Apec impasse raises stakes for trade war talks in Argentina
- Port Moresby meeting ended with no final communique from members, reflecting the bad blood between the United States and China, but both nations must realise there is nothing to be gained from widening their showdown
Surprises are rare when leaders of the 21-member Asia-Pacific Economic Cooperation (Apec) grouping hold their annual meeting. Events are usually highly choreographed, from the joint statements to the traditional family photograph featuring colourful shirts. There were the usual handshakes and smiles in Port Moresby at the weekend, but with China and the United States locked in a trade war and vying for influence in the region, this year was bound to be different; for the first time, there was no final communique. A spillover of the bad blood on show into talks between presidents Xi Jinping and Donald Trump alongside the G20 summit in Argentina next month has to be avoided, for the sake of domestic economies and Asian and global economic well-being.
The impasse was the result of differing visions of trade held by China and the US. Trump’s staying away and sending his vice-president, Mike Pence, signalled his disregard for Apec’s ideal of economic cooperation. Meaningful discussion turned into an open squabble highlighting the strategic geopolitical rivalry between the world’s two most important economies.
Xi denounced “unilateralism and protectionism” and reiterated a call for leaders to uphold free trade and promote a multilateral system. Pence responded with a direct attack, contending the US had great respect for Xi and Beijing, “but as we all know, China has taken advantage of the United States for many, many years and those days are over”. He furthered a tough approach presaged last month in a speech at the conservative Hudson Institute think tank in Washington that laid out a long list of alleged offences some perceive as the beginnings of a new cold war.
Trump’s economic nationalism dismisses multilateral approaches and imposes trade tariffs to create divisions. Xi was forced to defend China’s “Belt and Road Initiative” of shared development after Pence claimed nations that joined would only be entrapped in debt to Beijing. A toxic environment has been created that raises doubts about the worth of Apec and other multilateral organisations and diminishes hopes for an agreement when Xi and Trump meet on December 1 in Buenos Aires.
There is a sliver of hope; the many bilateral deals struck at Apec show that it is more than just a talking shop. Trump also calls Xi a “good friend” and the next round of trade negotiations have been moved from Washington to the Argentinian capital, making for more effective discussion. There is a trust deficit, but greater awareness of the benefits of the relationship will create a more accommodating atmosphere. Nothing is to be gained by worsening and widening the trade war.