The meeting of Asia-Pacific leaders at Istana, Singapore on 14th and 15th of November 2009 called for a ‘balanced, inclusive, and sustainable growth.’ Under the theme of ‘sustaining growth, connecting the region,’ the 21-member body including the powerful economies of the world vowed at the APEC Economic Leaders’ Meeting (AELM) to coordinate policies towards ushering in a free trade regime, which will operate in a climate without restrictions. However, the meeting that took place in the midst of global recession appeared to have ended up in high scale rhetoric without much substance. But the summit in its utterances and proceeding brought into focus certain new developments that are likely to shape global economy in coming years.
Broadly speaking, the summit brought into focus two broader but incipient developments of the emerging global economy. The first is global in character and more pertains to economy, while the second dimension pertains to the domain of regional politics in the Asia-Pacific. At least from a symbolic point of view, the summit called for an inclusive, balanced and sustainable growth of the global economy. The recession has unveiled the fractured nature of global economy, subordinated by protectionism and other trade barriers. As a result when the economy stumbled in the US, the effect was felt throughout the globe. Interestingly while the West particularly the US suffered heavily due to the recession, the east Asian countries like China registered high economic growth in these periods. But, the point is that due to the skewed global financial system with unbalanced tariff measures, protectionism, trade restrictions, the global economic rules and practices have become unfair. The APEC leaders in a statement emphasized on a ‘strategy that supports more balanced growth within and across economies, achieves greater inclusiveness in our societies and sustains our environment.’ Hence, the call for an inclusive global financial system makes sense especially in the height of global recession.
Protectionism is another issue raised by the participants in the summit. Chinese President Hu Jintao pointed out how the protectionist measures by the developed countries like the US needs to be revoked, to allow the operation of free market economy as per the rules of the market. The US recently imposed tariffs on Chinese goods like glossy papers, phosphates, steel pipes and tires. Currently there is no global regime that oversees the free run of the market economy in the world, which as a result restricts development of developing economies. The Singapore Prime Minister Lee Hsien Loong, who chaired the summit, called for the need to open markets and lower tariffs and restrictions to allow fair competition in Asia. The members also agreed on the need for structural reforms for operation of free market economy. Hence, the APEC voice on curbing the protectionist measures is a welcome move in the direction of balanced global economic growth.
One of the most pressing global issues of the climate change was, however, relegated to the backburner in the summit. Though an earlier draft emphasized that the summit will take up the issue of climate change towards evolving a common agreement, it could not take place. The participants failed to give any commitment to reduce emission of green house gases to a particular target. The supposed common agreement on climate change was left halfway to be further deliberated at Copenhagen summit on climate change. It is doubtful whether Copenhagen summit will help evolve a consensus on the issue.
Besides these broader issues the summit meeting needs to be analyzed in view of some prominent trends in the region. China is going to be the most important player in the region. In the current trend of development, China is going to replace Japan to be the second largest economy in the world. And also due to its military might, geographical proximity, bilateral trade in surge with other countries, China will likely be in an advantageous position in comparison to the US in the region. Some of the attempts by the US to salvage its downward economy came starkly into the picture during the recent ASEAN+US summit. The US President Barack Obama’s call to ASEAN countries to export US goods in order to create jobs in the US, his appeal to join the Trans- Pacific Strategic Economic Partnership Agreement (TPP, currently comprise Singapore, New Zealand, Brunei and Chile), and to China to strengthen its yuan with dollar, indicate the attempt of the US to boost its badly hit economy. Reportedly, China has kept yuan at about 6.83 per dollar since July 2008. The US has argued an undervalued yuan contributes to imbalances in bilateral trade. Interestingly due to China’s opposition the monetary issue was not deliberated upon in the Asia-Pacific summit. In an attempt to maintain cordial economic relations, Obama visited China on 16 November 2009 reportedly to assuage Chinese apprehensions about the US restrictions on trade and to boost bilateral economic relations.
The recent Obama tour of east Asia is an indication of the US attempts to reverse the diminishing clout of the US in the region. The south east Asian nations are implementing the free trade area agreement in January 2010, which may likely expand to ASEAN+3 (China, Japan and South Korea) in near future. Similarly, as some analysts observe, it may further lead to free trade between ASEAN+6 (besides +3, India, Australia and New Zealand), which may further dent the US influence in the region. China’s trade with the ASEAN has grown almost 20-fold since 1993, with its share of total ASEAN commerce rising to 10.5 per cent from 2 per cent.
The latest summit meeting of APEC, which currently accounts for about 55 per cent of global output and 40 per cent of the world’s population, in itself did not pronounce something substantial but the overall scenario in which it took place is indicative of the new paradigm emerging in the scene of Asia-Pacific with global ramifications.
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