2017_Annual_Report_(January-December_2017).pdf

March 2018

This publication was produced by Nathan Associates Inc. for review by the United States Agency for International Development.

ANNUAL REPORT: JANUARY 1,

2017 – DECEMBER 31, 2017

US-APEC Technical Assistance to Advance Regional Integration (US-ATAARI)

ATAARI-18-037

ANNUAL REPORT: JANUARY 1,

2017 – DECEMBER 31, 2017

US-APEC Technical Assistance to Advance Regional Integration (US-ATAARI)

DISCLAIMER

This document is made possible by the support of the American people through the United States Agency for International Development (USAID). Its contents are the sole responsibility of the author or authors and do not necessarily reflect the views of USAID or the United States government.

CONTENTS

Acronyms v

Executive Summary viii

Key Achievements: January 1, 2017 – December 31, 2017 viii

1. Introduction 1

2. General Program Management 3

Staffing 3

Work Plan 4

Contractual Changes 4

M&E Plan 4

End of Project Evaluation 5

No-Cost Estension 5

3. Status on Work Plan Interventions 7

Program Area 1: Green Growth 7

Program Area 2: Trade and Investment Facilitation 10

Program Area 3: Regulatory Reform 17

Program Area 4: Human Security 25

Program Area 5: Women’s Economic Empowerment 30

Program Area 6: Host Year Capacity Building and APEC Secretariat 36

Cross-Cutting Initiatives 42

Conclusion 45

Annex A: Progress Summary 47

Annex B: Success Stories 53

Annex C: US-ATAARI Assistance to the GOB 55

Annex D: 2017 Outstanding Activities 56

ACRONYMS

A2C2 APEC Alliance for Supply Chain Connectivity ACTI ASEAN Connectivity for Trade and Investment ADB Asia Development Bank AMR Antimicrobial resistance ANSSR APEC New Strategy for Structural Reform APEC Asia-Pacific Economic Cooperation AR Advance rulings ARCAM APEC Regulatory Cooperation Advancement Mechanism ASCR APEC Services Competitiveness Roadmap ASEAN Association of Southeast Asian Nations B2B Business-to-business B2C Business-to-consumer CIAT International Centre for Tropical Agriculture COP Chief of Party COR Contracting Officer's Representative (USAID) CPAU Communications and Public Affairs Unit CSA Climate smart agriculture CTI Committee on Trade and Investment CT/ST Counter-Terrorism and Secure Trade CTWG Counter-Terrorism Working Group DCOP Deputy Chief of Party DOC Department of Commerce (U.S.)

DOE Department of Energy (U.S.)

DOL Department of Labor (U.S.)

DOS Department of State (U.S.)

DOT Department of Transportation (U.S.)

DQA Data Quality Assessment EAP/EP Office of Economic Policy in the Bureau of East Asian and Pacific Affairs

(DOS)

EC Economic Committee ED Executive Director EGS Environmental Goods and Services EoDB Ease of Doing Business EPWG Emergency Preparedness Working Group EWG Energy Working Group FAO Food and Agriculture Organization of the United Nations FAS Foreign Agriculture Service (USDA) FDI Foreign Direct Investment FFS Fossil Fuel Subsidies

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FFSR Fossil Fuels Subsidy Reform FSCF Food Safety Cooperation Forum FTF Foreign Terrorist Fighter G20 Group of Twenty GDP Gross Domestic Product GDVC General Department of Viet Nam Customs GOB Government of Burma GoFD Group of Friends on Disability GRP Good Regulatory Practice GSI Global Subsidies Initiative GVC Global Value Chain HHS Department of Health and Human Services (U.S.)

HLPDAB High Level Policy Dialogue on Agricultural Biotechnology HRDWG Human Resources Development Working Group HWHE Healthy Women, Healthy Economies IEA International Energy Agency IFC International Finance Corporation IISD International Institute for Sustainable Development ILO International Labor Organization IMF International Monetary Fund KPI Key performance indicator LPG Liquid petroleum gas M&E Monitoring and Evaluation MARD Ministry of Agriculture and Rural Development (Viet Nam) MITI Ministry of International Trade and Industry (Malaysia) MOIT Ministry of Industry and Trade (Viet Nam) MSME Micro, Small, and Medium Enterprise MYAP Multi-Year Action Plan NCAPEC National Center for APEC NCI Natural Coastal Infrastructure NCSC National Customs Service of Chile NOAA National Oceanic and Atmospheric Administration NTB Non-tariff Barrier OECD Organisation for Economic Co-operation and Development OFWG Oceans and Fisheries Working Group PAP Pre-arrival Processing PIRS Performance Indicator Reference Sheet PNG Papua New Guinea PPFS Policy Partnership on Food Security PPP Public-Private Partnership PPSF Petroleum Price Stabilization Fund PPWE Policy Partnership for Women and the Economy PTIN Partnership Training Institute Network RAASR Renewed APEC Agenda on Structural Reform RDMA Regional Development Mission for Asia (USAID)

