USATAARI_annual-report-2016.pdf

February 2017

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

ANNUAL REPORT: JANUARY 1,

2016 – DECEMBER 31, 2016

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

ATAARI-17-018

ANNUAL REPORT: JANUARY 1,

2016 – DECEMBER 31, 2016

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, 2016 – December 31, 2016 xi

1. Introduction 1

2. General Program Management 3

Staffing 3

Work Plan 4

Performance Management 5

M&E Plan 5

3. Status on Work Plan Interventions 7

Program Area 1: Green Growth 7

Program Area 2: Trade and Investment Facilitation 9

Program Area 3: Regulatory Reform 16

Program Area 4: Human Security 26

Program Area 5: Women’s Economic Empowerment 37

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

Cross-Cutting Initiatives 47

4. Conclusion 49

Annex A: Progress Summary 51

Annex B: Success Stories 56

Annex C: US-ATAARI Assistance to the GOB 57

Annex D: 2016 Outstanding Activities 58

ACRONYMS

A2C2 APEC Alliance for Supply Chain Connectivity ABAC APEC Business Advisory Council ACI Airports Council International ACTI ASEAN Connectivity for Trade and Investment ADB Asia Development Bank AMR Antimicrobial Resistance APEC Asia-Pacific Economic Cooperation API Advance Passenger Information APP Airport Partnership Program APRP APEC Peer Review Panel AR Advance Rulings ARCAM APEC Regulatory Cooperation Advancement Mechanism ASEAN Association of Southeast Asian Nations ATCWG Agricultural Technical Cooperation Working Group B2B Business-to-business B2C Business-to-consumer BOC Bureau of Customs (The Philippines) CBP Customs and Border Protection (DHS) CD Chemical Dialogue CLIR Commercial Legal and Institutional Reform CMTA Customs Modernization and Tariff Act COMPETE Advancing Philippine Competitiveness Project COP Chief of Party COR Contracting Officer's Representative (USAID) CPAU Communications and Public Affairs Unit CTI Committee on Trade and Investment CT/ST Counter-Terrorism and Secure Trade CTWG Counter-Terrorism Working Group DCOP Deputy Chief of Party DHS Department of Homeland Security (U.S.)

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.)

DRR Disaster Risk Reduction E3/TRR Bureau for Economic Growth, Education, and Environment’s Office of

Trade and Regulatory Reform (USAID)

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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 FEMA Federal Emergency Management Agency (U.S.)

FFSR Fossil Fuels Subsidy Reform FSCF Food Safety Cooperation Forum FTA Free Trade Agreement FTF Foreign Terrorist Fighter G20 Group of Twenty GDP Gross Domestic Product GHS Globally Harmonized System GHSA Global Health Security Agenda GOB Government of Burma GoFD Group of Friends on Disability GRP Good Regulatory Practice GVC Global Value Chain GWI Office of Global Women’s Issues (DOS) 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 IATA International Air Transport Association IEA International Energy Agency IFRC International Federation of Red Cross and Red Crescent Societies ILO International Labor Organization INTERPOL International Criminal Police Organization IPC Infection Prevention and Control KPI Key Performance Indicator LSPN Labour and Social Protection Network M&E Monitoring and Evaluation MARD Ministry of Agriculture and Rural Development (Viet Nam) MITI Ministry of Trade and Industry (Malaysia) MOFA Ministry of Foreign Affairs (Viet Nam) MOIT Ministry of Industry and Trade (Viet Nam) MSME Micro, Small and Medium Enterprise MYP Multi-Year Project

