The US-China rivalry is biggest threat to Apec
Andrew Hammond says attempts to forge a consensus at the Asia-Pacific Economic Cooperation forum this week are being undercut by tensions between Washington and Beijing
While much of the globe is focused on the COP26 climate summit in Scotland, a country at the other end of the world is hosting another key meeting this week – the 21-member Asia-Pacific Economic Cooperation (Apec) forum leaders’ session, with US President Joe Biden and President Xi Jinping due to meet virtually.
This year’s Apec, chaired by New Zealand, will in the words of Prime Minister Jacinda Ardern seek to “chart a path to recovery out of a once-in-a-century crisis” caused by the pandemic. This has been the biggest economic and political shock since
World War II for Apec’s nearly 3 billion population who generate around 60 per cent of global GDP.
Ardern will seek to promote an inclusive, sustainable and resilient recovery and, after around 340 preliminary Apec meetings, progress has been made. This includes an agreement to a five-year programme of economic reforms that will kick-start growth, and create new jobs.
Apec members have reportedly agreed this week to reduce or eliminate many tariffs and border hold-ups on vaccines, masks and other medical products important to fighting the coronavirus.
New Zealand also said on Wednesday that the bloc had agreed to reiterate a “strong stance” against vaccine nationalism, is committed to tackling climate change post-COP26, and progressing on trade too.
However, important as these commitments are, the sessions today and tomorrow are likely to show yet again that Apec’s consensus-driven approach is creaking. Even before the pandemic, the Apec consensus model was strained, with the group unable to agree on a communique at its 2018 meeting, while the 2019 session was cancelled due to protests.
Ardern’s efforts to promote a pan-Apec approach are being undercut by intra-forum squabbles, especially between the United States and China, but also Taipei and Beijing, which have both put in applications to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). Beijing opposes Taipei’s bid.
At the heart of the debate on these issues are contrasting US and Chinese visions of the regional order
It is US-China bilateral rivalry, however, which could most impede Apec. One manifestation of this tension is different views over the US offer to host Apec in 2023, which would be the first time since 2011. Both China and Russia are cool on the US proposal, with neither yet agreeing to it.
The US desire to host the 2023 event reflects the White House’s broader strategy. Biden, just like Beijing, wants to shape the regional order, in the US’ case, to demonstrate its commitment to a free and open Asia-Pacific. What is being referred to here is the nascent US strategy to shape the Apec landscape.
As the Biden team flexes its muscles, it is aware of the Chinese juggernaut being mobilised by Xi in the form of the Belt and Road Initiative, the Regional Comprehensive Economic Partnership (RCEP) and the proposed Free Trade Area of the Asia-Pacific (FTAAP).
While Xi has said that the FTAAP does not “go against existing free trade arrangements”, at the heart of the debate on these issues are contrasting US and Chinese visions of the regional order. Beijing’s push for the Belt and Road Initiative, RCEP and FTAAP provide a non-US alternative model for economic integration shaped by Beijing with its interests centre stage.
It is in this context that the Biden team is beginning to set out its own stall. This includes the new Aukus alliance, comprising Australia, the US and the United Kingdom. A key remaining question for US allies therefore is whether the Biden team will now step up to the plate and develop a comprehensive, well-funded grand strategy to embed US influence. In the post-war period, the US has undertaken a global institutional-building project to encourage the growth of democracy and open markets across the world, including Apec itself.
Yet, with Trump pulling the plug on US participation in the Trans-Pacific Partnership, a vacuum now exists. The danger for Washington is that, unless Biden acts decisively, irresistible momentum could now build for a regional architecture which favours Beijing, damaging US influence not just with local allies, but potentially beyond, too.