KPMG’s Merriden Varrall discusses the upcoming Asia-Pacific Economic Conference (APEC) Leaders’ Summit. It is a tumultuous time for the region, and APEC 2018 provides a real opportunity for leaders to agree on the kinds of reforms that could make a positive difference.
Leaders from 21 countries in the Asia-Pacific will this Saturday meet for the Asia-Pacific Economic Conference (APEC) leaders’ summit in Papua New Guinea (PNG). This follows a year of preparatory meetings, and the business leaders’ forum this week.
According to its website, APEC’s overall goal is “to create greater prosperity for the people of the region by promoting balanced, inclusive, sustainable, innovative and secure growth and by accelerating regional economic integration.” It aims to do so by, inter alia, liberalising and facilitating trade and investment at the border, across the border and behind the border; reducing the costs of cross-border trade to assist businesses; and simplifying regulatory and administrative processes. APEC decisions are reached by consensus, and commitments are made on a voluntary basis.
Tensions between the United States (US) and China are making it increasingly difficult for Asia-Pacific countries to maintain what has always been a delicate diplomatic balancing act – especially for those with competing claims in or concerns about the South China Sea (SCS). Several countries, such as Sri Lanka, Indonesia, and Malaysia have been reconsidering existing infrastructure deals with China. President Duterte in the Philippines uses language emphasising his meek and humble attitude towards China, and working on cooperation in the SCS. At the same time, he maintains robust security cooperation with the US.
The dynamics between the two powers is also affecting how countries in the region interact with each other, and how they view regional and global institutions. The apparent thaw in relations between China and Japan is a good example of the former. Fears over deepening global trade tensions are further encouraging some countries, such as South Korea, Thailand, and Indonesia, to actively consider joining the revamped Trans-Pacific Partnership. Concerns over how to mitigate the fallout of the trade war has galvanised increased interest in the China-backed Regional Comprehensive Economic Partnership.
The rising US dollar, which has affected economies like Indonesia, and the existential crisis of adapting to and mitigating climate change also loom menacingly on the horizon for many Asia-Pacific countries.
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