APEC Summit Aims to Strengthen US-China Relations and Foster Economic Cooperation
The upcoming Asia-Pacific Economic Cooperation (APEC) forum, set to take place in San Francisco, holds significant importance for US-China relations and economic cooperation. While APEC does not typically yield enforceable commitments, it serves as a crucial platform for diplomatic efforts, including an anticipated summit between President Joe Biden and Chinese President Xi Jinping, as well as the advancement of agreements under the Indo-Pacific Economic Framework.
The history of APEC dates back 30 years to President Bill Clinton’s summit on Blake Island, Washington. Since then, APEC has expanded to encompass 21 economies, accounting for almost half of world trade and over 60% of global GDP. The United States’ exports to APEC economies support 7 million jobs, demonstrating the substantial impact of this multilateral platform. In its early years, APEC played a crucial role in driving momentum towards the establishment of the World Trade Organization. More recently, the 2011 APEC summit in Honolulu, overseen by President Barack Obama, achieved notable targets in reducing barriers to environmental trade, enhancing regulatory practices, and making progress in negotiating the Trans-Pacific Partnership.
This year, the APEC leaders’ summit aims to foster an interconnected, innovative, and inclusive Asia-Pacific region that ensures a resilient and sustainable future for all. While modest agreements are expected in areas such as the energy transition, food security, anticorruption, trade facilitation, and environmental goods, achieving a meaningful Leaders’ Statement might prove challenging due to conflicts in the Taiwan Strait and the South China Sea, as well as divisions regarding climate change.
The focus at this year’s APEC will largely center on the anticipated bilateral meeting between President Biden and President Xi. This meeting is viewed as an opportunity to recalibrate the US-China relationship following recent tensions and to restore some stability. Cooperation between the two nations is essential in addressing an array of critical issues such as climate change, nonproliferation, artificial intelligence, fentanyl, trade disputes, and military communication. Although divergent views remain on the future nature of the bilateral relationship and what a new equilibrium might entail, the meeting itself carries significance as a valuable venue for leader-level engagement. Additionally, with upcoming presidential elections in Taiwan and the United States next year, stabilizing the relationship is of utmost importance.
Coinciding with the APEC summit, the Indo-Pacific Economic Framework (IPEF) will hold its seventh negotiating round in San Francisco. IPEF represents President Biden’s flagship project for increasing US economic leadership in the region. While skeptics have criticized IPEF for its lack of tariff concessions, which may impede securing meaningful concessions from partner countries, progress on IPEF’s supply chain pillar is expected. The United States, along with 11 APEC economies, Singapore, and Fiji, anticipates finalizing an agreement that establishes mechanisms to enhance supply chain resilience, coordination during disruptions, and promote workers’ rights among suppliers. Administration officials also hope to reach understandings on the green transition, tax policies, and anti-corruption measures. Despite the reservations about the absence of tariff reductions, IPEF’s value lies in its strategic significance. The framework presents an opportunity for US economic engagement in the region and acts as a counterweight to China’s economic influence through initiatives like the Belt and Road Initiative and the Regional Comprehensive Economic Partnership.
Today, it is increasingly evident that governments alone cannot address global challenges, whether they be pandemics, energy transitions, or emerging technologies. Therefore, the private sector plays a crucial role in innovation, investment, and scaling of solutions. APEC has emerged as a leader in fostering collaboration between the public and private sectors through initiatives like its Business Advisory Council and the CEO Summit. Additionally, APEC’s inclusive approach involves civil society stakeholders, thereby establishing cooperative habits and ensuring stakeholder buy-in.
The 2021 APEC summit holds promise for advancing important policy initiatives, promoting public-private collaboration, stabilizing crucial bilateral relationships, and reaffirming the United States’ commitment to leadership in the region. Despite external conflicts and potential domestic challenges, this gathering serves as a testament to ongoing efforts in driving global progress and prosperity.
