Leaders from 21 Pacific economies gathering this week in Lima for the Asia Pacific Economic Cooperation conference arrive with questions on the future of multilateralism and the spectre of US president-elect Donald Trump looming over the event.
This year’s meeting, with the theme “Empower. Include. Grow.” – a slogan decided long before the November 5 US presidential election – comes as “America first” Trump threatens to pull out of or seriously disempower multilateral institutions, track a path on global trade that is far from inclusive and prioritise US growth at the expense of others.
For some, this period has eerie echoes of the 1930s when Washington threw up huge trade barriers that led to widespread retaliation and a global trade war, with devastating implications for the global economy. Trump, a self-avowed “tariff man”, has threatened to impose 60 per cent tariffs on all imports from China and 10 per cent on those from all other nations.
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“I do think we’re heading more into a 1930s situation, No 1. No 2, with respect to global organisations like Apec, like the WTO, the G20, I think we saw he did not have a lot of respect for these kinds of organizations,” said Nicole Bivens Collinson, a former chief negotiator in the office of the US trade representative, recalling Trump’s first term.
The global trading system has been eroding for decades but Trump could accentuate strains, Bivens Collinson, now a managing principal with the Sandler, Travis & Rosenberg law firm, said.
“It’s more disdain. So does he seek to dismantle them? I mean, you can’t dismantle the WTO any more than right now, it’s dysfunctional. On Apec, he’ll probably send some low-level person to them” in the future.
Supporters of Apec, an informal grouping established in 1989 to bind economies in the fast-growing Pacific region and foster cooperative trade, say that paradoxically, this year’s gloomy outlook follows one of the association’s most successful meetings in its history.
A year ago, in a move that helped stem widespread global anxiety, Chinese President Xi Jinping and US President Joe Biden met on the sidelines of the Apec meeting in San Francisco and put a floor under spiralling relations. The two nations account for some 43 per cent of the global economy.
Xi and Biden will both be in Peru this week for the meeting – and at the Group of 20 economies in Brazil a few days later – but the expectations and political climate have shifted drastically.
“The high-water mark for Apec, at least for the near future, unfortunately, was last year. The US hosted, the US believes in multilateralism, sustainable development, a lot of the other Apec principles,” Jeffrey Moon, principal of China Moon Strategies and formerly with the US National Security Council, said.
“Things are about to change very quickly. Now that we know the [new Trump] administration is under way, it’s difficult for me to think of anything meaningfully substantive that would come out of a Xi-Biden meeting, other than reassurance of stability in the short term.”
Another focus of this year’s Apec meeting is sustainability and green technology, including an initiative to develop “low-carbon hydrogen policy frameworks” for the Asia-Pacific region. Trump has likewise made little secret of his disdain for alternate energy, calling global warming a “hoax”, vowing to slash EV tax credits, claiming that windmills kill bald eagles and vowing to “drill, baby, drill”.
On Monday and today, senior officials are finalising proposals crafted during over 270 working meetings this year. Leaders are to approve them on Wednesday and Thursday. Peru, hosting the conference for the third time, has adopted an optimistic face with no formal mention of the US election results.
“Our efforts to drive both trade and investment, alongside a growth-focused agenda in Apec, are building momentum,” said Carlos Vasquez, who is chairing the 2024 Apec Senior Officials meeting. “Apec members understand that fostering new norms and economic policies can drive inclusiveness.”
Even as a wave of populist leaders who are wary of liberalisation and reduced barriers are elected around the world, Apec supporters say the organisation still holds immense value, citing last year’s meeting as an example.
Unlike some of its counterparts, Apec is consensus-based with a year-round agenda – much of which involves nitty-gritty customs, technology and standards issues – with a heavy focus on companies and industries.
On the one hand, this affords busy leaders an opportunity to meet informally, with much of the most important progress made on the sidelines, as seen with the Xi-Biden sit down in Woodside, California, last year that led to a resumption of US-China military-to-military communication and a shared commitment to fight illicit drugs and begin thinking about regulating artificial intelligence.
This year, a host of newly elected leaders have an opportunity to meet with peers and brainstorm over trade strategies, including Japan’s Shigeru Ishiba, New Zealand’s Christopher Luxon, Indonesia’s Prabowo Subianto, Taiwan’s Lai Ching-te and Mexico’s Claudia Sheinbaum.
On the other hand, Apec’s very informality also means that it is non-binding, leading to criticism that it is little more than a talking shop.
In recent years, the organisation’s focus has shifted from creating new multilateral free trade agreements – epitomised by a free trade area of the Asia-Pacific floated by a business advisory council in 2004 – to refining and improving existing structures, as trade liberalisation has become toxic in many countries.
The world has seen this before. Having campaigned in 2016 on an antitrade, anti-globalisation platform, upon being inaugurated in 2017 Trump withdrew from the Trans Pacific Partnership agreement aimed at countering China’s trade barriers and liberalising the movement of goods and services throughout the region.
Additionally, a few months later, he withdrew the US from the Paris climate agreement, the first nation to do so.
“Apec is very interested in keeping trade alive, keeping it on agenda, and hoping that maybe someday, the United States comes back. Obviously that election makes that less likely for the next four years,” said Larry Greenwood, a former US ambassador to Apec.
“The best you can hope for is keeping the trade debate there and on the table, even if we’re not making any advancement,” Greenwood, now a senior adviser with the Bower Group Asia, said. “It’s really about how to slow down the rise in protectionism.”
More from South China Morning Post:
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