A C R O N Y M S V I I

RIA Regulatory Impact Analysis RMCD Royal Malaysia Customs Department SCE Steering Committee on Economic and Technical Cooperation SCFAP II Supply Connectivity Framework Action Plan Framework Phase 2 SME Small and Medium Enterprise SMEWG Small and Medium Enterprise Working Group SMM Sustainable Materials Management SOM Senior Officials’ Meeting STEM Science, technology, engineering, and mathematics SUT Supply-use table TA Technical Assistance TBT Technical Barriers to Trade TDSI Transport Development Strategy Institute (Viet Nam) TFA Trade Facilitation Agreement TPTWG Transportation Working Group UNCITRAL United Nations Commission on International Trade Law UNDP United Nations Development Programme UPS United Parcel Service USAID United States Agency for International Development US-ATAARI US-APEC Technical Assistance to Advance Regional Integration USDA U.S. Department of Agriculture USTR Office of the United States Trade Representative WE-APEC Women’s Entrepreneurship in APEC WEF Women and the Economy Forum WiT Women in Transportation WTO World Trade Organization

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EXECUTIVE SUMMARY

The US-APEC Technical Assistance to Advance Regional Integration (US-ATAARI) team is pleased to present its fourth annual report covering activity interventions implemented January 1, 2017 – December 31, 2017 from the Fifth Annual Work Plan. US-ATAARI also engaged in planning for a number of interventions that will be launched or implemented in 2018. Key achievements that occurred during this reporting period are described in brief below. Progress during this period on key performance indicators (KPIs) are detailed progress summary included as Annex A. Enabling US-ATAARI and United States Agency for International Development (USAID) staff to measure progress toward expected results, the KPIs generate the performance information necessary to guide adaptive management of the activity to ensure resources are applied where they may have the most positive impact.

KEY ACHIEVEMENTS: JANUARY 1, 2017 – DECEMBER 31, 2017

Program Area 1: Green Growth Fossil Fuels Subsidy Reform (FFSR): In support of APEC’s goal to phase out inefficient fossil fuel subsidies, US-ATAARI continued its work on a fossil fuel subsidy reform peer review assessment in Viet Nam. The peer review team conducted the economy-level review, including meeting with the Ministry of Industry and Trade (MOIT) of Viet Nam and other relevant stakeholders to discuss the selected subsidies and their efficiency and effectiveness in Viet Nam’s current political and economic environment. US-ATAARI also drafted the Viet Nam FFSR report, which outlines the key findings and recommendations to offer areas of opportunity to reduce inefficient fossil fuel consumption and better meet policy objectives. Having incorporated feedback from U.S. Government counterparts, US-ATAARI submitted the final draft report to the General Director of Energy within the Viet Nam MOIT for comment. However, due to a reorganization of Viet Nam’s energy ministry, expected input will be delayed and US-ATAARI aims to finalize in 2018.

In addition, US-ATAARI implemented the APEC FFSR Workshop on Effective Pricing Mechanisms and Mitigation Strategies in Jakarta, Indonesia in July. Major takeaways included:

substantial recent progress on subsidy reform across the region, particularly on transport oil subsidies; discovering that a majority of subsidies in the APEC region are now in the residential sector, specifically for electricity, gas, and LPG; and that the key challenge is to make all reforms resilient to price increases and to implement mitigation measures to ensure their sustainability.

Clean Energy Investments: US-ATAARI collaborated with the U.S. Department of Energy (DOE) and the U.S. Department of State (DOS) to organize a workshop to provide capacity building and share tools to assess the connection between health and environmental impacts resulting from power generation investment decisions. As the second event of a two-part series co-sponsored by APEC and ASEAN, entitled “Trainings in Renewable Energy Best-Practices:

Finalized eight technical reports

Implemented 22 workshops

Trained 1,208 participants

E X E C U T I V E S U M M A R Y IX

Procurement, Contracts, Life-Cycle Cost Analysis, and Risk Mitigation to Mobilize Private Investment,” US-ATAARI implemented the “APEC Making the Case for Clean Energy Investments with Life-Cycle Impact Assessments Workshop” in Kuala Lumpur, Malaysia in October 2017. The US-ATAARI training component provided decision-makers, comprised mainly of officials from energy and finance ministries, with relevant context on lifecycle impact assessments and available tools to consider the environmental and health impacts when deciding how to proceed with investments. The event also built capacity on specific social impacts across the lifecycle of an investment, available tools and datasets for estimating the extent and cost of such impacts, and strategies for applying impact assessments to drive cleaner energy decision-making. The workshop also represented a successful collaboration between APEC and ASEAN to join together to advance issues of mutual importance.

Program Area 2: Trade and Investment Facilitation Supply Chain Connectivity: US-ATAARI continued robust support of supply chain connectivity programs across a number of APEC economies, while also continuing to coordinate private sector inputs through the APEC Alliance for Supply Chain Connectivity (A2C2). US- ATAARI developed a report assessing advance rulings (AR), expedited shipments and pre-arrival processing (PAP) in Viet Nam. The report indicated that, while the General Department of Viet Nam Customs (GDVC) has adequate programs in place and issued rules and regulations that are generally consistent with international standards, certain systems, procedures, and processes in Viet Nam still face impediments to greater dissemination, utilization, and optimization.

US-ATAARI continued its role in the A2C2, supporting the group’s 6th and 7th meetings. The meetings: 1) updated A2C2 members on progress made under the capacity building programs underway in Chile, Malaysia, the Philippines, and Viet Nam and presented new capacity building projects for 2018; 2) explored the implementation of the Supply Chain Connectivity Framework Action Plan (SCFAP2) and measurement of progress made; and 3) offered case studies detailing how companies are addressing chokepoints in the region through cold chain storage and more.

