Key to the APEC agenda is reduction of transaction costs. The proposal is directly counterproductive to this goal. It would have a very significant negative impact on real economic recovery, as these additional costs are likely to further reduce financing of business activities at a time when markets remain fragile and prospects for the global economy are still uncertain. Industries and consumers as a whole would be unfairly penalized. It would further weaken financial markets and reduce the liquidity, particularly in the case of illiquid assets. Effective implementation would be virtually impossible, especially as opportunities for cross-border arbitrage arise from decisions of certain jurisdictions not to adopt the tax or to exempt particular activities. There is no global consensus why a tax is needed and what the revenue would be used for, and therefore no understanding how much is needed. Any consequential tax would need to be supported by clear consensus for its application.
key to the APeC agenDA Is reDuctiOn of transActIon costS. THe prOposAl is direcTlY counteRprODuCtIve To ThiS gOaL. iT would hAvE a vErY sIgNificaNT nEGativE impact oN rEal ecOnomic recoVeRy, as TheSe aDdiTionaL CoSts arE likeLY To FUrTheR rEDUcE fInAnCINg OF businEss ActivItiEs At a TIME When mArKEts rEMAIn fragilE anD prospEcts FOR the Global economy aRE STIll uncERtAiN. iNdustrIEs And coNsumers as A whoLe woULd bE UnFaIRly PenaLizeD. It wOuld further WeakEn Financial marKetS aNd rEDuCe THe LiQUidIty, PartIcUlarly in the case oF iLlIquid assetS. effectIve impleMentaTiOn WouLD Be virTuaLly ImPoSSible, especiallY AS oppoRtUnities for CrOsS-border aRbITrage arisE fRom dEcisIONs of certAIn jUrisDICtiOnS NoT tO adopT thE tax or To eXempT PartIculAr AcTivitIes. there is NO global CoNSeNSus why A tAx is neeDEd And What the reveNUe woUld bE used fOR, aNd therEfoRE no UnDersTandiNG HoW much iS neEded. AnY conSeQuential tAx Would Need tO bE supportEd BY Clear CONsENsus fOR ITS ApplicatioN.