APEC sets new tone for post-Trump trade

Xi Jinping Photographer: SeongJoon Cho/Bloomberg

The health risks and its impact on the global economic ecosystem have been the major agenda for all APEC economies this year

pic by BLOOMBERG

LEADERS at the Asia Pacific Economic Cooperation (APEC) summit last Friday were able to set their differences aside to issue their first joint statement since 2017, committing to open trade and investment to revive their Covid-19 battered economies.

The great rivalry between the US and China, which had impeded regional development in recent years, was barely on display at the virtual annual gathering as Beijing’s habitual push for influence was met with an uncharacteristic muted response from Washington.

US President Donald Trump’s decision to skip a side conference before the summit shifted the spotlight to Chinese President Xi Jinping (picture), who used his keynote address to highlight China’s achievement in fighting Covid-19 and called for openness over seclusion in trade as its economy picks up.

In a veiled reference to the US, he said China would reject decoupling aimed at forming a “small circle that is closed and that isolates others”.

Xi later expressed China’s favourable interest of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), signalling its intention to deepen its reach into South-East Asia.

S Rajaratnam School of International Studies research fellow Collin Koh Swee Lean said China’s tone at APEC has been consistent with the stance it has taken to international diplomacy centred around Xi and his idea of “community of shared future for all mankind” — one that focuses heavily on promoting multilateralism.

“This is in no small part directed at the Trump Administration’s ‘America First’ unilateral approach to international diplomacy, and Beijing is seeking to oppose that. This is, therefore, reflected in its positions across international and regional forums, not least APEC.

“This undertone that emphasises multilateralism is aimed at highlighting the need for cooperation over the Covid-19 pandemic, which deliberately stands to counter Trump’s unilateralism, and of course, over trade which Beijing wants to use to counter Trump’s unilateral approaches, such as the imposed tariffs in the US-China trade war.

“In sum, the narrative Beijing is seeking to push is that the US as a superpower is selfish and only cares about its own gains, whereas China stands for everyone’s benefits, hence, pushing multilateralism instead,” he told The Malaysian Reserve.

Earlier this month, the Asean-led Regional Comprehensive Economic Partnership (RCEP) was signed at the East Asia Summit without the US.

A dozen of APEC’s 21 members, including Japan, Singapore and Malaysia, signed up to the pact.

Both the CPTPP and RCEP hold significance in symbolising the position of the world’s two largest economies.

The US’ omission from the RCEP and its withdrawal from the CPTPP have given Beijing the upper hand in shaping the rules of trade in the region.

As it stands, trade between China and Asean increased in the first nine months this year despite the pandemic, with total trade worth US$481.8 billion (RM1.97 billion), surpassing the European Union as China’s largest trading partner.

As the largest participant in RCEP, both by GDP and population, Beijing looks certain to wield its strengths and capitalise on the gap left by the US.

The APEC Economic Leaders’ Meeting held in Kuala Lumpur was the first since 2018 after last year’s host, Chile, cancelled the annual summit due to domestic protests.

At the Papua New Guinea summit in 2018, APEC leaders failed to issue a joint statement for the first time in its history amid tensions between the US and China.

Prime Minister (PM) Tan Sri Muhyiddin Yassin, who played host this year, told a virtual news conference last Friday that the Covid-19 pandemic had upstaged the US-China trade war.

“The health risks and its impact on the global economic ecosystem have been the major priority agenda for all APEC economies this year,” he said.

APEC economies have also pledged to refrain from backtracking and resorting to protectionist measures to keep markets and borders open, he added.

With growth in the Asia-Pacific region expected to decline 2.7% this year, from a 3.6% growth in 2019, he said APEC’s focus is on accelerating economic recovery and developing an affordable vaccine.