Transportation Infrastructure: In support of a multi-year U.S. government-led initiative that aims to promote economies’ knowledge of public-private partnerships (PPPs) in transportation infrastructure, US-ATAARI completed a comprehensive literature review to capture information on PPPs in the transportation sector in January 2017. The literature review summarizes various APEC policy frameworks, initiatives, and activities surrounding PPP development in the region.

The research also lists objectives for economies to consider when choosing a PPP over a traditional public procurement process to detail the costs and benefits of using a PPP approach.

Trade in Services: US-ATAARI implemented the APEC Trade in Services Index Data Workshop in October 2017 to contribute to the achievement of goals outlined in the APEC Services Competitiveness Roadmap (ASCR) Implementation Plan (2016-2025). Expert panelists spoke on topics related to the importance of services trade and APEC’s work in implementing the ASCR; the value and use of trade in services data; APEC policies and competitiveness in global services trade; as well as emerging AEPC services sectors. The workshop also involved a series of practical, interactive sessions on data extraction and analysis using OECD Services Trade Restrictiveness Index (STRI) methodology where experts discussed the OECD STRI composite index and the OECD regulatory database. This enabled participants to gain a strong understanding of OECD tools in the context of the broader discussions on the development of an APEC Trade in Services Index.

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Digital Trade and Access to the Digital Economy: In support of growing efforts in APEC to focus on digital economy issues, both in terms of access to the digital economy and digital trade, US-ATAARI implemented a trade policy dialogue in May 2017. The dialogue aimed to better understand the current levels of development in digital trade and what factors might be inhibiting the expansion of digital trade in the region. In addition, US-ATAARI finalized its report Promoting the Digital Economy in the ASEAN and APEC Regions, which provides the U.S.

Government, primarily USAID, with an overarching framework for policy engagement on digital economy issues within the Asia-Pacific region, specifically in the context of ASEAN and APEC.

US-ATAARI also implemented a one-day APEC Workshop on Enabling MSME Access to the Digital Economy in Ho Chi Minh City, Viet Nam in September. SME policymakers discussed the various challenges that the region experiences, specifically on fostering digital literacy and utilizing the free flow of information. The outcomes and solutions that were discussed at the workshop were presented during the SME Working Group meeting on September 13, also in Ho Chi Minh City.

Program Area 3: Regulatory Reform Ease of Doing Business (EoDB): As part of the activities under the Ease of Doing Business Implementation Plan 2016-2018, a living document that US-ATAARI helped develop to guide capacity building and technical assistance activities to improve business environments, US- ATAARI implemented several structural reform work stream activities. This includes a two-day capacity building workshop in February that highlighted the importance of competition to productivity, economic efficiency, innovation, consumer choice, consumer welfare, and overall economic growth in the APEC region. The training drew heavily on the OECD’s Competition Assessment Toolkit as a practical methodology that helps competition authorities and decision makers identify and evaluate existing and proposed policies. US-ATAARI also finalized the study Assessing APEC Starting a Business Frameworks according to International Best Practices to promote better understanding of each APEC economy’s economic and legal infrastructure on the EoDB topic of Starting a Business. Drawing on the preliminary findings of this study, US-ATAARI implemented the APEC EC Workshop on Starting a Business: Simplified Business Registration and Incorporation according to International Best Practices in August on the margins of the APEC Senior Officials’ Meetings (SOM 3) to assist APEC member economies in making further improvements to their business enabling environments.

US-ATAARI also finalized the Assessing APEC Getting Credit Frameworks According to International Best Practices: Secured Transactions Report and Matrix in March 2017. The study evaluates APEC economies’ legal frameworks against critical features of a modern secured transactions framework based on international best practices set forth by United Nations Commission on International Trade Law (UNCITRAL) Model Law on Secured Transactions, the United Nations Convention on the Assignment of Receivables in International Trade, and the Organization of American States’ Model Inter-American Law of Secured Transactions for the Americas. To highlight the study’s findings, US-ATAARI implemented a policy dialogue to identify and address the legal, regulatory, and intuitional challenges to contracting and contract enforcement for micro, small and medium-sized enterprises engaged in cross-border trade. US-ATAARI also worked with U.S. Government counterparts and USAID to put together and submit the project proposal for endorsement by the Economic Committee on improving access to credit in the region, which received APEC funding and will be implemented in 2018.

Food safety efforts: In support of APEC work to advance food safety cooperation, US- ATAARI helped to implement a five-day program of events designed to bring together food

E X E C U T I V E S U M M A R Y X I industry regulators from the public sector and private sector participants from various food-related industries. US-ATAARI implemented the APEC Export Certificate Workshop to focus on the appropriate use of export certificates to facilitate trade in safe food products in the APEC region. US-ATAARI also supported the other food safety events co-hosted by the United States, Australia, and China, including a workshop on Modernization of Food Safety Systems; a meeting on Future Perspectives on the Harmonization of Pesticides Maximum Residue Limits;

the Partnership Training Institute Network (PTIN) Steering Group Convention; and the 6th Meeting of the APEC Food Safety Cooperation Forum.

