Recent events in the Indo-Pacific left New Zealand behind. But the island nation has used APEC 2021 effectively to enhance its stature
The summit of the Asia Pacific Economic Cooperation (APEC) was held on 12 November. It is among the most impactful and yet lesser-known meetings in the region. It was chaired by New Zealand and held virtually. It was the last among the major summits normally held in the last quarter of a year.
The Summit calendar normally begins with the UN General Assembly in September and the G20. In the Indo-Pacific, the ASEAN summit, the East Asia Summit and the ASEAN meetings with its dialogue partners at summit level take place. The APEC is the final major summit of the year. This time it was in the shadow of the COP26 in Glasgow.
APEC consolidated ideas which emerged at several of the summits. Unlike other summits, the APEC is actually a leader’s meeting from the 21 economies of the region. The economies include Taiwan and Hong Kong, and thus are not called a summit of States.
India has not been a member of APEC, and from time to time has shown interest in it. An effort was made in 2013 by Indonesia as APEC Chair, to admit India. As in other fora, the Chinese withheld support. Since APEC works on a consensus model, the moment passed without India’s admission. Since then, India’s enthusiasm to join APEC has withered though its profile in the region through the Indo-Pacific policies has enhanced.
APEC 2021 was New Zealand’s big moment. Recent events in the Indo-Pacific left New Zealand behind. However, when the AUKUS was announced in September, the absence of New Zealand was noted. New Zealand had quickly accepted the Chinese application to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
New Zealand has used APEC 2021 effectively to enhance its stature. The Aotearoa Plan of Action, (APOA) which was approved by the leaders, covers most of the current global crisis. It dealt with efforts to overcome the impact of the pandemic, respond to climate change, enhance economic recovery, and build inclusive growth. It feeds into the Putrajaya Vision 2040, a plan for APECs work until 2040.
While focusing on expansion of economic activity the APOA grasps issues of decarbonisation and empowering indigenous peoples. The Joint Declaration had five focal points.
It turned down vaccine nationalism and noted APEC members had reduced tariffs on vaccines and pandemic related medical equipment. Export bans were not supported. Second, support the digitalisation of trade processes to provide facilitation and reduce transaction costs. These reforms figure in the processes of most APEC members.
Third, APEC decided to take further practical steps towards decarbonisation. Subsidies to fossil fuels were discouraged.
New Zealand’s initiative brought in the emphasis on indigenous economies as being a part of economic recovery. About 270 million indigenous people live in the APEC region, thus emphasising their importance. Finally, APEC determined that it would find ways to reduce bureaucratic costs of doing business and the ease of setting up businesses would be enhanced.
The APEC Summit is normally accompanied by a ministerial meeting, as well as a CEO Summit. Sectoral Ministerial Meetings for Trade, Structural Reform, Food Security, Health, Women and the Economy, Small and Medium Enterprises, and Finance are held. A Voices of the Future Forum, which looked at the role of youth and their agenda, was added. New Zealand should be complimented on having a focused APEC meeting, even though the context in which it was held was less than stable.
The APEC is embedded in the Indo-Pacific region and reflects the geostrategic tensions, particularly between China and the United States. These now spillover to competing visions of functional cooperation in the region. The APEC 21 includes seven of the 10 ASEAN, 5 East Asian economies, Russia, United States, Australia, New Zealand, Papua New Guinea, Chile, Peru, Mexico and Canada. NAFTA is fully in; 14 of the 18 EAS members are in. 12 of 15 RCEP members are in. It straddles the CPTPP and RCEP arrangements and now will move towards its own Free Trade Area of the Asia-Pacific (FTAAP) which will contribute to high standard and fulsome regional engagement.
The APEC meeting preceded the Biden-Xi meeting of 15 November, giving it an edge it may have wanted to avoid since both the US and China were jostling. Taiwan was pushing its membership of the CPTPP.
President Biden emphasised open trade, investment, competitiveness and efforts to the FOIP. A sustainable world which will create employment and opportunities for youth was emphasised. The President’s statement was clear that the US was now firmly pivoted for economic engagement with the Indo-Pacific.
Chinese president Xi Jinping emphasised economic and technological cooperation which China is rapidly expanding with the APEC countries. He promised greater participation through Chinese institutions to expand engagement with the APEC; but warned against exclusive clubs within the region and enhancement of geopolitical cleavages. APEC recognises the issues of climate change emanating from the COP26 and the results of the G20 meeting in Rome.
APEC was hosted in 2020 by Malaysia and Thailand will host in 2022. The US has offered to host the APEC leaders meeting in 2023 but due to a lack of Russian confirmation, no consensus could be achieved. This is quite rare in APEC circles. It shows that the US pivot to the region is resisted by China and Russia, often working in tandem.
Germany is not in APEC but New Zealand prime minister Jacinda Ardern invited outgoing German Chancellor Angela Merkel to speak at the Asia Pacific Business Summit. Merkel emphasised that political leaders must make timely interventions for public good and it is their duty to protect society at all levels from all threats. She specifically referred to people remaining unvaccinated across age groups, which was a concern to society at large.
This would challenge health systems, which were already overwhelmed by the pandemic. In her conversation with Microsoft president Brad Smith, Merkel focused on dealing with the pandemic and climate change whose impact was difficult to comprehend at the start, but was affecting people across the board.
Leadership demanded an understanding of what the impact of such events could be in our societies. Since our societies are now globally interlinked, the impact could be much more beyond borders.
The writer is former Ambassador to ASEAN. Views expressed are personal.