USATAARI_annual-report-2015.pdf

January 2016

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

ANNUAL REPORT: JANUARY 1,

2015 – DECEMBER 31, 2015

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

ATAARI-16-008

ANNUAL REPORT: JANUARY 1,

2015 – DECEMBER 31, 2015

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 ix

Key Achievements: January 1, 2015 – December 31, 2015 ix

1. Introduction 1

2. General Program Management 3

Staffing 3

Work Plan 4

M&E Plan 5

Web Portal 5

3. Status on Work Plan Interventions 6

Program Area 1: Green Growth 6

Program Area 2: Trade and Investment Facilitation 10

Program Area 3: Regulatory Reform 15

Program Area 4: Human Security 22

Program Area 5: Women’s Economic Empowerment 36

Program Area 6: Host Year Capacity Building and APEC Secretariat 43

4. Conclusion 49

Annex A: Progress Summary 51

Annex B: Success Stories 55

Annex C: US-ATAARI Assistance to the GOB 57

Annex D: 2015 Outstanding Activities 58

ACRONYMS

A2C2 APEC Alliance for Supply Chain Connectivity AAAP Peruvian Customs Agents Association ABAC APEC Business Advisory Council ACTWG Agricultural Technical Cooperation Working Group AFAM Airfreight Forwarders Association of Malaysia AHC APEC Harmonization Center AMR Antimicrobial Resistance APEC Asia-Pacific Economic Cooperation API Advance Passenger Information AR Advance Rulings ASEAN Association of Southeast Asian Nations ATWG Agricultural Technology Working Group CAPEC Conference of Asia Pacific Express Carriers CBP Customs and Border Protection (DHS) CD Chemical Dialogue COP Chief of Party COR Contracting Officer's Representative (USAID) CPAU Communications and Public Affairs Unit CSA Climate Smart Agriculture CSOM Concluding Senior Officials Meeting CTI Committee on Trade and Investment CT/ST Counter-Terrorism and Secure Trade CTTF Counter-Terrorism Task Force CTWG Counter-Terrorism Working Group DCOP Deputy Chief of Party DHS Department of Homeland Security (U.S.)

DOC Department of Commerce (U.S.)

DOS Department of State (U.S.)

DOT Department of Transportation (U.S.)

DQA Data Quality Assessment E3/TRR Bureau for Economic Growth, Education, and Environment’s Office of Trade and Regulatory Reform (USAID) EAP/EP Office of Economic Policy in the Bureau of East Asian and Pacific

Affairs (DOS) EC Economic Committee ED Department of Education (U.S.)

ED Executive Director EDNET Education Network EGS Environmental Goods and Services

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EoDB Ease of Doing Business EPA Environmental Protection Agency (U.S.)

EPWG Emergency Preparedness Working Group ERTF Emergency Response Travel Facilitation EWG Energy Working Group FAO Food and Agriculture Organization of the United Nations FAQ Frequently Asked Question FDA Food and Drug Administration (U.S.)

FFSR Fossil Fuels Subsidy Reform FSCF Food Safety Cooperation Forum FSANZ Food Standards Australia New Zealand FTA Free Trade Agreement FTF Foreign Terrorist Fighter G20 Group of Twenty GOB Government of Burma GRP Good Regulatory Practice HAI Healthcare Associated Infection 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 HWG Health Working Group IADB Inter-American Development Bank ICAO International Civil Aviation Organization IEA International Energy Agency IFC International Finance Corporation IPC Infection Prevention and Control IPEG Intellectual Property Rights Experts Group ISOM Informal Senior Officials’ Meeting ITIP Integrated Trade Information Portal KPI Key Performance Indicator LSIF Life Sciences Innovation Forum MCC Millennium Challenge Corporation M&E Monitoring and Evaluation MFA Ministry of Foreign Affairs (Peru) MITI Ministry of Trade and Industry (Malaysia) MOFA Ministry of Foreign Affairs (Viet Nam) MRL Maximum Residue Limit MSME Micro, Small and Medium Enterprise MYP Multi-Year Project NCI Natural Coastal Infrastructure NGO Non-Governmental Organization NOAA National Oceanic and Atmospheric Administration NPS New Payment Systems NTB Non-tariff Barrier