A C R O N Y M S V I I

NCI Natural Coastal Infrastructure NCSC National Customs Service of Chile NGO Non-Governmental Organization NOAA National Oceanic and Atmospheric Administration NTB Non-tariff Barrier OECD Organisation for Economic Co-operation and Development OFWG Oceans and Fisheries Working Group OPSF Oil Price Stabilization Fund PAP Pre-arrival Processing PCCI Philippine Chamber of Commerce and Industries PD Program Director PDC Pacific Disaster Center PE Program Executive PHL Post-Harvest Loss PIRS Performance Indicator Reference Sheet PNG Papua New Guinea PNR Passenger Name Record PPFS Policy Partnership on Food Security PPP Public-Private Partnership PPSTI Policy Partnership on Science Technology and Innovation 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) RIG Regional Inspector General RMCD Royal Malaysia Customs Department SCE Steering Committee on Economic and Technical Cooperation SCSC Subcommittee on Standards and Conformance SDMOF Senior Disaster Management Officials Forum SGF Self-Generating Facility SME Small and Medium Enterprise SMEWG Small and Medium Enterprise Working Group SMM Sustainable Materials Management SOM Senior Officials’ Meeting SOP Standard operating procedure SPS Sanitary and Phytosanitary Measures STEM Science, technology, engineering, and mathematics SUT Supply-use table TA Technical Assistance TAF The Asia Foundation TBT Technical Barriers to Trade TFA Trade Facilitation Agreement TFI Travel Facilitation Initiative TMM Transportation Ministerial Meeting

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TPTWG Transportation Working Group TRADE Trade-Related Assistance for Development Project TRS Time Release Survey TVET Technical and vocational education and training UC Universal Charge UNCITRAL United Nations Commission on International Trade Law UNDP United Nations Development Programme UNECE United Nations Economic Commission for Europe UNEP United Nations Environment Programme UNISDR United Nations International Strategy for Disaster Reduction UNWTO World Tourism Organization 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 VINARE Vietnam National Reinsurance Corporation WCO World Customs Organization WE-APEC Women’s Entrepreneurship in APEC WEF Women in Economy Forum WEF World Economic Forum WHO World Health Organization WiT Women in Transportation WTO World Trade Organization WTTC World Travel and Tourism Council

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

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, 2016 – December 31, 2016 from the Fourth Annual Work Plan. 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 Fossil fuels subsidy reform (FFSR): In support to APEC in achieving its goal to phase out inefficient fossil fuel subsidies, US-ATAARI completed a peer review assessment of the Philippines using the approach piloted with Peru in 2014. The resultant report provides 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 launched a peer review assessment of Viet Nam, which will be completed in 2017.

Program Area 2: Trade and Investment Facilitation Supply chain connectivity: US-ATAARI’s robust work on supply chain connectivity continued this year, through several capacity building programs in partnership with volunteer economies aimed at improving developing economies’ ability to comply with the World Trade Organization’s Trade Facilitation Agreement (TFA). US-ATAARI finalized economy-level assessments (phase 1) on pre-arrival processing (PAP) and advance rulings (AR) in Malaysia. Further, US-ATAARI implemented phase 2 of technical assistance on PAP in Malaysia, which involved implementing a public private dialogue on PAP in September of this year. The team completed an assessment on expedited shipments for The Philippines. Moreover, US-ATAARI conducted in-field supply chain assessments in Chile and Viet Nam, which served as the basis for evaluation reports.

US-ATAARI also continued to support the APEC Alliance for Supply Chain Connectivity (A2C2), 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.

Public-Private Partnerships (PPPs) in Transportation infrastructure: In support of a multi-year U.S. government initiative that aims to promote economies’ knowledge of public-private partnerships (PPPs) in the transportation infrastructure space, US- ATAARI completed a literature review and gap analysis to identify strengths and potential gaps in approaches to PPP development in the area of transportation infrastructure within the APEC region. The literature review informed the scope of two workshops which resulted in member economies identifying key capacity gaps and a broad practical menu of options for projects that will form the basis for future PPP capacity building initiatives across the region.

Program Area 3: Regulatory Reform Ease of Doing Business (EoDB) work: In 2016, US-ATAARI continued supporting

APEC’s EoDB initiative through the development of APEC’s EoDB Implementation Plan (2016-2018), which will guide the implementation of capacity building and technical assistance activities to support economies’ efforts to improve the business environment in APEC. In addition, US-ATAARI undertook the study: Assessing APEC Getting Credit and

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Enforcing Contracts Frameworks According to International Best Practices, which assesses the degree of alignment of APEC economies’ legal frameworks with relevant international best practices, including from United Nations Commission on International Trade Law (UNCITRAL) and The Hague Conference instruments. The team also implemented a capacity building workshop focused on the EoDB priority areas of starting a business, trading across borders, and dealing with construction permits in February 2016 as well as a capacity building workshop designed to increase understanding of supply chain finance and how it can be used to improve access to credit.

