What is APEC and why was India’s membership bid rejected?

In the world of diplomacy, the Asia-Pacific Economic Cooperation (APEC) is creating a lot of buzz. A meeting of the grouping in San Francisco began on 11 November with the Leaders’ Week and will conclude with the Economic Leaders’ Retreat on 17 November. It was on the sidelines of this gathering that US president Joe Biden met his counterpart Xi Jinping. India’s Union Minister for Commerce and Industry, Piyush Goyal, is attending the APEC summit even though India is not a member of the bloc. Other big leaders at the APEC conference are Japanese prime minister Fumio Kishida, Canada’s Justin Trudeau, and Indonesian president Joko Widodo. We take a look at what is APEC and why India is not a member of this grouping. What is APEC? The Asia-Pacific Economic Cooperation (APEC) is a grouping of economies around the Pacific Ocean that aims to promote trade, investment, and economic development in the region. The bloc is looking to “leverage the growing interdependence of the Asia-Pacific and create greater prosperity for the people of the region through regional economic integration”. APEC started with 12 members in 1989 but has over the years grown to 21, which includes the US, China, Russia, Japan and Australia. The other members include Brunei, Hong Kong, New Zealand, Papua New Guinea, the Philippines, Indonesia, South Korea, Canada, Mexico, Peru, Chile, Malaysia, Vietnam, Singapore, Thailand and Taiwan. Taiwan and Hong Kong, which China stakes claim to as its territory, participate separately in the forum. [caption id=“attachment_13394712” align=“alignnone” width=“640”] Brian Nichols, assistant secretary of State for Western Hemisphere Affairs, joins US trade representative Katherine Tai and Emily Fischer, director for Southeast Asia and the Pacific, for the Office of the US Trade Representative, in a session of the APEC Summit, in San Francisco. AP[/caption] APEC accounts for about 62 per cent of global GDP and almost half of global trade. It operates based on non-binding commitments with decisions reached by consensus and commitments undertaken voluntarily, according to a report in Reuters. Why is India not a member of APEC? India attempted to join APEC in 1991, the year the Indian economy was liberalised. A majority of the members of the grouping were in favour of India’s inclusion but some opposed it. They had reservations about India’s “protectionist instincts” and cited its records on the economic reforms, according to a report in NDTV. There was also a freeze on membership since 1997. However, it was not extended in 2012. The US-India Joint Strategic Vision for the Asia-Pacific and Indian Ocean Region issued in 2015 stated, “The United States welcomes India’s interest in joining the Asia Pacific Economic Cooperation forum, as the Indian economy is a dynamic part of the Asian economy.” In 2016, then Union Minister for Commerce and Industry Nirmala Sitharaman told Parliament that the request to join was based on India’s geographical location, the potential size of the economy, and degree of trade interaction with the Asia-Pacific, according to a report in The Indian Express. India remains an observer of APEC and has been expanding trade and investment ties in the region since the 2000s. How can India benefit from APEC membership? “Becoming an APEC member would bring several benefits for India, such as promoting closer economic relations, facilitating trade and investment flows and opening market access to major economies. Aligning with APEC by simplifying and harmonising trade procedures and regulations could boost India’s exports, attract foreign direct investment and support domestic initiatives like ‘Make in India‘,” write Geethanjali Nataraj, a principal at the Confederation of Indian Industry and Nikhil Joshi, a research intern, in a piece published on East Asia Forum. A membership could encourage the country to “adopt best practices, streamline trade processes and reduce transaction costs”. It could facilitate “technology transfer” in important areas like information technology, pharmaceuticals, biotechnology, renewable energy and manufacturing, the article says. [caption id=“attachment_13394742” align=“alignnone” width=“640”] Attendees make their way to the APEC summit held at Moscone Center in San Francisco. AP[/caption] APEC’s strength lies in its ability to get countries to work together on big initiatives and to ease business relations without binding agreements. Economists point to how it contributed to a reduction of tariffs and other trade barriers. How will India feature in the summit? Piyush Goyal is in San Francisco to participate in the summit. He attended the welcome reception of leaders of APEC and guest economies like India, which was hosted by US president Joe Biden and First Lady Jill Biden. Goyal also attended the Indo-Pacific Economic Framework (IPEF) ministerial meeting. Biden is hoping to highlight progress on the new IPEF, which started last year after former US President Donald Trump withdrew from the more popular Trans-Pacific Partnership , reports The Associated Press. IPEP comprises 14 members of which 12 are part of APEC apart from India and Fiji. Ahead of the APEC summit, American diplomat Atul Keshap told ANI, “… for the United States to invite India to the APEC summit in San Fransisco, to me, is a really big deal… I think this (Biden) administration is actually putting a lot of effort into trying to reach out to India to include it in our trade efforts around the world. Look at the Indo-Pacific Economic Framework.” [caption id=“attachment_13394762” align=“alignnone” width=“640”] US president Joe Biden and China’s Xi Jinping walk in the gardens at the Filoli Estate in Woodside, California, on the sidelines of the APEC conference. AP[/caption] What’s the aim of the APEC summit this year? The main event of this summit was the meeting between Biden and Xi , where they reached agreements on f entanyl and military communication. The US has chosen the theme “Creating a Resilient and Sustainable Future for All” for APEC 2023, reports Reuters. It stated that the summit aims for an “interconnected, innovative, and inclusive” region and “to advance a free, fair, and open economic policy agenda that benefits US workers, businesses, and families”. With inputs from agencies