A C R O N Y M S V I I

NTM Non-tariff Measure OECD Organisation for Economic Co-operation and Development OFDA Office of Foreign Disaster Assistance (USAID) OFWG Oceans and Fisheries Working Group OPSF Oil Price Stabilization Fund PAP Pre-arrival Processing PCCI Philippine Chamber of Commerce Industry PDOE Philippine Department of Energy PHL Post-Harvest Loss PIRS Performance Indicator Reference Sheets PNR Passenger Name Record PPEGS Public-Private Partnership on Environmental Goods and Services PPFS Policy Partnership on Food Security PPP Public-Private Partnership PPWE Policy Partnership for Women and the Economy PSU Policy Support Unit PTAP Public Transport Assistance Program PTIN Partnership Training Institute Network RDMA Regional Development Mission for Asia (USAID) RHSC Regulatory Harmonization Steering Committee RMCD Royal Malaysia Customs Department SCE Steering Committee on Economic and Technical Cooperation SCSC Subcommittee on Standards and Conformance SELI Strengthening Economic and Legal Infrastructure SGF Self-Generating Facility SME Small and Medium Enterprise SMEWG Small and Medium Enterprise Working Group SOM Senior Officials’ Meeting SOP Standard operating procedures SRMM Structural Reform Ministerial Meeting SSFFC Spurious, Substandard, Falsified, Falsely-Labeled and Counterfeit STEAM Science, Technology, Engineering and Mathematics STEM Science, Technology, Engineering and Mathematics SUNAT Superintendencia Nacional de Administración Tributaria TA Technical Assistance TFA Trade Facilitation Agreement TMM Transportation Ministerial Meeting TPTWG Transportation Working Group TSA Transportation Security Administration (U.S.)

UC Universal Charge UNCITRAL United Nations Commission on International Trade Law UNCTAD United Nations Conference on Trade and Development UNESCO United Nations Educational, Scientific and Cultural Organization USAID United States Agency for International Development US-ATAARI US-APEC Technical Assistance to Advance Regional Integration

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USTR Office of the United States Trade Representative VAT Value-added Tax WCO World Customs Organization WCS Wildlife Conservation Society WE-APEC Women’s Entrepreneurship in APEC WEF Women in the Economy Forum WiSci Women in Science WiT Women in Transportation WITS World Integrated Trade Solutions WTO World Trade Organization

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

EXECUTIVE SUMMARY

The US – APEC Technical Assistance to Advance Regional Integration (US-ATAARI) team is pleased to present its second annual report covering activity interventions implemented January 1, 2015 – December 31, 2015 from the Third Annual Work Plan.

The seventh quarter saw heavy implementation of activities under all of US-ATAARI’s program areas. US-ATAARI also began working with RDMA to discuss potential interventions and planning for 2016. Key achievements that occurred during this reporting period are described in brief below. Progress during this period on key performance indicators (KPIs) is briefly reported in Table 1, with a more 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, 2015 – DECEMBER 31,

In 2015, US-ATAARI coordinated with 27 APEC government agencies to develop and implement 64 interventions on a range of technical issues. The team produced 12 technical reports and implemented 29 workshops, thereby training 1,603 participants.

Key achievements under each program area included:

Program Area 1: Green Growth

• Fossil fuels subsidies reform: In support of APEC achieving its goal to phase out inefficient fossil fuel subsidies, US-ATAARI launched a fossil fuels subsidies peer review of The Philippines using the approach piloted in Peru last year. The resulting report, which will be finalized in 2016, will provide The Philippines with concrete recommendations on ways to reform their fossil fuel subsidy programs as well as allow for more consistent metrics for reporting on reform efforts. US- ATAARI also implemented a workshop to review progress made on APEC Leaders’ commitment to phasing out inefficient fossil fuel subsidies.

Program Area 2: Trade and Investment Facilitation

• Supply chain connectivity: US-ATAARI supported the work of the APEC supply chain connectivity initiative within APEC, through several capacity building programs in partnership with volunteer economies. US-ATAARI completed economy-level assessments on pre-arrival processing (PAP) in Peru and Malaysia as well as an assessment on advance rulings (AR) in Malaysia. Further, US-ATAARI worked with Peru to implement recommendations and build upon the assessment report, leading to key changes in its customs law. US-ATAARI also

X A N N U A L R E P O R T : J A N U A R Y 1 , 2 0 1 5 – D E C E M B E R 3 1 , 2 0 1 5 supported the APEC Alliance for Supply Chain Connectivity (A2C2) throughout its first 18 months of existence, including throughout this entire reporting period, bringing together representatives of both the public and private sector to review supply chain initiatives within APEC and to establish a dialogue on its capacity building work. US-ATAARI supported two such dialogues this year, in May and August.

Program Area 3: Regulatory Reform

• Ease of Doing Business (EoDB) work: In 2015, US-ATAARI continued to manage the EoDB Multi-year Project (MYP) to support the development of capacity building activities under the APEC EoDB Action Plan, in coordination with champion and volunteer economies. US-ATAARI contributed to the development of the Post-2015 EoDB Agenda by drafting the Second EoDB Action Plan and implementing two workshops: “UNCITRAL Instruments and the Ease of Doing Business Initiative” and the “2015 EoDB Workshop: Preparation for the Second EoDB Action Plan” which aimed to identify specific capacity building and technical assistance activities to be used as inputs for the EoDB Implementation Plan.

