APEC fails to deliver amid trade war

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APEC leaders in a photo shoot at Port Moresby, Papua New Guinea. Supplied

PORT MORESBY (Reuters) – The C in APEC stands for Cooperation. But when the two biggest members are fighting a trade war and using the forum to attack each other’s policies, it was always going to be hard work delivering on that.

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The weekend’s Asia-Pacific Economic Cooperation summit in Port Moresby was one of open disagreement, led by disputes between the United States and China over trade, security, and who would be the better investment partner for the region.

As APEC approaches its 30th anniversary, the failure to agree on a communique for the first time calls into question its relevance in a crowded summit calendar and as the Trump Administration makes clear its aversion to multilateralism.

“It does mark the death of APEC’s founding trade vision,” Euan Graham, executive director of La Trobe Asia at Australia’s La Trobe University, said on Twitter, adding APEC was the “most disposable of the regional summits”.

Rather than cooperation, the theme seemed to be conflict and containment as Beijing and Washington directly criticised each other’s policies and staked their claims as to why they were the security and investment partner the Pacific should choose.

“It’s not even supposed to be binding, it’s APEC,” said one diplomat involved in negotiations for the communique, surprised that the members couldn’t agree on what is usually a humdrum summary of issues discussed.

“China and the US hijacked the APEC spirit, I suppose.”

The United States even preferred its own terminology of Indo-Pacific, which it defines as running from “the western shores of Latin America to the furthest reaches of the Indian Ocean”, with US vice president Mike Pence mentioning APEC five times and Indo-Pacific 41 times in his APEC speech on Saturday.

Founded in 1989 with a view to fostering trade and economic ties around the Pacific Ocean, it operated at a ministerial level until 1993 when US President Bill Clinton established the annual leaders meeting. Each meeting had produced a joint statement at its conclusion, until Sunday.

“This is very concerning from a systemic perspective. The WTO faces similar challenges,” said Charles Finny, a Wellington-based trade consultant and a former New Zealand government trade negotiator.

In an editorial, Chinese state-run tabloid the Global Times said the absence of a communique was “not a big deal”, and placed more significance on an upcoming meeting between US President Donald Trump and Chinese President Xi Jinping.

The two leaders are expected to meet at the G20 summit, which starts in Argentina next week.

“It is hoped Washington makes serious preparations for the summit and not pin its hopes on exerting pressure,” said the tabloid, which is known for its nationalistic stance.

Still, there did seem to be some Chinese concern over the communique, with officials rebuffed on Saturday when they tried to meet PNG Foreign Minister Rimbink Pato on the issue.

Mr Pato confirmed to Reuters that Chinese officials had wanted to see him, but said they had not made “necessary arrangements”.

As the APEC host it was Papua New Guinea’s (PNG) role to produce a communique. But the hostility and conflicting visions on display meant few blamed the group’s poorest country for being caught between two feuding superpowers.

“In these times, chairing a gathering such as the leaders that we had over the last few days is no easy task,” Australian Prime Minister Scott Morrison said, adding Papua New Guinea Prime Minister Peter O’Neill had shown great integrity and leadership.

Indeed, one big change was long-forgotten Pacific nations found themselves aggressively courted by the two big-spending superpowers competing for influence in the strategically important ocean.

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