Program Area 4: Human Security Food security efforts: US-ATAARI completed its post-harvest loss (PHL) initiative ongoing from 2014. The team finalized the APEC Post-Harvest Loss Study Report on Rice and Other Grains, which underscores the limitations in collecting up-to-date and comprehensive post-harvest loss data across various value chains in most APEC economies and provides general recommendations for PHL reduction strategies, as well as the APEC Survey on Innovative Technologies and Best Practices to Reduce Food Loss, which sets out recommendations for capacity building programs to address challenges with the adoption of new technological solutions to reduce PHL. US-ATAARI also supported speakers who presented to the Policy Partnership on Food Security (PPFS) on Climate Smart Agriculture (CSA) initiatives in practice and how APEC member economies can begin to build out a CSA system for the region. The team contributed to a “non-paper” underscoring the need for an APEC CSA initiative. Lastly, the team implemented a two-day policy forum on strengthening APEC cooperation on climate change and food security in June 2016, which will serve as the foundation for robust work in this area in 2017.

Supply chain resilience: US-ATAARI has supported APEC’s global supply chain resilience work since the start of the initiative and continued this assistance in 2016. In keeping with its two-track approach, the team implemented an APEC-wide workshop focused on the principle of recognizing and promoting best practices in human resource and capacity management in supply chain resilience in September 2016. Subsequently, US-ATAARI adopted the more targeted, economic-specific focus of the second track with the implementation of a symposium and workshop designed to reduce supply chain risks and enhance resilience in Viet Nam in November 2016. Finally, US-ATAARI followed up with other economies who have been undertaking domestic efforts, learning that the Philippines reported that it has made a variety of domestic changes, including the addition of resilience in its domestic logistics strategy as a result of US- ATAARI’s capacity building work.

Program Area 5: Women’s Economic Empowerment Healthy Women, Healthy Economies (HWHE) initiative: Having developed the

HWHE Policy Toolkit, which features suggested actions in five areas – (1) workplace health and safety; (2) health access and awareness; (3) reproductive health; (4) gender violence and sexual harassment; and (5) work/life balance - in 2015, US-ATAARI this year developed economic and business case reports, which quantify the impacts of the toolkit policies, if applied, and provide guidance as to how to articulate results in terms of overall benefits and impact on the bottom line. These reports serve as critical tools in equipping companies and governments with the information needed to support

E X E C U T I V E S U M M A R Y X I implementation of HWHE actions in their respective economies. In addition, the team launched a Monitoring and Evaluation (M&E) Framework, which serves as a guide for governments and businesses to track progress. US-ATAARI also supported a second workshop to further promote implementation of the policy toolkit in economies and businesses across the Asia-Pacific.

Science, technology, engineering, and mathematics (STEM) support: In 2016, the United States launched a multi-faceted initiative to gather information, build capacity, and increase the number of women in the STEM education and workforce pipeline. In support of this initiative, US-ATAARI developed the study APEC Women in STEM: A Framework for Dialogue, Learning and Action, drawing from a range of sources, including a survey of activities and priorities among each of the APEC economies. The four pillars of the Framework – (1) Enabling Environment; (2) Education; (3) Employment; and (4) Entrepreneurship – reflect the promising work that is already taking place throughout APEC. The study also proposes a tangible set of policy recommendations and charts the next steps on how APEC economies can close the STEM gender gap. Alongside the development of the study, US-ATAARI also implemented two capacity building workshops on the margins of the APEC Women in Economy Forum (WEF) in June 2016 and APEC Education Ministerial Meetings in October 2016.

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 2016, US-ATAARI worked with Viet Nam (2017) and Papua New Guinea (PNG) (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.

APEC Secretariat Process Mapping: US-ATAARI developed the APEC Secretariat Process Mapping Report: Fora and Project Process Assessment and Recommendations.

The report details: (1) processes and roles of the PEs, PDs and external stakeholders in performing each activity or task; (2) deviations in roles and responsibility and associated challenges; (3) issues/problems and recommendations for improvement; and (4) next steps to improve fora and project cycle management processes. The assessment revealed opportunities for clarification of responsibilities and improvement of tools. The report set forth recommendations specific to enhancing core functions as well as broader recommendations to support the Secretariat’s overall efficiency and effectiveness.

