APEC leaders meet amid rival trade proposals, tensions

Published Wed, Nov 5, 2014 · 03:43 AM

[BEIJING] Leaders of more than half the world's economy gather in Beijing next week for the annual APEC forum, with China and the US pushing rival trade agreements as a week-long series of international summits gets under way.

Chinese President Xi Jinping, hosting his biggest international gathering since assuming office nearly two years ago, welcomes representatives including US President Barack Obama, his Russian counterpart Vladimir Putin, and Japanese Prime Minister Shinzo Abe.

The Asia-Pacific Economic Cooperation forum, which starts with ministerial meetings on Friday before the main summit on Monday and Tuesday, accounts for more than 50 per cent of global gross domestic product, 44 per cent of world trade and 40 per cent of the Earth's population.

In the 25 years since it was set up it has long pushed free trade among its members - with mixed success in the face of bilateral deals, protectionist tendencies, and the vagaries of global World Trade Organization negotiations - and three competing concepts will vie for dominance in Beijing.

The Trans-Pacific Partnership (TPP), pushed by Washington and seen as part of its much-touted "pivot" to Asia after years leading wars in Afghanistan and Iraq, is being discussed by 12 APEC nations including the US, Japan and Australia, but market access disagreements between Washington and Tokyo are a particular hurdle.

The 10-member Association of Southeast Asian Nations (ASEAN) champions the Regional Comprehensive Economic Partnership (RCEP), which would bring together ASEAN and six countries with which it has FTAs, including China, Japan and India.

And a broader Free Trade Area of the Asia-Pacific (FTAAP), raised in 2006 by APEC leaders and currently seen as a way to eventually bridge the other two, has been embraced by China.

"We don't want to see (the) TPP rich man's club going off in that direction and RCEP going off in this direction," Alan Bollard, APEC executive director and former head of New Zealand's central bank, told AFP. "We want to see them converging." Wang Shouwen, an assistant minister of commerce, told reporters Tuesday that China "hopes concrete measures will be taken to make progress towards the realisation of the FTAAP" at APEC, specifically seeking an "early date" for a timetable to implement a roadmap for the deal.

"There is no such issue as blocking or clash," he insisted.

But Chinese analysts are suspicious that TPP-driving Washington wants to thwart FTAAP because of Beijing's interest in it.

"It is natural that the US would show less enthusiasm in pushing forward FTAAP whose establishment will inevitably offset the impact of Trans-Pacific Partnership," Bai Ming, of the Chinese Academy of International Trade and Economic Cooperation, told China's Global Times newspaper Tuesday.

Consensus-based APEC, whose members are as diverse as the United States and Papua New Guinea, was once the main venue for pan-Pacific summits.

But it will be followed immediately by the East Asia Summit (EAS) in Myanmar, and then the G20 summit in Brisbane, Australia.

Key countries such as the United States, China, Japan, Australia and Indonesia belong to all three groups, but the rise of the EAS and the upgrading of the G-20 to a summit-level event in 2008 amid the strains of the global financial crisis have taken some of the lustre off APEC.

"If there are no clear accomplishments for an APEC meeting as opposed to other meetings, why are we having two Asian meetings, three international meetings all at the same time?" said Charles Morrison, president of the East-West Center in Hawaii.

"APEC is more than about trade," he said, adding that with growth slowing it was important for the organisation to have a "broad agenda".

"The key thing at stake for APEC is its relevance and what it actually does for people." Beijing has imposed a series of measures to combat its notorious pollution, including traffic restrictions, factory closures and a six-day holiday for public sector workers.

APEC summits also serve as a venue for bilateral meetings between leaders, and it the first time Obama has attended for three years, after he missed the previous two gatherings in Indonesia's Bali and Vladivostok in Russia.

Political tensions among members include maritime territorial disputes between Beijing, Manila and Hanoi, and also between China and Japan, with one focus of the gathering being whether Mr Xi and Mr Abe can hold a more significant meeting than the two brief handshakes and verbal exchanges they managed at last year's APEC and the G20 summit in Russia.

Relations between the Asian giants, haunted by the history and legacy of Japan's World War II aggression, have been largely on ice since late 2012 as a long simmering dispute over uninhabited islands in the East China Sea controlled by Japan but also claimed by China has intensified.


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