Program Area 4: Human Security

• Supply chain resilience: Building on global supply chain resilience work within

APEC over the last three years, US-ATAARI implemented two activities this year focused on promoting approaches that empower governments and the private sector to bolster the resilience of supply chains, including through the use of hazard mapping technologies. First, a three-day APEC-wide event in Peru focused on improving resilience of global supply chains through promoting disaster risk management and hazard mapping to better understand potential risks to the supply chain. Participants expanded skills in using risk modelling and hazard mapping to promote supply chain resilience through extensive and personalized interaction with the developers and users of several risk mapping and modelling systems. Secondly, in The Philippines, US-ATAARI worked largely with the Philippines Department of Trade and Industry and the Philippines Department of Transportation, as well as others from smaller agencies and companies, to explore domestic issues of supply chain resilience. After an explanation of various tools, best practices, and innovations to participants from small and large business, local and central government, industry groups, and civil society, a smaller group of participants spent one and a half days exploring potential actions and activities the Philippines may take to address its supply chain resilience vulnerabilities. By the end of the dialogue, participants had identified 13 activities across the 7 APEC Principles of Supply Chain Resilience, potientially focusing their domestic supply chain resilience work in 2016.

Program Area 5: Women’s Economic Empowerment

• APEC Women in Transportation (WiT) initiative: In 2015, US-ATAARI developed the WiT Data Framework and Best Practices Report in coordination

E X E C U T I V E S U M M A R Y X I with the WiT Task Force, which was endorsed by APEC Leaders in November 2015. The report summarized what APEC economies, public and private sectors are currently doing to increase women’s employment in the transportation sector.

US-ATAARI presented the findings of the report a high-level stakeholder meeting that focused on WiT initiatives in July 2015; and in building on the reports’ findings implemented the APEC WiT Forum: Navigating a Way Forward in October 2015 on the margins of the APEC Transportation Ministerial Meeting

(TMM).

• Women’s Entrepreneurship in APEC (WE-APEC) initiative: Building on the completion of the 2015 WE-APEC Regional Gap Analysis Report, US-ATAARI implemented a workshop focused on the WE-APEC initiative in June 2015, during which US-ATAARI presented a mock-up of the WE-APEC platform for feedback from APEC members. In September 2015, during the AEPC Policy Partnership for Women and the Economy (PPWE) meetings, US-ATAARI formally launched the full beta version of the WE-APEC platform, which serves not only as an information repository of entities that provide services to women entrepreneurs throughout the region, but also as a networking mechanism for women-owned businesses, private sector companies that have initiatives that target women-entrepreneurs and governments that target women-owned businesses

Program Area 6: Host Year Capacity Building and APEC Secretariat

• APEC host year capacity building: Developing APEC member economies will be hosting APEC from 2015 – 2020. In 2015, US-ATAARI worked with Peru (2016), Viet Nam (2017), and Papua New Guinea (2018) to design capacity building programs aimed to increase their understanding of APEC and thus engagement in APEC in the lead up to and during their host years. All of these activities served to better equip domestic line ministries with the knowledge and understanding of APEC to better engage and shape APEC’s policy priorities in upcoming years.

Table 1 Summary of Results to Date1

Indicator Base-line

Actual

FY14

Actual

FY15

Target

FY16

Actual

FY16

Q1

OC1: Percentage of workshop or training participants whose capacity has increased as a result of US-ATAARI training/workshops

0 N/A 75% 80% 84%

1 Per the Performance Indicator Reference Sheets (PIRSs) appended to the approved Monitoring and Evaluation (M&E) Plan, US-ATAARI performance data is reported in accordance with the U.S. government fiscal year, which covers a 12-month period beginning October 1 and ending the following September 30.

US-ATAARI’s work plan and reporting year is by calendar year.

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Indicator Base-line

Actual

FY14

Actual

FY15

Target

FY16

Actual

FY16

Q1

OC2: Percentage of participants in U.S.-funded APEC capacity building activities responding that they applied trade and investment liberalization practices

0 N/A 82% 50% 79%

OC3: Number of participants in U.S.-funded APEC capacity building activities responding that changes in laws, regulations, or processes in their home economy were influenced by the trade and investment liberalization practices shared

0 N/A 24 3% 5

OC4: Percentage of participants in U.S.-funded APEC capacity building activities responding that changes in laws, regulations, or processes in their home economy were influenced by the trade and investment liberalization practices shared

0 N/A 30% 3% 50%

OT1: Number of studies produced on trade- and investment-related issues

0 15 14 18 3

IN1: Number of days of technical assistance (TA) on trade and investment environment provided to counterparts or stakeholders

0 1,297 2,095 2,200 536

IN2: Person-hours of training in trade and investment capacity building supported by USG assistance

0 13,960 17,022 25,000 3,756

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 the Asia-Pacific Economic Cooperation (APEC) Secretariat and APEC’s foreign-assistance eligible developing member economies to advance regional economic integration and achieve the Bogor Goals of free and open trade and investment in the region. 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 co-managed by USAID’s Regional Development Mission for Asia (RDMA) and the Washington-based Bureau for Economic Growth, Education, and Environment’s Office of Trade and Regulatory Reform (E3/TRR) with funding and strategic direction from the U.S. Department of State (DOS). It is managed by Chief of Party (COP), Victoria Waite, and Deputy Chief of Party (DCOP), Ann Katsiak. The US-ATAARI activity is housed in the APEC Secretariat and also has resident staff in Washington, D.C. based at Nathan Associates Inc. headquarters.

