, noted the help his company has received from two federal programs: “Today we were able to show real-world examples of public–private partnerships, such as MEP [Manufacturing Extension Partnership] and Foreign Commercial Service, which have increased jobs and profitability for all who work at West Paw Design.”
SMEs face many challenges when competing in the global marketplace. They face additional challenges when confronting corruption or developing effective compliance mechanisms to avoid corruption in their business activities (see sidebar). This was the topic of several workshops at Big Sky, with individual seminars focusing on ethics and the global supply chain, the construction industry, and auditing and certification.
An important accomplishment was the adoption on May 21 of a code of ethics for the APEC region’s medical device industry. According to a statement released by the APEC SME Working Group, the Kuala Lumpur Principles for Medical Device Sector Codes of Business Ethics (KL Principles) will “improve the quality of patient care, encourage innovation, and promote the growth of SMEs that produce medical devices.”
The document was developed in response to a call by APEC members in 2010 for guidelines to assist members in improving the often inconsistent and complex business ethics, rules, and practices that exist across the region.
“Once implemented, the KL Principles will help APEC member economies develop codes of ethics for their respective medical device sectors,” noted Michael Camuñez, assistant secretary of commerce for market access and compliance. “The codes will help eliminate corruption, one of the most insidious trade barriers facing SMEs throughout the APEC region.”
SME ministers agreed to continue the important work by developing similar principles for the construction and biopharmaceutical sectors.\
Lead-up to Honolulu
APEC was established in 1989 as an informal group of 12 Asia–Pacific economies that saw the need for increased economic cooperation. Since then, it has grown into an established international organization that involves all major economies in the region.
The United States is the host for all APEC events in 2011. The meetings in Big Sky, Montana, were the second round of senior officials’ meetings. They were preceded by meetings in Washington, D.C., in March and will be followed by a third round on September 12–26 in San Francisco, California. On November 12 and 13, President Obama will host the year’s signature event, the annual APEC Economic Leaders’ Meeting, in Honolulu, Hawaii.
John Ward is a writer in the International Trade Administration’s Office of Public Affairs. Lynn Costa, Daniel Miller, Anita Ramasastry, and Kelsey Scheich of the ITA’s Market Access and Compliance unit contributed to this report.
Michael Camuñez (right), assistant secretary of commerce for market access and compliance, addressing a meeting of the APEC SME Working Group at Big Sky, Montana. A code of ethics for the APEC region’s medical device industry was adopted by the Working Group. (U.S. Department of Commerce photo)
by Anita Ramasastry
Small and medium-sized enterprises (SMEs) account for approximately 90 percent of companies in the APEC region and are drivers of economic growth. Yet they are also disproportionately affected by corruption and demands for bribes, and often find it hard to develop effective tools for promoting ethical behavior—a so-called compliance gap.
Recognizing this challenge, in 2010 APEC SME ministers began work on an innovative business ethics program. The Market Access and Compliance unit of the International Trade Administration (ITA) served as the project coordinator for this important work.
At the APEC meetings in Big Sky, Montana, ITA organized workshops that highlighted practical ways of how SMEs can more effectively compete by using ethics compliance as a competitive advantage. In one session, leading companies such as Boeing, Warner Brothers, Best Buy, and Sealed Air Corp. provided guidance on how they select SME partners for their global supply chains operations and their expectations for ethical conduct. Another session focused on how SMEs can develop ethics compliance programs for as little as $1 a day.
A highlight of the APEC meetings in Big Sky was the adoption of a set of voluntary code of ethics for the medical device industry, the Kuala Lumpur Principles for Medical Device Sector Codes of Business Ethics (see main story). These will be used as a model for voluntary principles in other sectors, such as construction and biopharmaceuticals.
Work on principles for the construction sector began at Big Sky, with a workshop on the ethical challenges facing SMEs in that sector. Fluor Corporation, a leading U.S. construction company and a champion of anticorruption efforts, participated, along with representatives from several other APEC economies. The construction principles will be developed at a follow-up workshop in Hanoi, Vietnam, in fall 2011. Work on voluntary principles for the biopharmaceuticals sector is scheduled to begin at the same time in Mexico City.
Anita Ramasastry is a senior adviser to the assistant secretary of commerce for market access and compliance in the International Trade Administration’s Market Access and Compliance unit.
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