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, 2016 – DECEMBER 31, 2016

Finalized 16 technical reports

Implemented 30 workshops

Trained 1,653 participants

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In 2016, US-ATAARI coordinated with 22 government agencies to develop and implement 68 interventions on a range of technical issues. Key achievements under each program area include:

Program Area 1: Green Growth Fossil fuels subsidy reform (FFSR): In support to APEC in achieving its goal to phase out inefficient fossil fuel subsidies, US-ATAARI completed a peer review assessment of the Philippines using the approach piloted with Peru in 2014. The resultant report provides 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 launched a peer review assessment of Viet Nam, which will be completed in 2017.

Program Area 2: Trade and Investment Facilitation Supply chain connectivity: US-ATAARI’s robust work on supply chain connectivity continued this year, through several capacity building programs in partnership with volunteer economies aimed at improving developing economies’ ability to comply with the World Trade Organization’s Trade Facilitation Agreement (TFA). US-ATAARI finalized economy-level assessments (phase 1) on pre-arrival processing (PAP) and advance rulings (AR) in Malaysia. Further, US-ATAARI implemented phase 2 of technical assistance on PAP in Malaysia, which involved implementing a public private dialogue on PAP in September of this year. The team completed an assessment on expedited shipments for The Philippines. Moreover, US-ATAARI conducted in-field supply chain assessments in Chile and Viet Nam, which served as the basis for evaluation reports.

US-ATAARI also continued to support the APEC Alliance for Supply Chain Connectivity (A2C2), 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.

Public-Private Partnerships (PPPs) in Transportation infrastructure: In support of a multi-year U.S. government initiative that aims to promote economies’ knowledge of public-private partnerships (PPPs) in the transportation infrastructure space, US- ATAARI completed a literature review and gap analysis to identify strengths and potential gaps in approaches to PPP development in the area of transportation infrastructure within the APEC region. The literature review informed the scope of two workshops which resulted in member economies identifying key capacity gaps and a broad practical menu of options for projects that will form the basis for future PPP capacity building initiatives across the region.

Program Area 3: Regulatory Reform Ease of Doing Business (EoDB) work: In 2016, US-ATAARI continued supporting

APEC’s EoDB initiative through the development of APEC’s EoDB Implementation Plan (2016-2018), which will guide the implementation of capacity building and technical assistance activities to support economies’ efforts to improve the business environment in APEC. In addition, US-ATAARI undertook the study: Assessing APEC Getting Credit and

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

Enforcing Contracts Frameworks According to International Best Practices, which assesses the degree of alignment of APEC economies’ legal frameworks with relevant international best practices, including from United Nations Commission on International Trade Law (UNCITRAL) and The Hague Conference instruments. The team also implemented a capacity building workshop focused on the EoDB priority areas of starting a business, trading across borders, and dealing with construction permits in February 2016 as well as a capacity building workshop designed to increase understanding of supply chain finance and how it can be used to improve access to credit.

Program Area 4: Human Security Food security efforts: US-ATAARI completed its post-harvest loss (PHL) initiative ongoing from 2014. The team finalized the APEC Post-Harvest Loss Study Report on Rice and Other Grains, which underscores the limitations in collecting up-to-date and comprehensive post-harvest loss data across various value chains in most APEC economies and provides general recommendations for PHL reduction strategies, as well as the APEC Survey on Innovative Technologies and Best Practices to Reduce Food Loss, which sets out recommendations for capacity building programs to address challenges with the adoption of new technological solutions to reduce PHL. US-ATAARI also supported speakers who presented to the Policy Partnership on Food Security (PPFS) on Climate Smart Agriculture (CSA) initiatives in practice and how APEC member economies can begin to build out a CSA system for the region. The team contributed to a “non-paper” underscoring the need for an APEC CSA initiative. Lastly, the team implemented a two-day policy forum on strengthening APEC cooperation on climate change and food security in June 2016, which will serve as the foundation for robust work in this area in 2017.

Supply chain resilience: US-ATAARI has supported APEC’s global supply chain resilience work since the start of the initiative and continued this assistance in 2016. In keeping with its two-track approach, the team implemented an APEC-wide workshop focused on the principle of recognizing and promoting best practices in human resource and capacity management in supply chain resilience in September 2016. Subsequently, US-ATAARI adopted the more targeted, economic-specific focus of the second track with the implementation of a symposium and workshop designed to reduce supply chain risks and enhance resilience in Viet Nam in November 2016. Finally, US-ATAARI followed up with other economies who have been undertaking domestic efforts, learning that the Philippines reported that it has made a variety of domestic changes, including the addition of resilience in its domestic logistics strategy as a result of US- ATAARI’s capacity building work.