Electric Vehicles (EV): Continuing APEC’s work to promote EV standards, US-ATAARI helped to build out implementation of the APEC Electric Vehicles Roadmap Workshops 3 & 4 on the margins of SOM 3 in Ho Chi Minh City, Viet Nam in August. APEC representatives from the public and private sectors had the opportunity to collectively discuss next steps on electric vehicle standards and regulations, demonstrating in particular advancements made by the Philippines, Malaysia, New Zealand, and the United States, and the opportunities the advancements will provide to economies and businesses. As a major takeaway, both government and private sector participants publicly recognized the unique role of this forum to provide a space for industry and government dialogue to share and exchange information on emerging trade issues.

Good Regulatory Practices (GRP): Furthering APEC’s GRP initiative, US-ATAARI supported the implementation of the 10th GRP Conference, hosted by Viet Nam, which took place August on the margins of SOM 3. Government representatives discussed key issues, including issues for digital trade and gender inclusion; the WTO Trade Facilitation Agreement focusing on transparency; and internal coordination in rule-making activities.

Program Area 4: Human Security Coastal Ecosystems: In an effort to reduce these impacts and costs through science-based management of ocean and coastal ecosystems and informed decisions on green infrastructure management and development, US-ATAARI finalized the Phase 1 report, which included an initial set of recommendations that APEC economies may consider to help bridge the identified knowledge and policy gaps. The team also launched the Phase 2 of the project, which entails the economic valuation study of green infrastructure in coastal ecosystems in APEC. The study, to be finalized in 2018, will provide an initial assessment of the economic value of services provided by natural coastal infrastructures (NCIs) in coastal ecosystems in the APEC region for the purposes of disaster risk reduction and response, as well as coastal resilience.

Supply Chain Resilience: To minimize disruptions to the supply chain, effectively manage risks associated with impacts of disasters and build resilient supply chains, the U.S. Government led efforts to develop a set of principles at a workshop on Global Supply Chain Resilience, which were adopted by APEC members in 2013. In March 2017, US-ATAARI implemented an economy-level training focused on application of the principle of promoting best practice policy, regulations, and flexibility to enable supply chain resilience. The two-and-a-half day workshop analyzed and discussed disaster-related risks and vulnerabilities to Papua New Guinea’s (PNG’s) supply chains with a focus in the agriculture and food production sectors. The program consisted of: (1) a symposium featuring best practices and lessons learned; and (2) a workshop focused on enabling participants to develop a practical and functional Action Plan for improving the resilience of supply chains in Papua New Guinea. US-ATAARI also supported APEC’s supply chain resilience goals by implementing the APEC Workshop on Promoting Policies, Regulations

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Climate Smart Agriculture: In support of APEC efforts to address the adverse impacts of climate change on agricultural productivity and food security, US-ATAARI implemented two APEC capacity building workshops to share knowledge and build cooperation to inform the development of the APEC Multi-Year Action Plan (MYAP) on Food Security and Climate Change. The first workshop explored existing capacity gaps and good practice examples that could be replicated and scaled up in the region. It also served to generate recommendations of potential topics and initiatives that could be further considered for inclusion in the MYAP. The second workshop aimed to define the overall content and structure of the proposed MYAP. It also resulted in establishing a core group of APEC economies that will lead the implementation of this work beyond 2017. The MYAP was submitted for endorsement at the Food Security Ministerial Meeting in Can Tho, Viet Nam in August 2017.

High Level Policy Dialogue on Agricultural Biotechnology (HLPDAB): This year, to further encourage the use of agricultural biotechnology and the United States’ efforts to promote the technology’s benefits and advance global food security, US-ATAARI implemented the one and a half-day High Level Policy Dialogue on Agricultural Biotechnology (HLPDAB) Workshop: Driving from 1G to 5G on the margins of Food Security Week in Can Tho, Viet Nam in August. The workshop brought together regulators, policy makers, and technology developers to exchange the most current information on pressing issues affecting innovative technologies while building relationships among APEC members. The workshop also explored how policies for the use and trade of agricultural biotechnology products can help address challenges related to food security and the impacts of climate change. The outputs from the workshop were later incorporated in the APEC HLPDAB Meeting, also in late August.

Program Area 5: Women’s Economic Empowerment Healthy Women, Healthy Economies (HWHE): Having developed tools that can equip companies and governments with the information needed to pitch implementation of HWHE actions in their respective economies in 2016, US-ATAARI implemented a one-day training in May 2017 to encourage implementers to share their impact data and best practices to date.

Economies and businesses at all stages of implementation were able to discuss lessons learned at the domestic and firm level, as well as hear crucial insights that will help them reform and expand existing programs and policies. Moreover, participants had an opportunity to hone in on the aspects of the toolkit particularly relevant to labor officials. While developing an outcomes report for the 2017 workshop, US-ATAARI learned that the workshop participants from Papua New Guinea held an economy-level follow-on workshop, which involved both the private sector and a presentation on the government’s new gender and social inclusion policy. The report also captures key takeaways and charts a path forward as we move toward 2018 and begin to focus on implementing the HWHE Guidebook for Small and Medium Enterprises.

Women in Science, Technology, Engineering and Math (STEM): To advance APEC’s goal of further integrating women and girls into STEM sectors, US-ATAARI implemented a one-and-a-half day training that provided a forum for a deeper dive discussion on how the region can

E X E C U T I V E S U M M A R Y X I I I strengthen the network of actors in Women in STEM and support the 2016 US-ATAARI study.