The purpose of this annual report is to present the key achievements for US-ATAARI over the course of its second year (January 1, 2015 – December 31, 2015) and will cover both the annual report as well as the fourth quarter report for October 1, 2015 – December 31, 2015. 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 two success stories that highlight US-ATAARI efforts to support Peru in expanding its PAP program to meet international standards and US-ATAARI’s efforts to promote reform in targeted EoDB reform areas. 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 Second Annual Work Plan that were subject to scheduling delays and/or cancellations.

2. GENERAL PROGRAM

MANAGEMENT

This is the second annual report for US-ATAARI and covers program activities from January 1, 2015 to December 31, 2015. Activity interventions carried out in this timeframe fall under the Third Annual Work Plan (January – December 2015). Our program management activities have centered on the expansion of staffing, management and administration of operations, management of financial resources, and adherence to reporting requirements.

STAFFING

US-ATAARI’s offices remained fully staffed through the year, with a couple of changes to note. Due to the resignation of Economic and Sector Specialist Mr. Kyle Hathaway in January 2015, US-ATAARI conducted a rigorous recruitment process and identified a suitable replacement in Ms. Nadira Mailewa. Upon arrival to the Singapore office in early March, Ms. Mailewa assumed responsibility for several activity interventions, including those being implemented under wildlife trafficking, food security, and healthcare acquired infections. Given US-ATAARI’s commitment to ensuring that M&E is properly emphasized during activity implementation and reflecting the robust 2015 work plan, US-ATAARI proposed to USAID to add one additional technical position, an M&E Assistant, to be based in the DC office. The M&E Assistant focuses primarily on supporting implementation of the M&E plan, including data collection and quality control, and supporting the M&E Manager. Following a rigorous recruitment process, US-ATAARI selected Mr. Trevor Newton as best-suited to fill this new position. Mr.

Newton formally commenced his assignment in early June. US-ATAARI continues to discuss possible staffing developments in light of growing work requests and will continue these consultations with USAID as the project progresses. Please find the US- ATAARI team in Table 2 below.

Table 2: US-ATAARI Personnel

Team Member Responsibilities Start Date

Singapore Office

Victoria Waite Chief of Party January 1, 20142

2 Victoria Waite completed her previous assignment as Chief of Party (COP) of the APEC Technical Assistance and Training Facility on December 31, 2013, and formally assumed the role of COP on US-ATAARI on January 1, 2014.

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Nadira Mailewa Economic and Sector Specialist March 2, 2015

Mariella Amemiya Trade Specialist and Program Manager July 12, 2014

Amna Bajwa Program and Training Specialist November 1, 2013

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

DC Office

Ann Katsiak Deputy Chief of Party November 1, 2013

Jessica Cross M&E Manager November 1, 2013

Marwa Abdou Trade Specialist and Program Coordinator

September 2, 2014

Tess Perselay Program Coordinator (part-time) November 1, 2013

Caroline Rubin Program Assistant (part-time) November 1, 2013

Ekaterina Lvin Program Assistant (part-time) March 5, 2015

Trevor Newton M&E Assistant June 8, 2015

WORK PLAN

The US-ATAARI team worked closely with USAID, State’s Office of Economic Policy in the Bureau of East Asian and Pacific Affairs (EAP/EP) and other U.S. government counterparts to develop the Third Annual Work Plan (January-December 2015). The team also held consultations with the APEC Secretariat for activities related to program area 6. The work plan went through several rounds of revisions in early 2015 incorporating input from these counterparts. US-ATAARI submitted a final version of the work plan to USAID on May 11. The work plan received approval from USAID in late May (under ATAARI-15- 043).

In an effort to begin consultations earlier for Fourth Annual Work Plan development, US- ATAARI held initial discussions on its development with USAID counterparts on the margins of the Third Senior Officials' Meeting (SOM 3) in August 2015. The 2016 work plan will cover January-December 2016. As a first step, US-ATAARI developed preliminary budget estimates for proposed work plan submissions received from U.S.

government agencies, as well as a brief gender impact matrix to align with the various 2016 work plan proposals. In late November/early December 2015, US-ATAARI attended a series of meetings with representatives from USAID/RDMA, USAID Washington as well as representatives from a range of U.S. government agencies. These meetings provided an opportunity for various agencies to discuss their priorities and work within APEC, and also provide specific details on requests and proposals for the 2016 work plan. As the 2016 annual work plan continues to be refined, with submission and approval by the end of January 2016, US-ATAARI finalized an interim work plan for the month of January 2016 (under ATAARI-15-119), which details interventions expected to continue or start early in the year.

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

M&E PLAN

US-ATAARI continued to revise the M&E Plan per consultations with USAID/RDMA and USAID/Washington. Discussions focused on clarifying such components as the KPIs, third-party reference data and budget allocated to M&E. The team submitted the final M&E Plan on May 8, 2015 and received approval from USAID in late May (under ATAARI- 15-041). Alongside the final M&E Plan, US-ATAARI also submitted its draft M&E questionnaires and standard operating procedures (SOPs) to USAID for review. In order to ensure maximum capacity and attention to rigorous implementation of the M&E Plan, the M&E Senior Adviser and M&E Manager trained relevant US-ATAARI staff, including the newly hired M&E Assistant, on the SOPs and the processes for data collection on the KPIs. Moreover, M&E responsibilities were integrated into job descriptions of all staff responsible for collecting data.