Program Area 5: Women’s Economic Empowerment Healthy Women, Healthy Economies (HWHE) initiative: Having developed the

HWHE Policy Toolkit, which features suggested actions in five areas – (1) workplace health and safety; (2) health access and awareness; (3) reproductive health; (4) gender violence and sexual harassment; and (5) work/life balance - in 2015, US-ATAARI this year developed economic and business case reports, which quantify the impacts of the toolkit policies, if applied, and provide guidance as to how to articulate results in terms of overall benefits and impact on the bottom line. These reports serve as critical tools in equipping companies and governments with the information needed to support

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 6 – D E C E M B E R 3 1 , 2 0 1 6 implementation of HWHE actions in their respective economies. In addition, the team launched a Monitoring and Evaluation (M&E) Framework, which serves as a guide for governments and businesses to track progress. US-ATAARI also supported a second workshop to further promote implementation of the policy toolkit in economies and businesses across the Asia-Pacific.

Science, technology, engineering, and mathematics (STEM) support: In 2016, the United States launched a multi-faceted initiative to gather information, build capacity, and increase the number of women in the STEM education and workforce pipeline. In support of this initiative, US-ATAARI developed the study APEC Women in STEM: A Framework for Dialogue, Learning and Action, drawing from a range of sources, including a survey of activities and priorities among each of the APEC economies. The four pillars of the Framework – (1) Enabling Environment; (2) Education; (3) Employment; and (4) Entrepreneurship – reflect the promising work that is already taking place throughout APEC. The study also proposes a tangible set of policy recommendations and charts the next steps on how APEC economies can close the STEM gender gap. Alongside the development of the study, US-ATAARI also implemented two capacity building workshops on the margins of the APEC Women in Economy Forum (WEF) in June 2016 and APEC Education Ministerial Meetings in October 2016.

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 2016, US-ATAARI worked with Viet Nam (2017) and Papua New Guinea (PNG) (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.

APEC Secretariat Process Mapping: US-ATAARI developed the APEC Secretariat Process Mapping Report: Fora and Project Process Assessment and Recommendations.

The report details: (1) processes and roles of the PEs, PDs and external stakeholders in performing each activity or task; (2) deviations in roles and responsibility and associated challenges; (3) issues/problems and recommendations for improvement; and (4) next steps to improve fora and project cycle management processes. The assessment revealed opportunities for clarification of responsibilities and improvement of tools. The report set forth recommendations specific to enhancing core functions as well as broader recommendations to support the Secretariat’s overall efficiency and effectiveness.

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

Table 1 Summary of Results to Date1

Indicator Actual

FY16

Target

FY17

Actual

FY17

Q1

OUTCOME INDICATORS

OC1: Percentage of workshop or training participants who state that their capacity has increased as a result of US-ATAARI workshops

79% 80% 78%

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

75% 60% 91%

OC3: 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

32% 20% 29%

OUTPUT INDICATOR

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

13 18 6

INPUT INDICATORS

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

2,859 2,200 542

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

10,837 10,000 3,036

WORKSTREAM SPECIFIC INDICATOR

5.1.1: Number of laws, policies, or procedures drafted, proposed or adopted to promote gender equality at the regional, national or local level

2 2 1

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.

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), Ann Katsiak, and Deputy Chief of Party (DCOP), Mark Walter. The US-ATAARI activity has offices in the APEC Secretariat as well as 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 fourth year (January 1, 2016 – December 31, 2016) and will cover both the annual report as well as the fourth quarter report for October 1, 2016 – December 31, 2016. 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 how supply chains have been strengthened in the Philippines one year after US-ATAARI interventions. 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 Fourth Annual Work Plan that were subject to scheduling delays and/or cancellations.

2. GENERAL PROGRAM

MANAGEMENT

This is the third annual report for US-ATAARI and covers program activities from January 1, 2016 to December 31, 2016. Activity interventions carried out in this timeframe fall under the Fourth Annual Work Plan (January – December 2016). Our program management activities have centered on the management of staffing, administration of operations, management of financial resources, and adherence to reporting requirements.