The workshop also highlighted best and emerging practices through the region across the four STEM pillars. Participants had the opportunity to: (1) discuss tangible ideas for implementation of recommendations set forth in the study APEC Women in STEM: A Framework for Dialogue, Learning and Action; (2) identify specific opportunities for action and public-private sector partnerships that can propel APEC forward in terms of supporting Women in STEM fields; and

(3) prioritize APEC’s actions moving forward on Women in STEM, including highlighting complementary and collaborative efforts by partner economies in APEC.

Women’s Entrepreneurship in APEC (WE-APEC): Chile has identified the issues of women’s entrepreneurship issues within its economy, building on the WE-APEC research and other domestic-level initiatives currently underway. In an effort to advance this critical area, US- ATAARI supported Chile in implementing the Women’s Leadership in the Private Sector in Chile roundtable in July in Santiago, which focused on supporting women’s leadership and advancement in business. The half-day’s discussion highlighted key trends and approaches to increasing women’s leadership and the challenges women face in Chile, before moving participants to narrowing focus on what actions might be taken by Chile and others to address the key gender gap.

Women in Transportation (WiT): US-ATAARI implemented three key activities under the Women in Transportation workstream this year. In coordination with the Viet Nam Ministry of Transport’s Transport Development Strategy Institute (TDSI), US-ATAARI launched the planning for the Viet Nam WiT pilot project. The pilot project is driven by the 2015 APEC Women in Transportation Data Framework and Best Practices Report, which provided a framework of data-oriented actions economies could undertake to increase the inclusion of women into employment in the transportation sector. Viet Nam’s pilot project will focus on the Framework’s Entry into the Sector pillar to understand how education and training can best prepare women with the skills for employment opportunities. In early August, US-ATAARI led various interviews with students from the University of Transport Technology and the Vietnam Aviation Academy and employers from the railway, information technology, and airport ground services industries to gain perspective on the employment landscape for women. US-ATAARI also continued to support the Papua New Guinea and Malaysia’s WiT pilot programs in 2017.

In September, US-ATAARI implemented the 2017 APEC Women in Transportation (WiT) Forum: Gauging Progress and Moving Forward in Hue, Viet Nam with the goal of advancing the integration of women into transportation-related employment and transport system design.

Building on the APEC Women in Transportation report, public, private, and civil society stakeholders focused on strategies to increase women’s job opportunities throughout their careers – starting at primary education and continuing through leadership. The Forum also provided an opportunity to gather final inputs into the APEC Women in Transportation Best Practices Compendium, which US-ATAARI updated in 2017 with finalization expected in early 2018. The Compendium Update reexamined the regional and economy-level efforts APEC members and private sector companies are undertaking to advance women’s participation in transportation.

Program Area 6: Host Year Capacity Building and APEC Secretariat APEC Host Year Capacity Building: PNG will host its first formal APEC meetings in 2018.

In an effort to increase familiarity with APEC among PNG government offices, PNG worked closely with US-ATAARI on a suite of capacity building programs covering APEC and Host Year

X IV A N N U A L R E P O R T : J A N U A R Y 1 , 2 0 1 7 – D E C E M B E R 3 1 , 2 0 1 7 responsibilities in the lead up to its 2018 Host Year. Continuing its support for this broader initiative, US-ATAARI implemented a two-day workshop focused on: (1) the evolution of initiatives in APEC; (2) chairing APEC fora; and (3) developing high-level statements and declarations in March 2017. In addition to implementing the workshop, US-ATAARI also participated in two technical meetings led by other counterparts, including the Australian government.

US-ATAARI also implemented the first Host economy capacity building program for Chile in June. The four-day program included a combination of technical meetings with the APEC Department at the Chile Ministry of Foreign Affairs (DIRECON), a two-day workshop for government officials from relevant line ministries and agencies, a half-day meeting on developing a communications plan, and a half-day meeting with private sector representatives to discuss how they can actively engage in the preparations for APEC 2019. As discussed in the WE-APEC section, US-ATAARI also supported the implementation of a one-day seminar held in September in Washington, D.C. The one-day event focused on the key foundational issues of gender and data, as well as making the business and economic case for investing in women’s economic empowerment, exploring the possibility of this being a theme of Chile’s Host Year.

In August, US-ATAARI participated in a meeting with U.S. Government counterparts and Malaysia’s Senior Official (SOM) to start discussions on a possible Host Year capacity building program to help Malaysia prepare to host APEC in 2020. During the meeting, US-ATAARI presented on the background of the Host Year programs and how they are designed and implemented.

APEC Secretariat Support: US-ATAARI continued its efforts to increase the APEC Secretariat’s ability to be a more effective, efficient and sustainable institution. US-ATAARI is working to transform the APEC Secretariat Process Mapping Exercise’s broad recommendations into detailed implementable solutions focusing on project-related improvements. The first phase of the exercise identified both internal and external processes at the APEC Secretariat across units, staff, and stakeholders. The objective of the second phase, which was launched in 2017, is to leverage this investigation to identify areas where processes can be streamlined, standardized, or substituted by information technology (IT), among other solutions. The implementation plan found significant opportunities to improve efficiency and was presented at the Budget and Management Committee (BMC) meeting at SOM 3 in August. In addition, on July 13, US- ATAARI implemented a three-day APEC Secretariat Annual Staff Retreat in Singapore, focusing on results of an organizational survey and interactive team-building activities that will ultimately feed into Individual Action Plans.

