Back to basics at APEC | Politik – politik.co.nz

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Prime Minister Jacinda Ardern’s early morning APEC media conference on Saturday

In the early hours of Saturday morning, New Zealand took APEC back to its economic roots.

The silly shirts and the group hand waving photo opportunity were confined to a virtual appearance, as was the post-meeting media conference.

Instead, big headline-making great power security issues took a back seat as the leaders of the 21 member countries dealt with the single issue that has dominated their lives for the past 22 months; Covid.

Prime Minister Jacinda Ardern, who chaired the meeting, told New Zealand reporters that traditionally APEC had a very strong focus on economic resilience and economic cooperation.

“So that is where leaders tend to very much focus when we come together with the added focus on a health-based response,” she said.

“In many ways because of what Covid has done to our economies  and our people, there was a real unity of voice around what is needed; a real focus on vaccines and a real focus on recovery and an environmental recovery.”

Although the meeting brought together US President Biden, Russian President Vladimir Putin and China President Xi Jinping there was no room for super-power politics, Ardern said there were other forums that focussed on security and geostrategic issues. 

And because the whole meeting was virtual, there were no distracting sideshow issues such as were seen at COP26 with President Biden’s 82-car motorcade.

And maybe because of that the whole focus of the Ministry of Foreign Affairs and Trade could go on content rather than the logistic nightmare that would have been involved in bringing around 12000 officials and journalists and 21 world leaders, including the three super-power leaders, into Auckland.

In over 300 preparatory meetings, the Ministry and New Zealand Ministers led the way to develop an “Aotearoa Plan of Action”, which builds on previous APEC declarations and promotes liberalised trade within the region with a strong endorsement of that being governed by World Trade Organisation rules.

The Plan maintains APEC’s long-term goal of a Free Trade Area of the Asia -Pacific (FTAAP), but no one is holding their breath waiting for that to happen.

Instead, two existing trade agreements have become the focus of APEC members; the Comprehensive and Progressive Trans Pacific Partnership (CPTPP) and the Digital Economy Partnership Agreement (DEPA).

And in the case of both, geostrategic issues will continue to play a role.

APEC is technically not a congregation of states but “economies”; a semantic distinction that has allowed Taiwan as Chinese Taipei to be a member.

But now China has formally applied to join the CPTPP, and that has been followed by Taiwan.

The final chapter of the CPTPP states that “any state or separate customs territory that is a member of APEC” would be eligible for membership so long as they can comply with the pact’s rules.

That, in theory, clears the way for Taiwan to join, given that it is an APEC member.

Thatwould be oppsoed by China.

On September 22, China’s official Foreign Ministry spokesperson said that China rejected Taiwan’s accession to any agreement or organisation of an official nature.

“China’s position on this issue is clear,” he said.

But Taiwan is thought more likely to be able to comply with the CPTPP’s provisions than China which could have problems boosting the transparency of its state-owned enterprises (SOEs) and meeting the agreement’s terms on subsidies and assistance like low-cost loans to SOEs to implementing changes to existing restrictions on data flows and new standards for labour.

Other provisions would require China to take steps to strengthen intellectual property protections as well as eliminate the requirement that most foreign investors have a local partner.

Japan Prime Minister Fumio Kishida has expressed scepticism about China’s qualifications to join the CPTPP.

“We need to look at whether China can meet the high standards required by the trade pact,” he said.

“It’s still unclear if it can.”

Asked about this at the international media conference after the APEC meeting, Ardern essentially dodged the quesiton by saying trade had been a significant part of the dialogue and that agreements like the CPTPP and the Regional  Comprehensive Economic Partnership (RCEP) were “reference points”.

But neither agreement was an APEC instrument.

“As we’ve repeatedly said, any country who wishes to meet the high standard of the CPTPP, of course, is welcome to enter into that process,” she said.

Though Ardern might argue that geostrategic issues have no place within APEC, the question of China’s role in the region is a key challenge as its contest with the United States for regional supremacy continues.