STAFFING

US-ATAARI’s offices remained fully staffed through the year, although US-ATAARI did coordinate with USAID and DOS to manage staffing transitions for both key and non-key long term personnel positions. Due to the resignation of COP Victoria Waite, US-ATAARI undertook a comprehensive search for possible replacement candidates, both internal and external to the firm. Simultaneous to this search, discussions were held within the U.S.

Government (inclusive of DOS and USAID) in regards to possible significant changes to the US- ATAARI organizational structure vis-à-vis USAID and the office from which the contract is run.

While formal USAID contractual changes are yet to be made, in order to ensure that US- ATAARI is responsive and flexible to changing demands, US-ATAARI proposed that current DCOP Ms. Ann Katsiak serve as acting COP, and Mr. Mark Walter (Senior Sector Specialist) join US-ATAARI as acting DCOP (under ATAARI-16-049). These changes to key personnel became effective June 7, 2016.2 Mr. Walter initially mobilized in late May 2016 to ensure a smooth transition during a heavy implementation period and completed his mobilization in September 2016. It is anticipated that these changes will be made permanent when the contract moves in early 2017.

US-ATAARI also conducted a search to replace Ms. Amna Bajwa as Program and Training Specialist, a US-ATAARI long-term staff position, based in Singapore. The Program and Training Specialist is tasked with a host of key responsibilities, including: (1) preparing travel approval and technical approval requests; (2) gathering information and respond to contractual and budgetary requests; (3) coordinating with the Washington, D.C. office; (4) working with local program assistant to manage field office accounting records, petty cash, and inputs for monthly financial reports; and (5) serving as workshop coordinator for US-ATAARI workshops/trainings; and (6) coordinating closely with the APEC Secretariat and the Policy Support Unit as needed. Following a recruitment process, US-ATAARI selected Ms. Katherine (Katie) Moon as best-suited to fill this position. Ms. Moon supported the Activity from its DC office until late May 2016, when she mobilized to Singapore to formally commence her assignment. Please find the US-ATAARI team in Table 2 below.

2 Ms. Waite demobilized from Singapore on June 7, 2016.

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Table 2: US-ATAARI Personnel

Team Member Responsibilities Start Date

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

DC 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

WORK PLAN

The US-ATAARI team worked closely with USAID, DOS’ Office of Economic Policy in the Bureau of East Asian and Pacific Affairs (EAP/EP) and other U.S. government counterparts, as well as the APEC Secretariat to develop and submit the Fourth Annual Work Plan (January- December 2016), which was approved on January 31, 2016 (under ATAARI-16-009). The 2016 work plan includes interventions laid out in the January 2016 interim work plan (approved under ATAARI-15-119) as well as interventions planned for rest of the calendar year.3 Following further consultations with U.S. government counterparts, US-ATAARI submitted an amended annual work plan, which includes additional prioritized U.S. government initiatives and deliverables that are designed as longer-term efforts within APEC and that focus on outcomes and development impacts. Modifications to the work plan also include shifting some workstreams to different program areas in an effort to ensure continued focus of the existing six US-ATAARI Program Areas. The amended 2016 work plan received approval on March 25, 2016 (under ATAARI-16-009 MOD).

Looking ahead, US-ATAARI is working in close coordination with USAID, DOS and other government counterparts to develop the Fifth Annual Work Plan (January – December 2017).

As a first step, US-ATAARI reviewed a preliminary list of possible interventions received from DOS and USAID and provided input on clarifying or adding activities. Moreover, the team

3 US-ATAARI’s 2016 Annual Work Plan covers the entire calendar year that aligns with the APEC schedule (from January to December).

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 developed a list of potential interventions to be implemented under Program Area 6: APEC Secretariat and APEC host year capacity building in 2017. The team also developed and submitted preliminary budget estimates for the work plan list in its entirety. On December 20, 2016, US-ATAARI submitted the draft 2017 work plan for review and comment by USAID and DOS EAP/EP. Per feedback received, the team will further refine with the intent to finalize in early 2017.