1. INTRODUCTION

Launched November 1, 2013, US-APEC Technical Assistance to Advance Regional Integration (US-ATAARI) is a five-year activity that aims to strengthen the capacity of APEC's foreign-assistance eligible developing member economies to advance regional economic cooperation and address tariff and non-tariff barriers to trade and investment. The activity is implementing interventions that address selected elements that fall under one or more of APEC's three “pillars” (Trade and Investment Liberalization; Business Facilitation; and Economic and Technical Cooperation), and also strengthening the APEC Secretariat's institutional capacity and strategic focus.

US-ATAARI builds upon past assistance provided to APEC by the U.S. Government to assist APEC in achieving its policy objectives by delivering targeted technical assistance, ranging from policy studies and assessments to capacity building, training, and expert advice on integration, trade liberalization and institutional management.

US-ATAARI is managed by USAID’s Asia Bureau with funding and strategic direction from the U.S. Department of State (DOS). It is managed by Chief of Party (COP), Ann Katsiak, and Deputy Chief of Party (DCOP), Mark Walter. The US-ATAARI activity has offices in Washington, D.C., as well as in the APEC Secretariat.

The purpose of this annual report is to present the key achievements for US-ATAARI over the course of its fifth year (January 1, 2017 – December 31, 2017) and will cover both the annual report, as well as the fourth quarter report for October 1, 2017 – December 31, 2017. The annual report includes the following content: status updates on program management tasks;

technical interventions carried out in this report period; and next steps/implementation issues if appropriate. Annex A provides the latest update of the Performance Monitoring Indicators from our M&E Plan. Annex B presents a success story that highlights US-ATAARI efforts with the employment for persons with disabilities workstream. Annex C reports the instances and amounts of approved assistance provided by US-ATAARI to the Government of Burma (GOB).

Annex D details interventions under the Fifth Annual Work Plan that were subject to scheduling delays and/or cancellations.

2. GENERAL PROGRAM

MANAGEMENT

This is the fourth annual report for US-ATAARI and covers program activities from January 1, 2017 to December 31, 2017. Activity interventions carried out in this timeframe fall under the Fifth Annual Work Plan (January – December 2017). Our program management activities have centered on the management of staffing, administration of operations, management of financial resources, and adherence to reporting requirements.

STAFFING

Two positions were phased out in 2017 due to budgetary and programmatic reasons. These include both a DC based trade program coordinator as well as a program manager based in Singapore. In addition to the phasing out Program Coordinator’s term at the end of June, US- ATAARI’s Trade Specialist and Program Manager position also closed at the end of 2017. Please find the US-ATAARI team in Table 2 below.

Table 1: US-ATAARI Personnel

Team Member Responsibilities Start Date

D.C. Office

Ann Katsiak Chief of Party November 1, 2013

Jessica Cross M&E Manager November 1, 2013

Marwa Abdou Program Coordinator September 2, 2014

Tess Perselay Project Coordinator November 1, 2013

Caroline Rubin Program Assistant November 1, 2013

John Lindsay Program Assistant June 20, 2016

Trevor Newton M&E Assistant June 8, 2015

Singapore Office

Mark Walter Deputy Chief of Party June 7, 2016

Nadira Mailewa Economic and Sector Specialist March 2, 2015

Mariella Amemiya Trade Specialist and Program Manager July 12, 2014

Katherine Moon (Katie) Program and Training Specialist June 5, 2016

Siti Mardiana Idrus (Yana) Project Assistant May 19, 2014

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WORK PLAN

Based on extensive consultations with USAID, DOS, and the other U.S. Government agencies that serve as the respective policy leads in relevant APEC fora, US-ATAARI developed its Fifth Annual Work Plan. This included significant revisions due to unexpected budget cuts that, as of the end of this reporting period, were not fully resolved. Having refined to incorporate all feedback and a revised priority list of activities based on the new budget, US-ATAARI submitted its final Fifth Annual Work Plan, which was approved on March 13, 2017 (under ATAARI-17- 017). The 2017 work plan includes interventions laid out in the January 2017 interim work plan (approved under ATAARI-17-001) as well as interventions planned for rest of the calendar year outlined in its final Fifth Annual Work Plan, which was approved on March 13, 2017 (under ATAARI-17-017). US-ATAARI’s 2017 Annual Work Plan covers the entire calendar year and aligns with the APEC schedule (from January to December). The 2017 work plan represents continued efforts to develop longer-term initiatives with a focus on outcomes and development impacts. It was also agreed that in the context of the work plan approval, US-ATAARI would flag any activity that would need to be launched before moving forward until the budget situation was fully resolved.

CONTRACTUAL CHANGES

Effective March 28, 2017, the US-ATAARI contract was officially transferred from USAID Regional Development Mission for Asia (RDMA) based in Bangkok, Thailand to the USAID/Washington (USAID/W) Bureau for Asia, based in Washington, D.C. In keeping with this transition, the Mr. Josh Templeton was replaced as USAID Contracting Officer's Representative (COR) by Mr. Kofi Owusu-Boakye. After the contract transfer, USAID’s Bureau for Economic Growth, Education, and Environment (E3) also became the secondary alternate USAID contact for US-ATAARI activities for the remainder of 2017.

