This Friday (Saturday, Moscow time) the summit of the 21 leading Pacific economies will cap the week-long marathon that is the annual APEC forum, held this year in Honolulu, Hawaii. In 2012, Russia will host the year-end summit for the first time, in Vladivostok. The host country must not only build all the necessary facilities for the event. It also plays a leading role in shaping APEC’s focus for the year, as the forum in Honolulu has shown.
Policy based on economic patchwork
APEC is usually in the news only once a year – when it holds its year-end forum like the one in Honolulu, which is attended by business executives, ministers and experts. They hold meetings and share all kinds of materials. The forum is crowned with meetings of heads of state and government. The forum gathers representatives of 21 economies – virtually all the countries and territories along the perimeter of the Pacific. This festival-like atmosphere naturally attracts media attention.
However, APEC does serious work between these forums, at dozens of working meetings and commissions. It may be not as evident, though. The same can be said for the work of the European Commission.
For example, at the 2005 forum APEC decided to reduce regional trade costs by a mere 5%. Achieving this goal required many small coordinated steps that didn’t attract much public attention. Not all APEC members had to follow suit. Participation is voluntary. Some members embark on the initial steps while others take a wait-and-see approach.
It was announced in Honolulu that this goal has been achieved. APEC has lowered regional trade costs by 5%, and not by reducing customs or other payments, but merely by spending less time on shipping and handling goods.
To sum up, 21 very different economies have quietly created a common economic mechanism by using methods contrary to those of the EU – the Europeans favor universal and stringent regulations.
Moreover, this economic patchwork is turning into real policy, especially this year with the United States at the wheel. As APEC chair this year, the Americans held all of the numerous meetings throughout the year. They took their leadership position quite seriously, starting each session in the Brezhnev manner: “As President Barack Obama said about Pacific cooperation…”
Speaking about Obama, he has called himself the “Pacific president”, and he was being serious. U.S. Secretary of State Hillary Clinton recently wrote an article in Foreign Policy about the Pacific cooperation.
It follows from these statements that the United States will probably leave the Greater Middle East, including Afghanistan, but not the Pacific. Remember that Asia accounts for two-thirds of world trade, and two-thirds of all cargo passes through the South China Sea. This is only one of many reasons for this policy.
Green light for Beijing
Since its inception, APEC has seesawed between two approaches. The United States and its allies have pushed for complete freedom of trade, but the majority of APEC members favor other forms of integration that help boost the weaker economies. Strange as it may seem, both approaches worked, much like a pendulum.
Obviously, the United States used its time as APEC chair to promote free trade, if only to meet Obama’s calls to double U.S. exports by 2015, and Europe is not the market to help the U.S. achieve this target. The U.S. already exports $320 billion worth of goods per year to Asia, contributing 850,000 jobs to the country.
However, the markets are not that elastic. It was obvious throughout the year that the U.S. was using its position as chair to put pressure on China. How did it do this?
The chair country has the right to choose three slogans for the year, and not just for itself but for all APEC members. The U.S. chose “promoting green growth” as one of the slogans.
Here’s a rare case of PR for the bureaucratic APEC. Two Filipinos and one Chinese won a regional photo contest featuring green themes. These are beautiful pictures.
However, for all that, the APEC machine under the U.S. leadership produced for discussion a host of initiatives, the implementation of which would have ousted numerous Chinese (and other) commodities because they would not qualify for green lists. Some of these ideas were accepted.
At the same time, the U.S. promoted its initiative to create a free trade zone in the Pacific. It was trying to bring such APEC members as Singapore and South Korea, to name a few, into this zone. However, Japan did not make it there. Is this meant to be a parallel, American APEC?
Russian delegates to APEC note that as a result of these games China has cooled to APEC in general, all the more so since it has its own, more comfortable integration mechanisms in the region – with the ASEAN countries, Japan and South Korea… It is hard to say what the future will bring.
Three summits in a row
Speaking about the role of Russian leaders in resolving the current issues of the global economy, we have witnessed eastward movement in the last two weeks of global politics – the G20 summit in Cannes, the SCO economic summit at prime minister level in St. Petersburg and the current forum in Honolulu.
They have at least one feature in common – Russia and China took part in all of them and discussed similar issues, including money, the economy and development. However, this discussion was held from different angles and the effect was interesting.
In Cannes, Russia, China and all other developing economies were asked to contribute money to rescue the developed countries of the EU and the rest of the world but not told what they would get in return.
It became clear in St. Petersburg that Russia and China are ready to step up the SCO’s economic activities in Central Asia. They are prepared to invest in the region and create the necessary infrastructure – including funding – because the political environment is favorable there.
However, it turned out in Honolulu that the world’s main rescuer, China, is also a subject of heavy pressure. If China is treated like this, it’s time for Russia to draw some conclusions.
Where should Russia direct the APEC ship starting next week? What slogans should it choose for dozens of annual meetings? Clearly, it won’t promote free trade or the American dream of cutting China, the main U.S. rival, down to size.
Until recently, the idea was to make modernization the main slogan of the Russian chair, or to be more specific, cooperation of Pacific countries in modernizing the economies that are in need of it.
This is a winning approach. It has nothing to do with confrontation (and even complements the theme of the U.S. chairmanship). However, this approach is still very different from the one that was recently in evidence in Honolulu.
The views expressed in this article are the author’s and may not necessarily represent those of RIA Novosti.
