Shiva Sharma, MPP, Staff Writer, Brief Policy Perspectives
Consisting of 21 countries, Asia-Pacific Economic Cooperation (APEC) encourages free trade throughout the Asia-Pacific region. The 21 member countries include Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, United States, and Vietnam. The APEC countries hold national summits every year to discuss their priorities and to set the agenda for the following year. This year, the 2017 APEC Summit was held in Da Nang, Vietnam from Nov. 6-11.
The U.S. withdrawal from the Trans-Pacific Partnership (TPP) left a policy void in the Asian region and caused the U.S. to lose economic leverage. China, on the other hand, is vociferously increasing its influence in the region, with ambitious initiatives like “One Belt One Road.” China is engaging with Asian countries with collaborative projects like the “China-Pakistan Economic Corridor.” This project channels billions of dollars in infrastructure, aid, and bilateral projects, changing the power dynamics in the Asia-Pacific region.
Additionally, many other regional groupings are taking shape. The Regional Comprehensive Economic Partnership (RCEP) is a mega free trade deal between the Association of Southeast Asian Nations (ASEAN) countries and Australia, China, India, Japan, New Zealand, and South Korea that is projected to revive global value chains in the region. There are also talks between the European Union (EU) and ASEAN to explore a potential partnership. The TPP-11 are also in the final phases of negotiations with New Zealand, which is amending national laws to accommodate the proposed trade agreement. Thus, APEC, which includes developed countries like the U.S. and China, is a more comprehensive, negotiable platform for the Asia-Pacific countries.
The theme of the 2017 APEC Summit, “Creating New Dynamism, Fostering a Shared Future,” reaffirmed the member countries’ commitment to promote sustainable economic growth in the Asia-Pacific region. One of the main takeaways of the summit was that it focused on innovative ideas to encourage economic growth. Leaders also agreed to establish new drivers for regional economic integration; to strengthen the capacity and innovation of micro, small, and medium enterprises (MSME); and to enhance food security in response to climate change.
While President Trump pitched “America First” policies during his speech at the 2017 APEC Summit, President Xi offered an alternative view of fostering irreversible global linkages. Many countries’ inward-looking policies have set the tone for conservative exchange policies. The tendency in domestic politics to favor protectionism has altered many bilateral relationships, which makes regional cooperation groupings like APEC even more important. In a globalized world struggling to find collective solutions to problems like climate change, inward-looking policies can only go so far. The world needs collective action to foster stronger value chain linkages and to promote sustainable development for all.