M&E PLAN

The USAID Contracting Officer's Representative (COR), Mr. Kofi Owusu-Boakye, and the USAID E3 APEC and Legal Reform Coordinator, Mr. Nick Klissas, conducted a Data Quality Assessment (DQA) for US-ATAARI in June 2017. The assessment team met with the US- ATAARI M&E team to review the quality of US-ATAARI’s performance data collected against a well-established set of data quality standards and assessed ten of US-ATAARI’s thirteen key performance indicators (KPIs) to determine their validity; reliability; precision; integrity; and timeliness. Discussions during the relevant meetings covered understanding of the indicators, data collection methodology, reporting chain, and supporting documentation. The DQA findings recommended that US-ATAARI explore alternative methodologies to boost response rates to the one-year follow-up surveys, such as contacting participants via telephone or using social media platforms to follow-up with participants, as those identities may be more enduring than official email addresses.

In response to discussions with USAID held in advance of and during the DQA, a revised US- ATAARI M&E Plan was submitted and approved on October 20, 2017.1 Three indicators that had been requested by RDMA to align with their M&E Plan were removed: (i) number of

1 The revised M&E Plan was approved on Oct. 20, 2017 under ATAARI-15-041 MOD 2.

2 . G E N E R A L P R O G R A M M A N A G E M E N T 5 regional institutions with increased ability to promote sustainable and inclusive growth; (ii) number of laws, policies, or procedures drafted, proposed or adopted to promote gender equality at the regional, national or local level; and (iii) number of regional tools, trainings, or platforms. A fourth indicator, (iv), number of days of technical assistance on trade and investment environment provided to counterparts or stakeholders – F indicator No. 4.2.1-20, was removed as the U.S. Department of State retired the indicator.

END OF PROJECT EVALUATION

In October 2017, US-ATAARI launched an end-term evaluation that will examine whether, and to what extent, US-ATAARI met the activity’s objectives during the life of the project. The evaluation will use a standard design based on OECD/DAC principles of relevance, efficacy, efficiency and sustainability. After consultations with USAID, the evaluation will focus on the following activity areas of the project, given that these areas saw robust engagement by the project over its lifespan: trade and investment (with a focus on supply chain connectivity and next generation trade issues), structural reform, and women’s economic empowerment. It is anticipated that a final draft will be submitted to USAID by the end of the first quarter of 2018.

NO-COST ESTENSION

On December 21, 2017, the period of performance for US-ATAARI was extended at no cost for 60 days to the new project completion date of December 30, 2018.

3. STATUS ON WORK PLAN

INTERVENTIONS

US-ATAARI’s work plan interventions are organized under broader programs of related actions.

These program areas include: 1) green growth; 2) trade and investment facilitation; 3) regulatory reform; 4) human security; 5) women’s economic empowerment; and 6) APEC Secretariat and APEC Host Year capacity building. The following section provides an overview of progress made by US-ATAARI in each of the program areas.

PROGRAM AREA 1: GREEN GROWTH

Fossil Fuel Subsidy Reform (FFSR) Fossil fuel subsidies (FFS) incentivize fossil fuel production and consumption, increasing carbon emissions and thwarting efforts to mitigate climate change by making high carbon-emitting fossil fuels cheaper to produce and consume. This distorts comparative costs of renewable energy sources and clean technologies in APEC economies. FFS often contribute to fiscal imbalances and can restrict public investment in development priorities, such as health, education and infrastructure. In 2015, APEC Leaders reaffirmed their commitment from 2009 to “rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption while recognizing the importance of providing those in need with essential energy services.” To support this endeavour, APEC set up a voluntary reporting mechanism that is reviewed annually to assess APEC’s progress toward this goal. An APEC voluntary peer review (VPR) helps APEC economies identify options and disseminate best practices on the reform of inefficient fossil fuel subsidies. APEC economies are in various stages of implementing these reviews, with several either completed or close to completion under APEC or the Group of Twenty (G20). US-ATAARI has been collaborating closely with the U.S. Department of Energy (DOE) and APEC’s Energy Working Group (EWG) to focus efforts that support developing economy peer reviews of inefficient fossil fuel subsidy regimes. These reviews provide in-depth research to track APEC economy progress in phasing out such subsidies and act as a basis future capacity building activities.

Having implemented reviews for Peru in 2014 and the Philippines in 2015, US-ATAARI continued to work with DOE and the Viet Nam Ministry of Industry and Trade (MOIT) on a peer review assessment of Viet Nam. After reviewing the Viet Nam FFS review background report prepared by US-ATAARI experts, the peer review team, comprised of five energy and subsidy specialists,2 conducted the economy-level review in Ha Noi, Viet Nam in February 2017.

The panel met with MOIT, the Ministry of Finance, the Ministry of Transport, and the Ministry

2 The five experts were from the Association of Southeast Asian Nations (ASEAN), Indonesia, the United States, New Zealand, and the International Energy Agency (IEA).

8 A N N U A L R E P O R T : J A N U A R Y 1 , 2 0 1 7 – D E C E M B E R 3 1 , 2 0 1 7 of Planning and Investment to discuss the selected subsidies3 and their efficiency and effectiveness in Viet Nam’s current political and economic environment. The team also met with state-owned enterprises, PetroVietnam; Petrolimex; Electricity Vietnam; and Vinacomin, as well as the Institute of Energy, the Electricity Regulatory Authority of Vietnam, the World Bank Country Director for Viet Nam, and experts with United Nations Development Programme (UNDP). The peer reviewers concluded their trip with a presentation to MOIT on their preliminary findings and recommendations.