US-ATAARI rolled out its full system, with an initial focus on testing survey instruments, streamlining data collection processes, and refining its analytical and reporting products.

The team compiled both retroactive and current data to populate its repository and ensure the availability of data for US-ATAARI performance indicators since activity inception in November 2013. As USAID needed to conduct a required data quality assessment (DQA) in advance of its annual reporting cycle, the USAID’s alternate Contracting Officer's Representative (COR), based in DC, along with a USAID M&E Specialist met with the US-ATAARI M&E team and its DCOP in August 2015 to review the quality of US-ATAARI’s performance data collected thus far against a well-established set of data quality standards and assessed each of US-ATAARI’s eleven KPIs to determine their validity; reliability; precision; integrity; and timeliness. Discussions during the full-day meeting covered understanding of the indicators, data collection methodology, reporting chain, and supporting documentation.

WEB PORTAL

US-ATAARI officially launched its web portal (www.usataari.com), which is intended to facilitate communication with USAID and other project stakeholders on activity implementation, on a live server in March 2015. The portal is structured as follows: (1) an internal section to the project that stores dynamic documents such as a project calendar, work flow matrices, technical documents in development, and communications materials on project activities, among others; and (2) an external portion for the broader U.S.

government community that houses documents such as project reports, technical deliverables, and workshop summary evaluations organized by program area. This external portion also serves as an organizational platform for events being implemented by US-ATAARI in collaboration with U.S government counterparts. As of report submission, the web portal houses 1,318 documents and 36 galleries containing 580 workshop photos.

http://www.usataari.com/

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 Fuels Subsidy Reform (FFSR) Peer Reviews Inefficient fossil fuel subsidies can distort the market, undermine development of clean and renewable energy, encourage wasteful consumption of fossil fuels, and are often quite costly to governments without properly targeting the vulnerable poor. To address these challenges, since 2009, APEC Leaders have annually committed “to rationalize and phase out inefficient fossil-fuel subsidies that encourage wasteful consumption, while recognizing the importance of providing those in need with essential energy services.” In 2011, APEC Leaders went further by agreeing to set up a “voluntary reporting mechanism” to annually review APEC’s progress toward this goal. The APEC Energy Working Group (EWG) is carrying out this mandate by undertaking peer reviews of inefficient FFS in volunteer economies, tracking APEC economy progress in phasing out such subsidies, and holding capacity building workshops to address issues related to inefficient fossil fuel subsidies. Some APEC economies have volunteered to undergo peer reviews either on their own, subscribe to APEC’s peer review process, or have committed to a similar corresponding and complimentary process within the Group of Twenty (G20).

US-ATAARI is supporting the implementation of developing volunteer economies to implement the review process. Having worked with the APEC EWG to develop APEC’s guidelines for review in 2013 and subsequently completed the first peer review process in Peru in 2014, US-ATAARI launched a peer review assessment of the Philippines in November 2015. US-ATAARI served as the “Secretariat” to the peer review process, guiding peer reviewers and the volunteer economies. Having coordinated with the Philippine Department of Energy (PDOE) to finalize the agenda, the peer review team, which included four experts from the U.S., Indonesia, New Zealand, and the International Energy Agency (IEA), conducted the in-country portion of the review in early December.

Meetings were held with public and private sector stakeholders, including representatives from the different governmental departments – Energy, Finance, Labor and Employment, Transportation and Communication, Trade and Industry, and the National Economic Development Authority as well as representatives from renewable energy and oil and electric companies. Having gathered data on the five selected subsidies,3 the team presented its preliminary findings and recommendations to representatives from the Philippine Chamber of Commerce Industry (PCCI) and the PDOE. As the PDOE Secretary and the PCCI representatives seemed to be in broad agreement with the review findings and recommendations, the team continues to work on the final report with the aim submission to the Philippines for review, feedback, and approval by early February 2016.

Coupled with supporting the review process, US-ATAARI also worked to build the capacity of all APEC economies to move towards meeting APEC Leaders’ commitment to phasing out inefficient fossil fuel subsidies. On December 14-15, 2015, US-ATAARI implemented the “APEC Fossil Fuel Subsidy Reform Capacity Building Workshop” in Honolulu, Hawaii. Attended by 64 representatives from 18 APEC member economies as well as international organizations, the workshop aimed to help participants understand the impact of their fossil fuel subsidy programs and policies and identify effective ways to pursue reform while providing essential energy services to those in need. The first day examined the impact of inefficient fossil fuel subsidies and the methodologies to measure and quantify subsidies. Representatives from Thailand, Indonesia, Mexico, The Philippines, Peru, and Viet Nam shared their experiences with domestic subsidy reform efforts and FFSR peer reviews in the APEC or G20 review process. The second day focused on identifying recommendations for phasing out inefficient subsidies through pricing mechanisms, managing impacts, and communication strategies. At the workshop’s conclusion, participants agreed that fossil fuel subsidies are a barrier to clean energy development, peer reviews are a useful tool for identifying options for reform, and extensive and open communication across the government and involvement of all stakeholders, including the private and public sectors, are key to successful reform.

