How APEC maintains the delicate balance required to retain its relevance

The Asia-Pacific Economic Cooperation (APEC) held its Economic Leaders’ meeting on 16 and 17 November in San Francisco in the United States. The US last hosted the summit in Honolulu in 2011 after having hosted the first one in 1993 at Blake Island. The last three summits were in Kuala Lumpur in Malaysia, Wellington in New Zealand, and Bangkok in Thailand. Peru, Korea and Vietnam are forthcoming summit hosts. Initially APEC established in 1989, was a ministerial dialogue, and the summits only started in 1993 at the behest of the Clinton administration. APEC headquarters are in Singapore and not in Jakarta as it is not an ASEAN centric body. It began with six and now has seven ASEAN members out of its 21 members. APEC’s 12 Charter members were Australia, Brunei, Canada, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and the United States. China, Hong Kong and Chinese Taipei (Taiwan) joined in 1991, Mexico and Papua New Guinea in 1993, Chile in 1994. The last expansion took place in 1998 when Peru, Russia and Vietnam joined. Since then, expansion is checked. An effort by Indonesia as the Chair in 2013 to include India, with US support, was negated by China and the position holds. Of the 21 members, seven are from ASEAN; only Myanmar, Laos and Cambodia are omitted. The same ASEAN members are committed to the Indo-Pacific Economic Framework (IPEF) as well. Among ASEAN dialogue partners, Australia, Canada, China, Japan, Korea, New Zealand, Russia and the US are members. India is the only EAS member not in APEC. Papua New Guinea, Chile, Mexico, and Peru are members too. The larger Latin American economies like Brazil and Argentina are not members. The APEC is an economic and functional cooperation institution, which focuses on finance, central bank governors, transport, trade, disaster management, food security, and more recently on health and energy as well as SMEs. Though not a political body the main interest at the last summit was on the China-US bilateral meeting without which perhaps the leaders’ meeting would have been tense. As Xi Jinping did not attend the G 20 summit in New Delhi, which Biden did, they could not meet since the Bali G 20 summit in November 2022. Biden did have an underplayed meeting with Chinese Premier Li Qiang in New Delhi. Also, US Vice President Kamala Harris and Li met in Jakarta in September 2023 alongside the East Asia Summit (EAS). Besides restoring the summit, Xi-Biden also agreed to renew military communications which were suspended by China. On all other matters, there is no agreement because China desires that its path of development and engagement with partners should not be impeded by the US. This is particularly so in the Indo-Pacific where China prefers the term Asia-Pacific as in APEC and wants the US to avoid seeking ASEAN’s support in challenging Chinese hegemony. In the post-Cold War period, APEC was one of the early multilateral organisations to emerge. It was presumed that with Cold War bipolarity ebbing, the new order would bring the benefits of economic globalisation. The path seemed to be towards regional trading arrangements. The North American Free Trade Agreement (NAFTA) was under negotiation and APEC was considered a new channel for integrating Asian growth with the Pacific since all three NAFTA countries – the US, Canada and Mexico – were part of APEC. The APEC countries lacked cohesiveness in traditional terms but were united by the prospects of better economic growth and a common economic outlook. Promoting free trade and economic integration was the motive of APEC which wanted to become the new supply chain in the Asia-Pacific. The diversity of developed and developing countries coming together was buttressed by China, who allowed Hong Kong and Taiwan to join as economic entities due to which APEC was seen as a collection of economies rather than states. China has to tolerate the presence of Taiwan in APEC which is among the largest organisations that Taiwan is a member of. Now both China and Taiwan are vying for membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Two trade related economic frameworks were discussed around APEC. The US anchored IPEF showed buoyancy on supply chains, tax and corruption and clean energy, decarbonisation, and infrastructure. The failure of the US to establish the trade arrangement under IPEF was disappointing for IPEF members who mostly are APEC members other than India and Fiji. Member countries of the CPTPP also met around APEC but then the US is not part of CPTPP! Washington’s difficulties in providing trade avenues to its partners limits its economic leadership in the region. It should be noted that at the 2020 summit in Malaysia, the APEC leaders supported the Putrajaya Vision 2014, which is a consensus document for ‘an open, dynamic, resilient, and peaceful Asia-Pacific community by 2040, for the prosperity of all our people and future generations’. To achieve stability in the region, the focus for this summit was on sustainability, inclusion, resilience and innovation. A large number of CEOs were involved, many of whom are deeply embedded in Asia, in the Indo-Pacific in general and China in particular. Last year, at APEC, Xi Jinping had reiterated China’s commitment to promoting a shared future in the region including stable supply chains, economic upgradation, inclusive development and harmony in the region. In order to attain these, peaceful engagement between China and the US is imperative. If successful, it can be the locomotive for sustainable growth and shared benefits. The Xi-Biden meeting promoted a cooperative ambience where engagement rather than confrontation was emphasised. This catalysed the Xi-Kishida meeting. They moved faster on trade and agreed to establish a new dialogue framework which may ameliorate the tensions arising out of restrictions on semiconductors and other key technology trade. Reiterating its effort to be the premiere forum for economic cooperation in the Asia-Pacific region, APEC seems determined to deliver a free, open, fair, non-discriminatory, transparent, inclusive, and predictable trade and investment environment, and a well-functioning WTO dispute settlement system which will enable and empower the Free Trade Area of the Asia-Pacific agenda. It also pursued the APEC Connectivity Blueprint (2015-2025). It seeks to triple renewable energy capacity globally, create openings for MSMEs and start-ups to grow, including through opportunities to enhance competition. Also, the APEC Internet and Digital Economy Roadmap (AIDER), is anticipated to foster an inclusive digital economy for all members. The APEC pursues topics about climate change, AI, food security, energy security, and what each member can contribute to facing challenges that the new world economy has brought. However, APEC, not being a strategic institution, keeps its focus on functional cooperation in the hope that its sidelines and other regional meetings will keep the ambience good enough to pursue regional good. The writer is a former ambassador to Germany, Indonesia, Ethiopia, ASEAN and the African Union. He tweets @AmbGurjitSingh. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views. Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook ,  Twitter  and  Instagram .