LDN - Business

APEC fails to live up to its name amid U.S., China acrimony

[November 19, 2018] By Tom Westbrook and Charlotte Greenfield

PORT MORESBY (Reuters) - The C in APEC stands for Cooperation. But when the two biggest members are fighting a trade war and using the forum to attack each other's policies, it was always going to be hard work delivering on that.

The weekend's Asia-Pacific Economic Cooperation summit in Port Moresby was one of open disagreement, led by disputes between the United States and China over trade, security, and who would be the better investment partner for the region.

As APEC approaches its 30th anniversary, the failure to agree on a communique for the first time calls into question its relevance in a crowded summit calendar and as the Trump Administration makes clear its aversion to multilateralism.

"It does mark the death of APEC's founding trade vision," Euan Graham, executive director of La Trobe Asia at Australia's La Trobe University, said on Twitter, adding APEC was the "most disposable of the regional summits".

Rather than cooperation, the theme seemed to be conflict and containment as Beijing and Washington directly criticized each other's policies and staked their claims as to why they were the security and investment partner the Pacific should choose.

"It's not even supposed to be binding, it's APEC," said one diplomat involved in negotiations for the communique, surprised that the members couldn't agree on what is usually a humdrum summary of issues discussed.

"China and the U.S. hijacked the APEC spirit, I suppose."

The United States even preferred its own terminology of Indo-Pacific, which it defines as running from "the western shores of Latin America to the furthest reaches of the Indian Ocean", with Pence mentioning APEC five times and Indo-Pacific 41 times in his APEC speech on Saturday.

Speaking in Beijing on Monday, Chinese Foreign Ministry spokesman Geng Shuang said the United States attended APEC in a "blaze of anger", causing disputes and disagreements and damaging the "harmonious atmosphere" of the meeting.

"APEC is a platform to deepen cooperation, not a place to criticize each other. China attended to promote cooperation and seek consensus, not to get into a boxing ring," Geng told reporters.

"NOT A BIG DEAL"

Founded in 1989 with a view to fostering trade and economic ties around the Pacific Ocean, it operated at a ministerial level until 1993 when U.S. President Bill Clinton established the annual leaders meeting. Each meeting had produced a joint statement at its conclusion, until Sunday.

"This is very concerning from a systemic perspective. The WTO faces similar challenges," said Charles Finny, a Wellington-based trade consultant and a former New Zealand government trade negotiator.

In an editorial, Chinese state-run tabloid the Global Times said the absence of a communique was "not a big deal", and placed more significance on an upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping.

The two leaders are expected to meet at the G20 summit, which starts in Argentina next week.

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Papua New Guinea Prime Minister Peter O'Neill speaks as the Asia Pacific Economic Cooperation (APEC) Chief Executive Officer, Chris Hawkins listens during a media conference at the end of the APEC forum in Port Moresby, Papua New Guinea, November 18, 2018. REUTERS/David Gray

"It is hoped Washington makes serious preparations for the summit and not pin its hopes on exerting pressure," said the tabloid, which is known for its nationalistic stance.

Still, there did seem to be some Chinese concern over the communique, with officials rebuffed on Saturday when they tried to meet PNG Foreign Minister Rimbink Pato on the issue.

Pato confirmed to Reuters that Chinese officials had wanted to see him, but said they had not made "necessary arrangements".

As the APEC host it was Papua New Guinea's (PNG) role to produce a communique. But the hostility and conflicting visions on display meant few blamed the group's poorest country for being caught between two feuding superpowers.

"In these times, chairing a gathering such as the leaders that we had over the last few days is no easy task," Australian Prime Minister Scott Morrison said, adding Papua New Guinea Prime Minister Peter O’Neill had shown great integrity and leadership.

BACK ON THE MAP

Indeed, one big change was long-forgotten Pacific nations found themselves aggressively courted by the two big-spending superpowers competing for influence in the strategically important ocean.

Pence said the United States would join Australia to help PNG build a navy base on its Manus Island, which was a U.S. base in World War II, after China had emerged as a possible developer of the deep-water port.

Analysts had said a Chinese presence on Manus could have impacted the West's ability to navigate in the Pacific while offering China a site close to U.S. bases in Guam.

And the United States, Japan, Australia and New Zealand unveiled a $1.7 billion plan to bring electricity and the internet to much of PNG, a collective counter-attack to the lure of Beijing's flagship Belt and Road program.

"Whatever concepts have been raised by the United States or China or Australia doesn't necessarily mean that these are the same concepts for Papua New Guinea," Wera Mori, PNG Commerce and Industry Minister, told Reuters by phone.

"We have our own situations and our own priorities to focus on."

(Additional reporting by Philip Wen and Jonathan Barrett, and Ben Blanchard in Beijing; Writing by John Mair; Editing by Shri Navaratnam)

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