Ensure Apec stays relevant
Many were watching United States President Donald Trump last week at his first Asia-Pacific Economic Cooperation (Apec) Summit, hoping to see how his “America first” policy would play out.
Trump had vowed to shake up the global trading system during his election campaign last year, and one of his first acts in office was to pull out of the Trans-Pacific Partnership (TPP) trade deal.
At the Apec meeting in Danang, Vietnam, last week, he kept to his promise. He used the occasion to criticise countries for unfair trade practices that have harmed US companies and workers, and declared he would no longer enter into multilateral trade deals.
His fiery speech seems to have had some influence. In a departure from the usual joint statements, leaders of the 21 Apec economies pledged to address “unfair trade practices” and called for the removal of “market-distorting subsidies and other types of support by governments and related entities”.
At the same time, they reiterated support for “free and open” trade and investment in the region. This was also demonstrated by the 11 economies still in the TPP when they reached an agreement on the deal.
This show of support for multilateralism and an open, rules-based order is key if Apec is to remain relevant.
Apec leaders must also ensure the gains of trade and globalisation are more fairly distributed among their people at home. In many countries, stagnant incomes and the lack of safety nets have led to a rise in protectionism and anti-globalisation sentiments.
Addressing this at the Apec leaders’ meeting, Prime Minister Lee Hsien Loong said governments need to play an active role in mitigating the “winner takes all” effect of technological disruptions and globalisation.
Besides his tirade against unfair trade, Mr Trump spoke of the importance of getting economic security right. He said the US had been reminded time and again that “economic security is national security”.
With Asia-Pacific facing political and security challenges, this is something Apec leaders must bear in mind as they work towards keeping the grouping relevant and getting economic relationships right.
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