APEC Summit reaffirms countries’ commitment to development of free trade and investment
22 November 2017. PenzaNews. The 25th summit of the Asia-Pacific Economic Cooperation APEC ended in Vietnamese Danang on November 11. A joint declaration on the results of the forum was approved. The economic leaders assessed the current regional and global economic situation, agreed on the ways to deepen cooperation, identified a number of tasks for next year.
“We note the importance of non-discriminatory, reciprocal and mutually advantageous trade and investment frameworks. We will work together to make trade more inclusive, support improved market access opportunities, and address unfair trade practices,” the document says.
Commenting on the results of the summit, Lak Chansok, Researcher at Cambodia Maritime Silk Road Research Center (CMSRRC), the Royal University of Phnom Penh in Cambodia and at Democracy Promotion Center, Research Center for Asia Pacific Studies (RCAPS), Ritsumeikan Asia Pacific University in Japan, reminded that the summit was held under the motto “Creating new dynamism, fostering a shared future”.
“The theme is aimed at reaffirming the commitment of the APEC member economies to enhancing economic cooperation, as well as promoting sustainable economic growth and prosperity in the Asia Pacific region,” the expert told PenzaNews.
He also drew attention to the fact that the US President Donald Trump had reached massive trade deals with Japan, China and Vietnam but after that attacked the existing “unfair” bilateral trades and the WTO as well as reaffirmed the US withdrawal from the Trans-Pacific Partnership (TPP).
“Trump’s views for achieving his national interests at the expense of the US liberal democratic values, has given China huge opportunities to play increasingly important roles in global and regional political and economic cooperation, despite the ongoing South China Sea disputes,” Lak Chansok said.
He also noted that in addition to its trade negotiations, the APEC member economies also discussed the problem of growing terrorist threats, which can negatively affect their economic cooperation in the Asia Pacific region.
“The countries reconfirmed their commitment to countering terrorism and maintaining regional stability. Moreover, the member economies agreed to strengthen energy security for sustaining their economic growth, while promoting their clean energy sources and environmentally-friendly trade and investment practices,” the analyst added.
Tran Viet Thai, deputy director for the Institute for Foreign Policy and Strategic Studies at the Diplomatic Academy of Vietnam, stressed that the year of Vietnam's presidency in APEC has been one of the toughest APEC years.
“In 2017 there has been big contradiction between two trends: continued promotion of free trade and investment; and anti-globalization and rising protectionism. Moreover, there were technical difficulties: right before the summit week in Danang city, there was a big tropical storm and heavy raining for few days causing floods nearby. Vietnam nearly missed the targets and the final documents could only be made in last minutes,” the expert explained.
In his opinion, summit in Danang helped further promote the trend of liberalization and facilitation of trade and investment in the region.
“It also issued some important documents such as Danang declaration, joint statement on future of APEC beyond 2020, framework on trans-border electronic trade. In sum, Vietnam did help APEC overcome one of the most difficult years and the rise of protectionism,” Tran Viet Thai said.
From his point of view, the event also had much of political significance.
“The summit had reaffirmed the determination of member economies to support free trade and maintain the trend of international integration and regional connections, it helped regional countries better understand the foreign policy of the US and China; and helped Vietnam consolidate political relations with important regional partners,” the analyst explained.
In turn, Rajiv Biswas, APAC Chief Economist, IHS Markit, said that a key focus at the APEC Leaders’ Meeting in Danang was the contrast in trade policies advocated by US President Trump compared with Chinese President Xi Jinping.
“Trump highlighted that his Administration’s focus would be to take a bilateral approach to trade relations with individual partner countries, rather than a multilateral approach to trade liberalization. He emphasized his concerns that the US had significant trade imbalances with a number of APEC economies, and that previous US Administrations had pursued a free trade approach which had resulted in millions of US job losses. The Trump Administration had clearly signaled a new trade policy approach on Day One after taking office in January 2017, by withdrawing from the TPP Agreement. In contrast to the US trade policy strategy, President Xi Jinping gave a clear message at the APEC Leaders’ Meeting that China supported globalization and trade liberalization, positioning China as the new global champion of trade liberalization,” the analyst explained.
China is also playing a leadership role in advancing another Asia-Pacific trade liberalization initiative under consideration by APEC economies, notably the Free Trade Area for the Asia-Pacific (FTAAP), he said.