APEC members are caught in a paradox. According to the Peterson Institute for International Economics, for 6 of the APEC’s  CPTPP members (including New Zealand), Chinese trade accounts for more than 20 per cent of their total merchandise trade.

That doesn’t mean that Asian countries are comfortable with China nor that they want the US to leave.

The China-US rivalry means the US and its two strongest Asian allies, Japan and Australia, are increasingly winding up their criticisms of China.

On Friday, Australia’s Defence Minister, Peter Dutton, said it would be inconceivable that Australia would not come to the military aid of Taiwan of China were to try to force reunification.

And also, on Friday, Australia Foreign Minister, Marise Payne at a joint press conference with New Zealand Foreign Minister, Nanaia Mahuta, said Australia wanted a constructive relationship with China.

“But of course, Australia will always protect our sovereignty, our national interests, our security, and that is what Australians expect of their government,” she added.

Payne went on to talk about the “Indo Pacific” region, a term that China rejects.

President Biden also used the term in his address to the APEC meeting, according to the White House readout of his remarks.

“President Biden reaffirmed our interest in serving as a strong, reliable partner to APEC economies as we pursue sustained and inclusive growth,” the White House statement said.

“The President discussed ways to unleash the economic power of the region and to deepen US economic engagement throughout the Indo-Pacific.”

President Xi foreshadowed this geostrategic rivalry in his address to the APEC CEO summit on Thursday.

“We should be forward-looking, move ahead and reject practices of discrimination and exclusion of others,” he said.

“Attempts to draw ideological lines or form small circles on geopolitical grounds are bound to fail.

“The Asia-Pacific region cannot and should not relapse into the confrontation and division of the Cold War era.” 

But that was Thursday; in his address to the leaders’ summit, he was careful to stick to the economic agenda.

He said “China was committed to building a high-standard market system and would work to make “new progress in reforming important areas and key links. “

“China will pursue high-standard institutional opening-up, continue to improve its business environment, and promote innovation-driven development of pilot free trade zones,” he said.

He said China would work to achieve a balance between a low carbon transition and ensuring the living needs of its people.

“China has all along been actively involved in regional cooperation in the Asia-Pacific, and it has endeavoured to advance openness and cooperation in the region.

“China will continue to practice true multilateralism, uphold the WTO-centered multilateral trading system, take an active part in global economic governance and promote the building of an open world economy.”

China has also applied a fortnight ago to join the Digitel Economic Partnership Agreement, which has been established by Chile, Singapore and New Zealand.

(All three were with Brunei were the founders of the CPTPP).

Korea, Canada, Japan, and the United Kingdom have all either applied or indicated they are considering joining.

The United States has not.

Trade Minister Damien O’Connor recently described DEPA as an agreement to facilitate trade facilitation measures such as paperless trading and faster customs procedures to make exporting easier and more accessible for businesses.

It also includes innovative commitments to cooperate on evolving issues such as emerging technologies and digital inclusion, he said.

Ardern said the Aotearoa Action plan did seek to improve the competitiveness of APEC economies by encouraging more uptake of digital technologies to maximise connectedness to markets.

She said APEC economies had sued the Covid crisis to digitise border processes that allowed countries o move from processes that would otherwise have taken weeks down to mere hours.

“And those changes are here to stay,” she said.

“Of course, Chile, Singapore, New Zealand have demonstrated an ability to formalise these things through DEPA, and there is interest among APEC economies to join into that agreement as well.

“But that’s just one example.

“I’d like to think that we’ve really just seen the foundations of what can be achieved through digitalisation in the plan, but also in some of the activity member economies of engagement as well.”

Ardern said the meeting was all about economies.

“We are in a position where we’re generally able to lift our eyes to the horizon and say as we continue to manage this, the pandemic within our own domestic borders, where are the areas that we can work together on our recoveries?” she said.

“How can we ensure that we’re learning from one another’s recoveries and optimising them?”

It’s not headline-making, but it may go down as the meeting that APEC returned to the vision that its founders had for it back in 1989.

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