The Peruvian capital Lima hosts the annual summit of Asia-Pacific Economic Cooperation (APEC). A total of 21 heads of state, including Russian President Vladimir Putin and outgoing US President Barack Obama, are expected to attend the meeting. According to Valdai Club experts, the summit will be overshadowed by concerns about the policies of US president-elect Donald Trump with regard to the Asia-Pacific.
“Undoubtedly, the atmospherics of APEC and other multilateral summits will differ from those under President Obama,” former Australian Prime Minister Kevin Rudd told valdaiclub.com in comments sent by email. “However, no one but Mr. Trump can currently claim to be know for sure how he will approach multilateralism in general, though some suspect that his instincts will be bilateral.”
Most experts asked by valdaiclub.com, including Kevin Rudd, who is now President of the New York-based Asia Society Policy Institute, agree that Donald Trump’s foreign policy views are hard to define. “President-elect Trump has not yet been sworn in, espoused a clear foreign policy doctrine, let alone appointed key foreign policy, defense and national security officials. There is therefore, at present, little basis for projections on how significantly a Trump presidency will alter Washington’s relations with APEC countries, in the security or economic spheres,” he said.
However, one of Trump’s consistent positions throughout his campaign was rejection of the Trans-Pacific Partnership, championed by Barack Obama. After Trump won the election, the White House announced it would not pursue passage of the deal, also opposed by Trump’s contender, Hillary Clinton.
“In my opinion, the TPP was almost dead [even before Trump’s election],” said Lee Jae-Young, Vice President at the Korea Institute for International Economic Policy (KIEP), in an interview with valdaiclub.com. “It will be difficult to realize it in the short and mid- term. It originally had lots of process problems including exchange rates and so on.” According to Kevin Rudd, “regional hopes in the TTP’s prospects are fading rapidly”, judging by the recent statements of governments around the Asia-Pacific.
“With the TPP on life support for the remainder of President Obama’s lame duck period, and while the region awaits clarification on president-elect Trump’s positions, the most critical challenge facing APEC economies is no longer the specter of the region’s fragmentation into mutually-exclusive trading blocs,” Rudd said. “The greater challenge is that the United States walks away from multilateral trading negotiations with the region, relying on Free Trade Agreements, imposing tariffs on regional economies, and re-erecting the barriers of protectionism. This would not just hurt the U.S. economy, in the medium term, but regional and global economic growth,” he added.
But Lee believes that countries of the region should not fear a rise in protectionism. “In this context, APEC countries need to keep the WTO rules and norms and it would make the world trade rules more stable,” he said.
The decline of the TPP means growing interest in the Regional Comprehensive Economic Partnership, comprising countries of the Association of Southeast Asian Nations and nations with which ASEAN has existing free trade agreements, including China and India, but excluding the United States. Its prospects are now “significantly greater than they were a month ago”, said Kevin Rudd. “Trade ministers and national leaders in the Asia-Pacific region have been lining up to declare renewed interest in RCEP, following president-elect Trump’s victory. Japanese President Shinzo Abe, who is meeting with Trump in New York this week, has clearly stated his view that ‘there’s no doubt that there would be a [Japanese] pivot to the RCEP if the TPP doesn’t go forward.’ This is a very clear and very definitive statement of intent,” he added.
But Lee is more skeptical about the RCEP prospects. “People can think that RECP will be promoted against the background of the failure of the TPP. However, the RCEP rules on a number of positions (including the level of openness etc.) are complicated, so I would say there is no significant progress in the RCEP in the near future,” he said.
Throughout the year, Peru has hosted the meetings of the Asia-Pacific Economic Cooperation, culminating in the summit, or Economic Leaders' Meeting, to take place in Lima on November 19-20.