STATUS: In progress.

DELIVERABLES DURING

THIS REPORT PERIOD:

• Conducted in-country assessment for FFSR Philippines peer review and presented initial results and recommendations to the PCCI and PDOE in December 2015.

• Implemented the “APEC Fossil Fuel Subsidy Reform Capacity Building Workshop” in December 2015.

RESULTS/NEXT STEPS: • Finalize and submit the FFSR peer review and draft report on the Philippines, incorporating any feedback received from Philippine counterparts.

3 The five subsidies selected for review are: (1) the oil price stabilization fund (OPSF), a government program to fix domestic oil prices, that is no longer in effect; (2) the Pantawid Pasada or Public Transport Assistance Program [3 [continued] (PTAP), a short-lived, inactive program to provide subsidized diesel and gasoline to public transit operators; (3) RVAT law excise tax exemptions, a current policy designed to relieve certain ‘socially sensitive’ fossil fuels from domestic excise taxes to offset application of the national value-added tax (VAT); (4) Missionary Electrification subsidies to fund grid expansion and to lower the consumer tariffs for expensive remote electricity grids (as these grids are usually dominated by oil and diesel fuel, the grid extension subsidy is a heavy implicit fossil fuel subsidy); and (5) Exemption of Self-generating facilities (SGFs) from the Universal Charge. The Universal Charge (UC) is the electricity rate surcharge assessed on all non-subsidized ratepayers, both residential and commercial; SGFs are industrial and commercial users who generate their own electricity. In most cases this electricity is from fossil fuels, resulting in a ratepayer preference regime for these producers that advantages fossil fuel-fired power generation.

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• Undertake an additional economy-level FFSR peer review.

• Support follow-on activities designed to help economies enact recommendations set out in the peer reviews.

Assessing the Economic Value of Green Infrastructure in Coastal Ecosystems The APEC region is particularly vulnerable to the impacts of natural disasters, which can have devastating effects and incur large economic costs to respond and rebuild. Some of these impacts and costs may be reduced through science-based management of ocean and coastal ecosystems and informed decisions on green infrastructure management and development. While there is recognition within APEC that green infrastructure in coastal ecosystems provides some level of protection against disasters and can contribute to restoration efforts, there is a lack of knowledge on the economic value of services provided by green infrastructure to help policy leaders make informed decisions.

The “Study on Assessing the Economic Value of Green Infrastructure in Coastal Ecosystems to Disaster Risk Reduction, Response and Coastal Resilience in APEC Region” will address this need by increasing understanding as to the value of green infrastructure to support policy makers in better evaluating the impact of green infrastructure development and management, and the development of disaster risk reduction and response and coastal resiliency strategies. In particular, many agencies in developing APEC member economies could benefit from the information provided in this study, as it can help inform decisions regarding where to prioritize resources and make stronger justifications to legislative bodies for work related to disaster resilience and response and conservation of critical ecosystem services.

As a first step in developing the study, US-ATAARI, working with the National Oceanic and Atmospheric Administration (NOAA), DOS and USAID, designed a survey to collect information from APEC economies and identify critical knowledge gaps and regulatory barriers for valuing ecosystem services provided by green infrastructure in coastal ecosystems, especially as pertaining to reducing disaster risk and enhancing coastal resiliency. The survey covered topic areas including natural coastal infrastructures (NCIs) present in each economy, databases that capture knowledge regarding NCIs, the role of NCIs in protecting against disaster risks and events, as well as assessing the value of NCIs. Through the survey, the expert team also requested additional information or resources that member economies may wish to contribute for the study so that the study is as comprehensive as possible and builds on existing knowledge. US-ATAARI circulated the final survey to the Oceans and Fisheries Working Group (OFWG) as well as the Emergency Preparedness Working Group (EPWG) in late 2015. The team also conducted background research and a literature study on valuation of green infrastructure in coastal ecosystems in APEC region. As to next steps, US-ATAARI will develop the gap analysis report based on the results of the survey and the literature review as well as a valuation study of green infrastructure in coastal ecosystems in APEC that will aim to fill the knowledge gaps.

STATUS: In progress.

DELIVERABLES DURING

THIS REPORT PERIOD:

• Conducted background research and literature study on valuation of green infrastructure in coastal ecosystems in APEC region.

• Designed and distributed an online survey of APEC economies through relevant

APEC working groups to identify the critical knowledge gaps and regulatory barriers for valuing the ecosystem services that green infrastructure provide.

RESULTS/NEXT STEPS: • Develop the gap analysis report based on the results of the literature review and the survey.

• Conduct an assessment of the economic value of services provided by green infrastructure in coastal ecosystems for the purposes of disaster risk reduction and response and coastal resilience in the APEC region

Environmental Goods and Services (EGS) The EGS industry is devoted to solving, limiting, and preventing environmental problems.

