China’s President Xi Jinping spoke to the APEC CEO summit on Thursday morning, and spoke about China’s application to join the CPTPP.
APEC EDITORIAL: Just what do these big global talkfests actually achieve? And do they still achieve it if instead of a year’s worth of meetings and face-to-face interactions, they all occur via Zoom?
It turns out, even in a pandemic, that they do. APEC is a conference like no other. Born out of an enthusiasm for trade liberalisation at the end of the Cold War, it has its own set of idealistic rules built in around it.
It isn’t a conference, instead taking the somewhat abstruse name Asia-Pacific Economic Cooperation. Countries are not referred to, but ‘economies’. There are not supposed to be any flags.
In one sense it dates back to the perceived ideological victory at the end of the Cold War: capitalist liberal democracy had triumphed, now it was a matter of bedding in the US-led global order and getting on with lifting living standards in the region.
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APEC was an idealistic vehicle that aimed to separate out economic cooperation in the region and bring down tariff barriers and protectionism, away from wider geopolitical concerns.
That’s why we’ve subtitled out APEC 2021 coverage with: The leaders, the dreamers, the traders.
It is about national leadership and the leadership of the host nation each year. When each nation leads APEC it stamps it own imprimatur on the year-long programme of work. There isn’t necessarily much of an outcome every year unless driven by the host country, which takes charge of the agenda for the year. By all accounts – and some of the experts that appear in our coverage here – New Zealand has performed well. It is driven at a political level by the Prime Minister, Minister of Foreign Affairs and Trade minister. At an officials level it is driven by the Ministry of Foreign Affairs and Trade.
Then there are the dreamers: APEC is, like all multilateral forums, driven by idealism at its heart. That by nations working together, mutual advantages can be had by all. In APEC’s case the driving thrust is to lift the incomes and living standards to all nations across the broader Asia Pacific region.
It has sought since the early 1990s to do this by reducing tariff barriers and non-tariff trade barriers, increasing the ease of doing business across borders and, more latterly by considering the externalities created by free trade. While everyone gains in aggregate from free trade, there can be regional or national losers.
Hence now a focus on inclusive growth, and New Zealand’s push, led by Foreign Affairs Minister Nanaia Mahuta on small and medium business, indigenous growth and women in business. As Thomas Manch has written in his long read on what APEC achieved, adding indigenous economies to discussions required some sharp elbows from a determined New Zealand.
Then, of course, there are the traders. In once sense, making life easier for trade is the whole purpose of APEC. By liberalising trade and making it easier and more seamless, each nation can focus on its own comparative advantage and lift its wealth and living standards by doing so. It is about bringing goods and service to market more cheaply, harnessing digital technology to further break down barriers and making sure that trade leaves few behind – thus avoiding mini-Donald Trumps popping up across the region.
The whole enterprise hangs together by these three sets of people pursuing a common – and practical -set of goals. As much as APEC is framed by high-minded ideals, it has been, by its nature, a very practical undertaking. Trying to translate the high-minded rhetoric into practical changes on the ground in the region is in the DNA of the institution.
New Zealand’s particular contribution this year has been “The Aotearoa Declaration”. Its overall objective is to foster quality growth that brings palpable benefits and greater health and wellbeing to all, including medium and small businesses, women and others with “untapped economic potential”.
New Zealand’s leadership over this past year has been widely recognised as reinvigorating APEC. A big win for the Ardern Government has been an agreement to end fossil fuel subsidies. It is couched in the language of APEC, which operates by consensus, and uses the language of ‘could’ not ‘will’ but it is a significant step forward for ending a costly economic distortion that also has contributed to higher carbon emissions across the region.
There were also the smaller, more immediate victories. In June, Trade Minister Damien O’Connor announced that all trade ministers had agreed to remove most tariffs off vaccines and vaccine-related goods, and to speed up flows though customs and airports. In an age of pandemic these smaller practical steps prove the worth of the forum.
More generally, APEC occupies a unique place in the multilateral architecture of the region. It is the one forum that only concerns itself with only economic cooperation and eschews both broader tensions in a world of renewed geopolitical competition.
For that reason alone, even if the quality of APEC varies from year to year, it is a worthwhile endeavour.
The region is still reeling from the America-first turn taken by the Trump administration in the United States, whereby trade deficits – where a nation’s imports are worth more than exports – were seen as somehow ‘losing’. The Biden administration has not yet fully turned the tide on that particular world view and some of the policies that flowed from it.
APEC will likely increase in importance as China becomes more assertive about its place in the world and the Chinese Communist Party, which sits atop the state’s apparatus, progressively tightens political control of its own people. The intellectual tide in Washington is also suspicious and highly critical of China’s mercantilism, territorial ambitions and behaviour, under Xi Jinping’s now seemingly indefinite leadership.
As Australia, India, Japan and United States give the Quadrilateral Dialogue more emphasis, and in the wake of Australia signing the AUKUS pact with the United States which will provide it, at some point, with nuclear submarines, geopolitical tension in the area will only become more highly strung.
That’s why APEC matters more than ever. It is a way to facilitate practical cooperation in a way where the two largest players in the regions – the United Sates and China – can be brought into a room together while also taking consideration of needs of the region as a whole.
New Zealand’s contribution to this, managing an awkward online conference that was meant to be a year’s worth of meeting and events in Auckland, has been more than creditable.
This story was produced as part of a publication in partnership with APEC 2021.