PERFORMANCE MANAGEMENT

The USAID Regional Inspector General’s Office based in Manila, The Philippines (RIG/Manila) is conducting a performance audit of the US-ATAARI Activity to determine whether the Activity is achieving its main goals. The audit covers program interventions over a 26-month period, from the inception of the program on November 1, 2013, through December 31, 2015. In February 2016, auditors conducted field visits to USAID/RDMA in Bangkok, Thailand to meet with the US-ATAARI USAID Contracting Officer's Representative (COR), the APEC Secretariat in Singapore to interview key personnel of APEC’s various committees, working groups, task forces, and technical expert groups, and the US-ATAARI Singapore-based office to hold discussions with the US-ATAARI COP. The audit team also traveled to US-ATAARI’s DC office to meet with US-ATAARI’s DCOP and the M&E team as well as U.S. government counterparts in March 2016. Along with their interviews of the DC-based US-ATAARI team, the auditors reviewed and analyzed documents to validate data reported under six selected performance indicators. US-ATAARI awaits circulation of the final audit report findings and recommendations.

M&E PLAN

US-ATAARI revised its M&E Plan to incorporate preliminary findings of the USAID audit and reflect adjustments to address issues arising in implementation to ensure data quality. As detailed above, the audit entailed an analysis of documents used to validate data reported under six selected performance indicators. Preliminary findings recommended that US-ATAARI refine definitions in its PIRSs to more accurately capture US-ATAARI practice; incorporate additional actions planned to address data limitations, specifically for outcome indicators; and revise certain targets to be more ambitious but achievable in light of FY15 actuals. In keeping with lessons learned during the first implementation year of the approved M&E Plan, US-ATAARI also determined to broaden the data sources for several indicators. Lastly, the team added three RDMA indicators in order to align its M&E Plan with RDMA’s M&E Plan. The amended M&E Plan received approval on July 6, 2016 (under ATAARI-15- 041 MOD). 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 on the standard operating procedures (SOPs) and the processes for data collection on the KPIs in April 2016.

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

FFSR Peer Reviews Government subsidies for fossil fuels increase carbon emissions and thwart efforts to mitigate climate change by making high carbon-emitting fossil fuels cheaper to produce and consume, and distorting comparative costs of renewable energy sources and clean technologies. Fossil fuel subsidies also 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 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 help achieve this, APEC has agreed to set up a “voluntary reporting mechanism” that they would review annually to assess APEC’s progress toward this goal. APEC economies are in various stages of implementing these reviews, with several either completed or close to completing a review in APEC or the Group of Twenty (G20). In pursuit of meeting this commitment, several APEC economies, including developing economies, have committed to undertake this peer review process.

Having worked with the APEC Energy Working Group (EWG) to develop APEC’s guidelines for review in 2013 and completed a peer review of Peru’s fossil fuel subsidies in 2014, US-ATAARI launched a peer review assessment of the Philippines in late 2015. The peer review team, comprised of four experts from the U.S., Indonesia, New Zealand, and the International Energy Agency (IEA) as well as US-ATAARI experts, met with various 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. Finalized in May 2016, the resultant report includes: (1) an overview of Philippines economy, socio-demographics and the energy landscape; (2) the history and context of the five selected subsidies;4 (3) key findings and recommendations from

4 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 (PTAP), a short-lived, inactive program to provide subsidized diesel and gasoline to public transit operators; (3) Excise Tax Exemptions, referring to the current differentiated excise tax regime where several ‘socially-sensitive’ fuels are exempted from excise taxes; (4) Universal Charge for Missionary Electrification (UC-ME) to support the Small Power

8 A N N U A L R E P O R T : J A N U A R Y 1 , 2 0 1 6 – D E C E M B E R 3 1 , 2 0 1 6 the Secretariat of the APEC Peer Review Panel (APRP); and (4) lessons learned and best practices for reform. The peer review team concluded that only two of the selected policies -the OPSF and the UC-ME - have led to wasteful and inefficient use of fossil fuels. The three remaining policies were not considered as subsidies resulting in wasteful consumption of fossil fuels. The report notes that there are many potential reforms and policy options available to the Philippines government to rationalize fuel taxes and electricity surcharges while preserving and pursuing the government’s social, environmental, and fiscal objectives. These measures are explored extensively in the recommendations, observations, case studies and lessons learned, which serve as inputs for the Philippines to utilize as it develops reform options for the policy instruments put forward for review.