EGS companies may be involved in manufacturing goods or providing services related to water or air pollution, waste management, renewable energy, monitoring, analysis and assessment, among other areas. The development of an EGS industry in developing economies is instrumental to eliminating preventable diseases, enhancing quality of life, protecting natural resources, and attracting in-bound investment. APEC has recognized that an open global trade and investment system is necessary for increased use of EGS and has emerged as a leader in promoting EGS trade. In 2011, APEC Leaders agreed to undertake a set of concrete actions to promote trade and investment in EGS, to eliminate non-tariff barriers (NTBs) that distort trade and investment in EGS, including local content requirements, and to promote transparency and regulatory coherence and cooperation in areas affecting environmental goods. In 2014, APEC launched the Public- Private Partnership on Environmental Goods and Services (PPEGS) to “promote dialogue among public and private sector stakeholders on ways to address trade and investment in EGS, with a view to achieving green growth and sustainable development in the APEC region.”

US-ATAARI, in coordination with the United States Trade Representative (USTR), implemented a PPEGS Dialogue on the margins of the SOM 2 in Boracay Island, Aklan, Philippines in May 2015. Taking advantage of the significant work on NTBs by APEC and other international organizations, such as the World Trade Organization (WTO), the Organisation for Economic Co-operation and Development (OECD), and the United Nations Conference on Trade and Development (UNCTAD), the one-day dialogue concentrated on an exchange of private sector and government experiences and lessons learned with respect to addressing NTBs and facilitating trade in EGS. Attended by 35 participants from 16 member economies, the PPEGS dialogue also highlighted specific success stories and case studies with respect to addressing NTBs, including by exploring how economies identified and addressed relevant NTBs, and evaluated the economic and environmental benefits that emerged from addressing particular NTBs. Input offered by attendees helped to inform discussions in APEC’s Committee on Trade and Investment (CTI) on ways APEC can build on the 2011 Leaders commitment to reduce applied tariffs on environmental goods to five percent or less by the end of 2015.

STATUS: Complete.

DELIVERABLES DURING

THIS REPORT PERIOD:

• Implemented the one-day PPEGS Dialogue on the margins of SOM 2 in May 2015.

RESULTS/NEXT STEPS: • None identified at this time.

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Wildlife Trafficking Wildlife trafficking, like other forms of illicit trade, threatens security and the rule of law, undermines conservation efforts, robs local communities of their economic base, disrupts global markets, and contributes to the emergence and spread of disease.

Trafficking in wildlife poses a serious threat not only to biodiversity and wildlife populations but also to sustainable development and global security. The threats and harm associated with wildlife trafficking are not geographically isolated; trafficking is responsive to global supply and demand, and thus can have global repercussions. By inherently compromising the health of ecosystems and the livelihoods natural resource dependent communities, it undermines sustainability of economic development. Illicit trade is incompatible with good governance and the rule of law and undermines law enforcement, legislative networks, trade security and economic development. Combating this illicit trade and attendant criminal networks in the APEC region is only possible through coordinated action to reduce demand, develop legal frameworks, and improve wildlife range states’ ability to protect their borders and their natural resources.

Building on a previous US-ATAARI October 2014 wildlife trafficking workshop, which focused on building the capacity to develop and implement demand reduction campaigns across APEC economies, US-ATAARI, in partnership with DOS and U.S.

Customs and Border Protection (CBP), implemented a two-day APEC Workshop on Wildlife Trafficking-Related Customs Best Practices on the margins of SOM 3 in August 2015. Attended by thirty-six government officials from customs agencies involved in the technical and operational aspects of wildlife trafficking in 13 member economies, the workshop focused on increasing awareness of customs-related best practices and approaches, including search and seizure techniques, inspection and identification, evidence handling, and information sharing on relevant tools and techniques. With presentations and moderated panels featuring experts from various member economy government ministries, and organizations such as the World Customs Organization (WCO), the Wildlife Conservation Society (WCS), the workshop built participants’ capacity to better inspect, identify, investigate and manage cases of wildlife trafficking.

STATUS: Complete.

DELIVERABLES DURING

THIS REPORT PERIOD:

• Implemented the two-day APEC Workshop on Wildlife Trafficking-Related Customs Best Practices on the margins of SOM 3 in August 2015.

RESULTS/NEXT STEPS: • None identified at this time.

PROGRAM AREA 2: TRADE AND INVESTMENT FACILITATION

Supply Chain Connectivity Capacity Building Improving supply chain performance in the Asia-Pacific will drive economic growth, strengthen and deepen regional economic integration, and increase trade and investment. Economies that offer the most efficient platforms to do business are most likely to take advantage of the productivity enhancements, workforce upgrading, employment opportunities, and hence economic growth, afforded by participation in global supply chains. While committing in 2010 to an APEC-wide goal of improving supply chain performance (i.e., reduction of time, cost, and certainty of moving goods) by 10 percent by 2015 throughout the region, APEC Leaders recognized that this objective would require targeted comprehensive capacity building efforts. In 2014, US- ATAARI worked with USTR to develop APEC projects under the Supply Chain Connectivity Sub-Fund for five technical capacity building programs: (1) PAP; (2) expedited shipments; (3) AR; (4) electronic payments; and (5) release of goods. Specific interventions under this workstream are detailed below.

