Consequences of the APEC Conference
Mocked as the global leaders’ annual fashion showdown, the Asian-Pacific Economic Cooperation (APEC) summit usually does not produce anything headline-worthy except for a few comical photos of Obama, Putin, Duterte and the likes during the “silly dress” tradition, trying to look comfortable in whatever garb the host country had prepared for them to wear. In last year’s conference, hosted by Lima, Peru, they stood in line flashing mustard-colored alpaca shawls.
The 2017 conference however, with the participation of fresh faces like the newly-elected US President Donald Trump, Hong Kong Chief Executive Carrie Lam and thirty-seven-year-old New Zealand Prime Minister Jacinda Ahern, attracted more attention than usual, if only for the high potential of meme-worthy Trump moments. It was the first time this US president met Rodrigo Duterte, whom Trump held in highest regard for his “unbelievable job on the drug problem,” achieved through tactics such as “riding in tandem” - vigilantes on motorcycles shooting at everyone in sight.
Their first encounter went smoothly enough, as did Trump’s sideline diplomatic exchanges with Vladimir Putin on the issue of alleged Russian meddling in the previous US election and Russia’s involvement in Syria. Yet the most notable, and also most ironic moments of the summit, came when Trump made his public address to the audience on the subject of multilateral agreements and trade deals.
At one of the world’s largest forums on free-trade, in front of an audience which included the top 21 Pacific Rim economies, the President of the US lambasted previous trade partners for their "chronic trade abuses," making specific jabs at countries that committed “theft of intellectual property” to cheat on America. He pointedly criticized many major multilateral deals, and insisted that bilateral relations was a better choice for all countries, especially those wanting to trade with the US.
Immediately following him, President Xi Jinping, representing the PRC, delivered an impressive speech that emphasized the exact opposite values - “We should support the multilateral trading regime,” he said, to “allow developing members to benefit more from international trade and investment." This, coming from a country that only four decades ago was virtually inaccessible to foreign corporations, except maybe, those controlled by Soviet Russia. Ever since the reversal of Maoist economic policies however, the leadership of China’s PRC has pushed for development through vehement trade with regional economies, and eventually, the West, so that by 1985 it has set itself up as a world economy friendly to investors from all over the globe.
Beijing has abolished most of its non-tariff barriers, such as import quotas and licensing requirements; statutory tariff itself has been reduced from 45 percent in the mid-1980s to 10 percent in 2001 in order to become a member of the WTO, the very same organization that Trump denounced. Accession to this organization, after a six-year period of vehement negotiation, greatly boosted China’s economy, by opening the world market to its exports. For the last eight years, China has been the world’s largest exporter of goods; Chinese Lenovo smartphones and tablets find themselves in the hands of youths across East and Southeast Asia, while Chinese washing machines and dishwashers flood the market of Europe. The state’s GDP has been increasing at a steady rate of 10 percent per year. Its foreign direct investment stands at roughly $100 billion, while Chinese outbound investment reached $67.8 billion in 2010. All of this is frequently attributed, both by the government and the general public, to WTO membership.
It is true that not all of China’s recent economic advances have been the results of fair competition; in fact, most of the time, Chinese corporations wholy skip the initial R&D phase necessary before the release of a new product elsewhere. Instead, they engage in government-approved intellectual theft, by counterfeiting American fashion designs, pirating movies and video games, and stealing softwares, alongside other technologies. President Trump’s accusations of China’s intellectual right infringements, either direct or otherwise, are not unfounded; U.S Trade Representative Robert Lighthizer’s formal initiation, in April, of the investigation into whether China is unfairly getting hold of American technology and intellectual property or not, was almost overdue. Every year America loses $600 billion to intellectual theft, and China accounts for most of that loss.
Nevertheless, being petty about its “unfair treatment” at the hands of other trade partners in a major conference on trade is not going to get the US anywhere, or gain back on its losses to China. The irony here is quite delightful. President Trump, representative of a country traditionally seen as the pioneer in trade negotiations, is offering a bleak view on the future of multilateral collaboration, driving off potential partners, while China, the strictly Communist state, is winning over small countries thanks to its seeming willingness to trade. Will the trend seen at APEC gradually lead to China being the new economic leader worldwide? Only time will tell.