San Francisco, the most Asian city in the United States, is hosting the 30th Asia-Pacific Economic Cooperation (APEC) Leader’s Summit on November 15-17, this year.
The Summit, as in the past, will have important absentees including the Russian President Vladimir Putin, due to Moscow’s invasion of Ukraine; and the Hong Kong Chief Executive John Lee, due to sanctions imposed by the US.
Surprisingly, the president of Mexico, Andrés Manuel López Obrador, decided to attend, despite his initial refusal to do so, due to a diplomatic conflict with the current Peruvian President Dina Boluarte. For López Obrador it is its second international summit since his inauguration - the first was the North American Leaders Summit in January this year - but, since Mexico was the host, it did not require much travel for the Mexican President. López Obrador usually skips international forums, leaving them to his foreign minister.
The absentees in San Francisco are being kept to the minimum. Last year at the APEC Summit hold in Thailand, Biden, López Obrador, Putin, the Peruvian President Pedro Castillo, and South Korean President Yoon Suk-yeo did not attend. But speaking about the several meetings called by Biden, so far, his administration has not been able to host a single international summit during his term, virtual or not, with the participation of all the concerned parties. Someone/somebody is always left behind or not invited.
Yet, San Francisco’s APEC Summit is important for other reasons. The meeting between US President Joe Biden and his Chinese counterpart Xi Jinping is making huge headlines all over the world. Even though the two met virtually back in 2021 at the APEC Summit hosted by New Zealand in 2021, Vice President Kamala Harris attended instead the APEC Meeting in Thailand in 2022. Tensions between the US and China are at their peak, with an ongoing trade war, and also discursive disputes over Taiwan and international security in Asia. Las February, a presumably Chinese spy-balloon drifted from Alaska to the Carolinas passing over U.S. military sites, including bases where nuclear warheads are stored. Beijing said this was a meteorological artifact, but, nobody believed that and a US F-22 destroyed the balloon with a missile. The PR China protested and the mysterious balloon caused major turmoil in bilateral links. Thus, political relations seem to be at their lowest level since the triumph of the Chinese Revolution in 1949 and the ascendance of Mao to power.
Even panda diplomacy is quickly extinguishing: once considered a powerful diplomatic tool to improve relations between the US and the RP China, today pandas in American Zoos are being returned to the Chengdu Panda Research Center, possibly as evidence of how damaged is cooperation between the two countries.
The US has constantly insisted on human rights violations by PR China and Biden has hosted two virtual Summits on Democracy - in 2021 and 2023 - without inviting China - and several other countries, including political and trade allies such as Saudi Arabia, UAE, and such.
Evidently, for Biden the success of the APEC Summit is critical. At a time when the Russia-Ukraine war faces stagnation; when Israel is countering Hamas actions by targeting innocent civilians - including bombing hospitals at the Gaza Strip - and a polarized international environment, many look at the US as a weak and declining power, incapable of leading the world to peaceful and prosperous outcomes, not to mention succeeding in international summits. Who is in charge now, the world seems to be asking.
APEC is, of course, about trade. One may remember this forum was born back in 1989 as an Australian initiative. At that time, the stagnation of the then Uruguay Round of Multilateral Trade Negotiations led by the General Agreement on Tariffs and Trade (GATT) made countries fear the worst possible protectionist scenario. Australia, whose major trade partners at that time were Japan and the United States, proposed a meeting with the two of them, plus Canada and New Zealand, to discuss trade matters and possibly unlock the Uruguay Round negotiations. Instead, the GATT faced several problems in reaching agreements on each of the negotiation group and the original APEC meeting turned attractive as a forum to maintain a dialogue on trade and investment within the Asia-Pacific region. Mexico joined APEC in 1993 - after negotiating the North American Free Trade Agreement with Canada and the US. And today, this forum has 21 member economies, probably much more than Australia originally expected. The Uruguay Round eventually succeeded in reaching agreements and the World Trade Organization (WTO) was born in 1995.