Peru PAP Moving forward with the recommendations outlined in its economy-level PAP assessment for Peru, which was finalized in April 2015, US-ATAARI implemented the Workshop on PAP in Peru: Moving Towards Global Best Practice in Lima, Peru in June 2015. Supported by the Superintendencia Nacional de Administración Tributaria (SUNAT) and the Peruvian Customs Agents Association (AAAP), the two-day workshop focused on establishing a dynamic dialogue between private and public sector entities on how to resolve existing challenges and improve Peru’s existing PAP program and provided an opportunity for participants to learn from best practice examples in PAP. With 64 public and private sector representatives in attendance, the workshop provided an overview of existing pre-clearance processes in Peru, with representatives sharing their experiences with import and clearance procedures in Peru. US-ATAARI also presented its assessment of the current PAP program in Peru and showcased international case studies of economies that have successfully implemented PAP programs. Robust discussions contributed to the development of an action plan, to be finalized by SUNAT, and focused on reform efforts in customs bonds, private sector outreach, as well as PAP data requirements. In October 2015, SUNAT worked with other Peruvian government agencies to pass a new Customs Law, which incorporates many of the key US-ATAARI recommendations (please see full success story in Annex B).

Malaysia PAP Having undertaken planning for the Malaysia PAP program in late 2014, US-ATAARI completed its in-country assessment with the objective of identifying concrete recommendations for improvement of the program including how to expand private sector buy in and participation in the program in January 2015. The consultant team met with Royal Malaysia Customs Department (RMCD) and representatives from the Ministry of Finance, Ministry of Transport among other agencies, associations such as the Airfreight Forwarders Association of Malaysia (AFAM) and Conference of Asia Pacific Express Carriers (CAPEC), and domestic and international private sector representatives.

The field visit concluded with an out-briefing with representatives from the U.S. Embassy.

The resultant report examines Malaysia’s current use of PAP and provides recommendations focused on helping both internal and external stakeholders realize more of the program’s potential benefits and aligning it more closely with international best practices. In terms of next steps, the consultant team will work with RMCD to implement the recommendations outlined in the PAP assessment.

Malaysia AR US-ATAARI also coordinated with the Malaysian Ministry of Trade and Industry (MITI) to launch a capacity building program designed to assist Malaysia in bringing its AR program in line with international best practice and the World Trade Organization (WTO) Trade Facilitation Agreement (TFA). As a first step, the consultant team conducted a

1 2 A N N U A L R E P O R T : J A N U A R Y 1 , 2 0 1 5 – D E C E M B E R 3 1 , 2 0 1 5 preliminary review of Malaysia’s Tariff Classification System and the existing Cost Analysis system. The team also undertook a gap analysis comparing the current legislative framework with the proposed WTO TFA requirements for AR and examined legal coverage for both rulings on tariffs as well as origin. USATAARI conducted an in-field assessment focused on the status of Malaysia’s AR program, meeting with such stakeholders as RMCD and several private sector representatives, in August 2015. US- ATAARI drafted the resultant report, which provides a thorough overview of Malaysia’s current advance rulings’ related activities, initial findings and concrete recommendations for enhancing and promoting Malaysia’s AR program going forward. Looking ahead, US- ATAARI will work with Malaysia to implement the recommendations, such as the development of a capacity building program in advance rulings procedures and technical rules of origin under the relevant free trade agreements (FTAs), outlined in the AR assessment.

Other Economy-Level Supply Chain Programs US-ATAARI also continued to focus on moving forward in planning additional economy-level programs under the APEC supply chain capacity building initiative. For the Philippines, US-ATAARI finalized a proposed terms of reference (TOR) that details the scope of work (SOW) to be undertaken with the Philippines Bureau of Customs (BOC) on expedited shipments. The scope was based on discussions with BOC as well as background documents provided to the US-ATAARI team. It is anticipated that the activity will move forward early in 2016. In addition, US-ATAARI initiated planning with Chile Customs on a program that would cover three areas of capacity building- advance rulings, release of goods and electronic payments of duties taxes and fees.

A2C2 US-ATAARI continued to support the A2C2, which was established in 2013 by APEC members under the CTI and aims to bring together public and private sector supply chain experts to review, improve, and participate in APEC driven capacity building efforts in support of APEC’s supply chain connectivity objective. In coordination with USTR, US- ATAARI organized two A2C2 meetings this year. First, in May, 2015, US-ATAARI updated more than 50 private and public sector attendees on a range of supply chain initiatives in APEC, including current PAP projects in Malaysia and Peru, as well as upcoming economy level capacity building activities, including the advance rulings program in Malaysia and expedited shipments programs in Viet Nam and the Philippines. Subsequently, at the third A2C2 meeting in August 2015, US-ATAARI further updated private and public sector attendees on supply chain initiatives underway in APEC. Participants provided recommendations for improvements, including the increase of A2C2’s presence and membership.