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China-US relations

Apec summit ends without agreement as US and China’s deep divisions over trade emerge

  • What can I do, asks summit host as he points to clashes between ‘two big giants in the room’
  • Key area of contention thought to be US demand for World Trade Organisation reforms
PUBLISHED : Sunday, 18 November, 2018, 3:02pm
UPDATED : Tuesday, 20 November, 2018, 5:51am

The annual Asia-Pacific Economic Cooperation summit ended without agreement on a joint communique for the first time in its history on Sunday as the escalating rivalry between the United States and China dominated proceedings.

The impasse emerged a day after Chinese President Xi Jinping and US Vice-President Mike Pence blamed their rivals in the continuing trade war in back-to-back speeches.

Sunday’s dramatic conclusion was foreshadowed by accusations that Chinese officials had tried to strong-arm officials in Papua New Guinea, which was hosting the event, into issuing a statement that fitted what Beijing wanted. The Chinese vigorously denied the claims.

When asked about the impasse, Papua New Guinea’s Prime Minister Peter O’Neill said: “You know the two big giants in the room, so what can I say?”

China rejects claims officials tried to influence Apec communique

Instead of issuing a document that all 21 participants could agree on, O’Neill said he would issue a “chair’s statement” reflecting the issues the participants did agree upon.

He said the main area of contention was the insistence by one country — believed to be the US — that the communique would reflect the need for reform at the World Trade Organisation.

O’Neill also said there had been disagreement on the bloc’s so-called “Bogor Goals”, which require it to achieve free and open trade among its developing economies by 2020.

O’Neill said that differences on that issue had been ironed out, but that there was no such luck when it came to the topic of WTO reforms.

US President Donald Trump has previously threatened to pull out of the organisation, contending that its rules unfairly favour China.

O’Neill did not say which country objected to WTO reforms but added: “Apec has got no charter over World Trade Organisation. That is a fact. That matter can be raised at the World Trade Organisation.”

China has said it broadly supports the WTO, while European Union proposals to reform the institution are expected to be tabled at the G20 summit in Argentina, where Trump and Xi are planning to meet in an effort to resolve their differences.

Sunday’s developments also came with a side plot, with China pushing back against accusations that its officials had tried to “barge” their way into the office of Papua New Guinea’s Foreign Minister Rimbink Pato in an attempt to influence the communique.

Citing three sources, a report by Agence France-Presse said that police had been called to turn the Chinese away.

But in a press conference on Sunday afternoon, senior Chinese foreign ministry official Wang Xiaolong said the reports were “simply not true”, adding: “We are having close interactions with Papua New Guinea colleagues ... we are mostly on the same page both on the process as well as the substance of the agenda.”

History shows no one wins in hot war, cold war or trade war, Xi says

Pato meanwhile told Reuters that the Chinese officials who had come to see him had been refused a meeting because they had not made the “necessary arrangements”.

Wang said that leaders had “made considerable progress” at the summit and “reaffirmed their common commitment to keep the momentum going”.

“We will leave it now to hands of the host nation to capture the consensus that emerged during discussion,” he said.

Xi tells Apec leaders they are at a ‘crossroad in history’

A senior government source from a Southeast Asian country told the South China Morning Post the last-minute talks had been “very tense”.

“Try as we did, we couldn’t come to an agreement on certain trade issues. The gulf was too big. The US and China could not see eye to eye... I am not too surprised at the outcome,” the source said.

Another source said that while Asian countries had expected some disagreement over WTO reform, they did not expect the US and China to hold out to the extent of blocking a final communique.

The source said the failure of the bloc’s foreign ministers to issue a statement ahead of the summit, something that is usually a formality, was also down to their differences over the issue.

A source from Taiwan said delegates had been working to reach a consensus until the small hours of Sunday.

They were then told on Sunday morning that some delegations wanted to make “some comments” on the proposed communique as leaders met for a retreat and a working lunch.

Xi Jinping and Mike Pence exchange barbs at Apec summit

O’Neill told reporters that his chair’s statement would be issued later on Sunday, but it had been not released by the secretariat at 8pm local time (10am universal standard time).

Pence, who, like Xi, left Papua New Guinea on Sunday afternoon, said there were major differences between his country and China.

“They begin with trade practices, with tariffs and quotas, forced technology transfers, the theft of intellectual property. It goes beyond that to freedom of navigation in the seas [and] concerns about human rights,” he said.