“China has also taken a much greater economic leadership role in the APAC region through its initiative to boost the economic development of low-income Asian developing countries with the Belt and Road Initiative and the creation of the Asian Infrastructure Investment Bank (AIIB),” Rajiv Biswas said.
According to him, on the sidelines of the APEC Leaders’ Meeting, the eleven remaining member nations of the TPP announced an important decision to forge ahead with a reworked version of the TPP Agreement.
“This is a major positive factor for Asia-Pacific trade liberalization amidst growing concerns about a populist backlash against globalization and trade liberalization in some advanced economies. The new agreement, which has been named the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), will have a combined GDP of USD 10 trillion or 13.6% of world GDP,” APAC Chief Economist added.
According to Termsak Chalermpalanupap from the Institute of Southeast Asian Studies, Singapore, Vietnam deserves much credit for successfully chairing and hosting APEC in 2017.
“One important political impact is that regardless of what the US under President Donald Trump thinks about globalization and multilateralism, the rest of the world still believe in promoting trade, investment, and economic-technical cooperation through multilateral arrangements,” the expert said.
In his opinion, Trump’s America First can lead to the US isolation and deprive the country of world respect.
“Peoples around the world will turn to China and support Chinese leadership, join Chinese initiatives. Now even President Xi Jinping said in Danang that the Belt and Road Initiative doesn’t belong to China; it belongs to the world. What does President Trump offer the world? More weapons and more military movements and alliance activities?” Termsak Chalermpalanupap wondered.
Meanwhile, he stressed that the economic course of Russian leader seems to him to be successful.
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“I believe President Vladimir Putin has the correct strategy of wanting to promote globalization, free trade, and economic integration: through development of Vladivostok — with Asia-Pacific, and through ASEAN-Russia strategic dialogue partnership — with Southeast Asia,” the Singaporean analyst added.
Alan Oxley, one of Australia’s most authoritative advisers on international trade, Chairman of the Australian APEC Study Centre, RMIT University in Melbourne, Australia, expressed disappointment that the Trump Administration was “advocating trade management not trade liberalization.”
“A group of APEC economies, steered by Japan and Australia had proposed a TPP without the US – although leaving it room to join later – but that was put on hold by Canadian PM Justin Trudeau at the last minute for reasons that are not obvious [Japan announced that the document on the TTP will be adopted by the leaders of 11 countries, but their meeting did not take place, since the Canadian prime minister did not attend it],” the expert reminded.
However, commitments to further open markets and remove barriers to services remain, he added.
“Donald Trump has reduced the impetus for collective trade liberalization in the short term among East Asian economies, but support to work in APEC for open markets remains,” Alan Oxley said.
According to Nobuhide Hatasa, Professor, Nagoya University of Economics, summit in Vietnam gained international attentions as President Trump’s first time participation in a regional economic forum fostering the liberalization of trade and investment.
“His adamant views against multilateral free trade initiatives, which he thinks lead the US unfair trade deficit, were reiterated as usual in Vietnam. Although the APEC Leaders touched upon common concerns over protectionism, it also referred to ‘unfair trade practices’ and recognized ‘the role of legitimate trade defense instruments.’ On the whole, any concrete actions and measures to ambitiously promote regional economic integration and quickly progress the tasks for the eventual realization of a Free Trade Area of the Asia-Pacific ‘could not be seen in this Summit. These were the results of not only Trump’s individual claims but also a series of anti-globalism or national particularism movements arising widely in the global society,” the analyst said.
He drew attention to the fact that the main focus of this year’s APEC summit was placed on inclusive growth.
“Inclusive growth was adopted for the first time as one of the important five growth strategies during the 2010 APEC meeting held in Yokohama, Japan. The purposes of this growth strategy are to make fruits of economic growth permeate throughout the entire people and then to narrow the income gap which has been widening recently partly due to economic liberalization and globalization,” Nobuhide Hatasa said.
“Many effective actions were stated in the endorsed document so that marginalized people who are left behind the process of economic and social development will be able to more equally and fairly access economic gains and opportunities, financial products and services, and social safety nets and empowerment programs. It is one of the significant messages of this year’s APEC summit that APEC community has continued to make a deep commitment to negative aspects of market economy and globalization,” the expert concluded.