Xi Takes Center Stage at APEC as Trump Skips Summit

Key Concepts

• APEC (Asia-Pacific Economic Cooperation): A 21-member community of nations and economies focused on discussions and potential trade deals in the Asia-Pacific region. It is a non-binding forum.
• Multilateralism: Cooperation among multiple countries on international issues.
• Open Trade: Policies that promote free and unrestricted trade between countries.
• America First Policy: A policy of the Trump administration prioritizing American interests in trade and foreign policy.
• Bilateral Deals: Trade agreements between two countries.
• Diversification: The strategy of expanding trade and investment relationships beyond a single dominant partner.
• Predictability and Certainty: Key factors for international businesses, referring to stable and understandable trade rules and regulations.

China's Leadership at APEC and Regional Priorities

President Xi Jinping presented a five-point proposal at APEC emphasizing multilateralism and open trade. This initiative is seen as significant for the region, particularly in the context of the US "America First" policy. China, being the largest economy in the APEC region, senses an opportunity to lead and promote free trade. President Xi's visit to South Korea, his first in 11 years, and his holding of multiple bilateral meetings underscore China's active diplomacy and its regional priorities. This active engagement signals China's intent to fill a leadership vacuum and create new trade deals with member countries, potentially outcompeting the US.

Investment Opportunities in the Asia-Pacific

With the US pursuing an "America First" policy, other countries are actively seeking alternative investment and trade opportunities. Asian countries, through APEC, are looking to create trade deals and foster cooperation. There is a perceived desire among some to pivot away from the US, at least in the short term, to find deals with lower tariffs and fewer restrictions.

Shifting Global Trade Landscape

The global trade environment is evolving, moving away from a period of ever-expanding free trade. Prime Minister Carney's remarks highlight this shift, indicating a need for adaptation. Economies like Canada are making moves to diversify their export markets and work outside the US, committing to doubling non-US exports over the next 10 years. This suggests a long-term strategy to mitigate risks associated with over-reliance on a single market.

Trump's Absence at APEC and its Impact

President Trump's decision to skip APEC, immediately after the Trump-Xi summit, created a significant space for other leaders, particularly President Xi, to shape the regional agenda. This absence allowed China to position itself as a leader within the organization. For international businesses, the lack of US engagement at APEC creates uncertainty. Business owners generally seek predictability and certainty in trade rules to plan effectively and succeed.

Bridging Divides within APEC

APEC comprises 21 member countries with diverse interests and strategic concerns, leading to differing views on trade, with some favoring multilateral deals and others preferring bilateral agreements. Dialogue is considered crucial to bridge these divides. The recent meeting between the US and China is seen as a positive development, potentially motivating other countries to explore opportunities and reduce regional volatility. However, the situation remains dynamic and subject to change.

Key Arguments and Perspectives

• China's Opportunity to Lead: The US absence at APEC provides China with a prime opportunity to assert leadership in promoting free trade and creating regional deals.
• Business Need for Predictability: International businesses thrive on predictable and certain trade rules, which facilitate planning and investment.
• Diversification as a Strategy: In a changing global trade landscape, countries are increasingly looking to diversify their trade partners and reduce reliance on any single economy.
• Dialogue is Essential: Despite differing views on trade, dialogue among APEC members is vital for fostering cooperation and finding common ground.

Notable Quotes

• "Make trade, not war. make money, not war." - A Shanghai law firm partner, highlighting the business community's preference for peaceful economic engagement.
• "We're not uh we're not in a world of ever expanding free trade. We have to change." - Remarks attributed to Prime Minister Carney, indicating a shift in the global trade paradigm.

Conclusion

The APEC summit, in the context of the Trump-Xi meeting and the US "America First" policy, highlighted China's growing influence and its proactive approach to shaping regional trade dynamics. President Xi's emphasis on multilateralism and open trade, coupled with his active diplomacy, signals China's ambition to lead. While the US absence created a vacuum, it also presented an opportunity for other nations to pursue diversified trade strategies and seek greater predictability in a shifting global economic landscape. The success of APEC in bridging diverse member interests and fostering concrete trade deals remains to be seen, but the current environment underscores the importance of dialogue and adaptation in international trade.