Based on these peer review meetings, as well as additional desk research, US-ATAARI developed a draft report that sets forth key findings and a set of consensus-driven recommendations on the subsidies evaluated during the peer review. Specific recommendations include: (1) undertaking an evaluation of the relative costs and benefits of the Petroleum Price Stabilization Fund (PPSF) and determining whether the PPSF is serving its intended purpose; (2) continuing reforms to move toward competitive, cost-reflective, and predictable pricing mechanisms in the energy sector; (3) developing interconnecting and multimodal access to transportation; and (4) forming a working group to discuss the optimal structure and mechanisms to achieve the objective of providing those in need with essential energy services.

Having incorporated feedback received from U.S. Government counterparts, US-ATAARI submitted the final draft report to the General Director of Energy within the Viet Nam MOIT for comment. However, due to a reorganization of Viet Nam’s energy ministry, expected input will be delayed until the first quarter of 2018.

In coordination with the U.S. Department of Energy, DOS, and the U.S. Department of Treasury, US- ATAARI also implemented the APEC Fossil Fuel Subsidy Reform: Workshop on Effective Pricing Mechanisms and Mitigation Strategies in Jakarta, Indonesia in July 2017. Co-sponsored by Mexico, New Zealand, the Philippines, Brunei Darussalam, and Chinese Taipei, the two-day training examined different fiscal instruments for transitioning to market-based pricing and strategies to mitigate their impacts. Participants learned about the status of fossil fuel subsidies and progress on subsidy reform in the APEC region as outlined in an IEA study. Speakers from the International Monetary Fund (IMF) and the Global Subsidies Initiative (GSI) International Institute for Sustainable Development (IISD) presented on FFS reform policy challenges and key ingredients for success as well as effective pricing mechanisms, including automatic pricing mechanisms.

Attendees also learned about mitigation strategies for managing the impacts of reforms, looking at how to understand the impacts on the most vulnerable populations and properly targeting assistance. Several APEC economies,4 as well as India and Armenia, provided case studies on reform efforts. Key takeaways from the workshop included highlighting the recent progress on subsidy reform across the region, particularly on transport oil subsidies, and the knowledge that

3 The four subsidy areas selected for review are: (1) Petroleum Price Stabilization Fund (PPSF); (2) implicit subsidies in the energy sector for state-owned enterprises (SOEs); (3) bus ridership subsidies in Ha Noi, Ho Chi Minh City and Da Nang; and (4) electricity subsidies for the poor.

4 The five economies were Indonesia, the Philippines, Chinese Taipei, Thailand, and Viet Nam.

a majority of subsidies in the APEC region are now in the residential sector, specifically for electricity, gas, and liquefied petroleum gas. The primary challenges are to make all reforms resilient to price increases through effective pricing mechanisms, implementation of targeted mitigation measures and far-reaching communication strategies to ensure their acceptance and sustainability.

STATUS: In progress

DELIVERABLES DURING

THIS REPORT PERIOD:

Completed and circulated background report to Viet Nam FFS peer reviewers in advance of their in-field assessment

Conducted Viet Nam FFSR peer review

Implemented the APEC Fossil Fuel Subsidy Reform: Workshop on Effective Pricing

Mechanisms and Mitigation Strategies” in July 2017; circulated outcomes report

RESULTS/NEXT STEPS: Finalize Viet Nam FFSR peer review report

Clean Energy Investments with Life-Cycle Impact Assessments US-ATAARI’s clean energy work supports the implementation and development of cleaner power generation technologies in APEC economies, using impact assessments as a key tool to demonstrate clean energy’s significance as a solution to growing energy needs. Building or retrofitting a power plant is a long-term investment and additional costs derived from environmental and health impacts, such as carbon intensity of various types of fuel and emissions from different types of power plants, are not always factored into the decision-making process.

Thus, policy opportunities to implement cleaner technologies for more efficient generation to mitigate these types of indirect costs can be lost.

To address these issues, US-ATAARI collaborated with the U.S. Department of Energy (DOE) and the U.S. Department of State (DOS) to organize a workshop to provide capacity building and share tools to assess the connection between health and environmental impacts resulting from power generation investment decisions. As the second event of a two-part series co-sponsored by APEC and ASEAN, entitled “Trainings in Renewable Energy Best-Practices:

Procurement, Contracts, Life-Cycle Cost Analysis, and Risk Mitigation to Mobilize Private Investment,” US-ATAARI implemented the “APEC Making the Case for Clean Energy Investments with Life-Cycle Impact Assessments Workshop” in Kuala Lumpur, Malaysia in October 2017. The US-ATAARI training component provided decision-makers, comprised mainly of officials from energy and finance ministries, with relevant context on lifecycle impact assessments and available tools to consider the environmental and health impacts when deciding how to proceed with investments. The event also built capacity on specific social impacts across the lifecycle of an investment, available tools and datasets for estimating the extent and cost of such impacts, and strategies for applying impact assessments to drive cleaner energy decision-making.

The workshop represented a successful collaboration between APEC and ASEAN, with connections made between participants and speakers representing different economies and diverse technical backgrounds including regulators, policymakers, and utilities and finance representatives. US-ATAARI is working with the U.S. to explore a possible follow-on joint APEC-ASEAN workshop

Source: Clean Energy Investments…