The world has changed a lot since those days. Today, WTO faces stagnation in dealing with multilateral trade negotiations. Countries have privileged bilateral and/or regional trade negotiations. PR China has become the most important economy in the world. Trade wars have emerged. Yet, APEC is still on the run and it has been useful as a mini lateralist forum, that is, an alternative group where countries, including major trade powers in the Asia-Pacific area such as PR China and the US maintain a dialogue on critical issues of relevance to the world economy. Three trends seem to shape today’s global economy. One, a sharp deterioration of income distribution worldwide so that today’s generations have a lower quality of life compared to their parents - and the achievement of the Sustainable Development Goals looks far from succeeding. Two, the supply-demand shock created by the SARS-CoV2 pandemic. And, three, geopolitical pressures, mainly due to the war in Ukraine and also as a result of trade sanctions applied by the US against the PR China, although the Middle East crisis between Israel and Hamas at the Gaza Strip makes the region and the world more insecure.
Now, what can APEC do to improve the international environment and contribute to a constructive engagement between the most powerful countries - and the rest of the participants, as well? To start with, protectionism is rising rapidly. And it is quite different from merely limiting cross-border trade, as in the past. Today, protectionism has its roots in de-globalization, a political process linked to geopolitical rivalries with enormous consequences for the world economy. Then comes re-shoring, a trend resulting from re-industrialization at home to protect companies from international crisis, thus preventing competition at home and impacting global production chains. The so-called near-shoring trends are very visible, for instance in Mexico. And, USMCA, can also be seen as a result of the US somehow de-coupling from the world economy, as its companies operating in the PR China have now moved their operations to Mexico to reinforce regional value-chains to avoid rising operating costs. The increase in public investment in developed economies in areas such as semiconductors seem to emulate the Chinese model, consisting in stimulating consumption at home and abroad. In a sense it is a paradox that the US is now punishing the PR China for industrial policies that both the Americans and other developed economies have been endorsing.
Thus, APEC is an open door to discuss these trends and to manage unavoidable geopolitical tensions between the US and the PR China; and between the US and Russia - although president Putin will not be attending, as explained, a huge Russian delegation led by the Deputy Prime Minister Alexey Overchuk will represent Moscow at the summit. In addition to other bilateral encounters of relevance to the participants. For example, the Mexican and Peruvian presidents could take advantage of the APEC Summit by meeting in a constructive way to sort their differences out, although there is no sign, as yet, of this happening Note to the reader: Peruvian President Dina Boluarte has said that diplomatic relations between Peru and Mexico would be reduced to the minimum due to her discontent with the opinion and criticism from Mexican President López Obrador. The Mexican president has supported former Peruvian President Pedro Castillo, who attempted a coup d’état, then asked for political asylum to Mexico and finally was arrested by Peruvian authorities before he could reach the Mexican diplomatic mission.
Going back to the US-PR China meeting, the key issue for both Biden and Xi is to avoid current diplomatic relations from getting worse. Then comes negotiations on critical issues. For instance, Biden has blocked the export of advanced chip technologies to prevent their military use in PR China. To counter this, Beijing has limited the US access of critical minerals. It is true in recent weeks that State Department Secretary Antony Blinken has travelled to Beijing to ease the tensions and also the Chinese Foreign Minister Wang Yi has been in the US for the same reason. The US does not need more confrontations at a time when two major wars are taking place simultaneously in the world. The PR China does not need a trade war and nor does it need additional political misunderstandings with its most important trade partner. So, obviously geopolitical tensions will remain after the APEC Summit, but some may diminish depending on the political will and mood of the concerned parties. Let’s wait and see!
Editor’s Note: The above guest column was penned by María Cristina Rosas, a professor and researcher at the Faculty of Political and Social Sciences of the National Autonomous University of Mexico in Mexico City. The column appears in The Rio Grande Guardian International News Service with the permission of the author. Rosas can be reached via email at: mcrosas@prodigy.net.mx