US-ATAARI also coordinated with the U.S Department of Energy (DOE) and Ministry of Industry and Trade (MOIT) of Vietnam on a peer review assessment of Viet Nam. Based on lessons learned from these previous peer reviews, the US-ATAARI expert team undertook an in-field scoping trip to Ha Noi, Viet Nam in July 2016. The trip included: (1) meetings with MOIT and other stakeholders, including the Electricity Regulatory Authority of Viet Nam; the Institute of Energy; and the Domestic Market Department, to discuss various clarification question/suggestions on the selected polices and background information about Vietnam relevant for finalizing the pre-briefing document; (2) meetings with MOIT to finalize the peer review team; and (3) discussion of peer review agenda and logistical requirements during the VPR. The team also communicated with authors of relevant past reports, including a study of fossil fuel subsidies in Viet Nam conducted by United Nations Development Programme (UNDP) in 2014, to understand the landscape and challenges the Peer Review team may face.

Subsequent to this preparatory trip, US-ATAARI worked with DOE to identify its peer team, selecting five peer reviewers from Indonesia, Mexico, the United States, the Global Subsidies Initiative, and the International Energy Agency. The expert team worked with MOIT to narrow down the list of subsidies to be reviewed and to draft and circulate a background report to peer reviewers. Due to delays in inputs from Viet Nam and scheduling conflicts, the review will now take place in February 2017.

STATUS: In progress.

DELIVERABLES DURING

THIS REPORT PERIOD:

Finalized the FFSR peer review and draft report on the Philippines in May 2016.

Conducted preliminary scoping trip to meet with Ministry officials in July 2016 as preparation for the Viet Nam FFSR assessment.

RESULTS/NEXT STEPS: Conduct FFSR Viet Nam peer review in February 2017; develop report outlining key findings and recommendations.

Utilities Group (SPUG), a cross-subsidy program for supporting electricity access and provision in remote areas, with revenue being raised from fees on grid-connected ratepayers; and (5) Universal Charge Exemption for Self-Generating Facilities (SGFs), which are currently exempted from UC fees charged to other rate-paying electric utility customers, pending government review.

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.

APEC is in the process of now finalizing phase 2 of its supply chain work, which will focus on reducing trade costs across supply chains and improving supply chain reliability in supporting the competitiveness of business in the Asia Pacific region. US-ATAARI has supported the Office of the United States Trade Representative (USTR) since 2014 in the development and implementation of t five APEC projects under the Supply Chain Connectivity Sub-Fund: (1) PAP;

(2) expedited shipments; (3) AR; (4) electronic payments; and (5) release of goods. Specific interventions under this workstream are detailed below.

Malaysia PAP Having completed the field work for Malaysia PAP report in 2015, the consultant team finalized the resultant assessment report in January 2016.The 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 its PAP program more closely with international best practices. Based on the assessment, the team concluded that there is a gap within Royal Malaysia Customs Department’s (RMCD) existing business processes where data can and needs to be accessed, used and reused readily without human intervention (data convergence and data automation).

Improving the effectiveness of PAP in Malaysia thus requires close cooperation among public and private sector stakeholders at the strategic planning and technical committee levels.

Moving forward with the assessment recommendations, US-ATAARI implemented the “Phase II, Pre-Arrival Processing in Malaysia – Moving Toward Global Best Practice Workshop” in Kuala Lumpur, Malaysia in September 2016. Attended by 86 participants, the two-day training highlighted results and recommendations from the 2015 US-ATAARI-led study and examined lessons learned and best practices, including the World Customs Organization (WCO) Revised Kyoto Convention and the WCO SAFE Framework of Standards, and how to apply them to the Malaysian context. Attendees also worked together in breakout groups to develop an action plan for the implementation of key reforms to PAP in Malaysia. Discussions included how to achieve true PAP versus the current system of pre-arrival clearance, how to facilitate trade by providing deferred payment options to a wider group of traders, how to measure progress in the transition to a PAP system, and the timeline for implementation. The results from these findings and recommendations will feed into the development of an action plan for implementation of reform. RMCD has identified PAP as a top priority and announced its intention to fast-track the program’s implementation.

Malaysia AR

10 A N N U A L R E P O R T : J A N U A R Y 1 , 2 0 1 6 – D E C E M B E R 3 1 , 2 0 1 6

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). Having 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 finalized the resultant report, which provides a thorough overview of Malaysia’s current AR related activities, initial findings and concrete recommendations for enhancing and promoting…