APEC in Beijing – let a thousand flowers bloom

When the 21 Leaders of the Asia Pacific region and the thousands of Ministers, officials and business leaders descend on Beijing in early November, they will arrive in a country very conscious of its economic muscle and confident in its ability to assert itself as an economic superpower. The (still relatively) new leadership of China under President Xi Jinping will look to APEC to demonstrate its leadership credentials and to translate into the regional sphere a number of key concerns from its own economic reform programme – business growth, urbanization, innovation, infrastructure, sustainable development. In doing so China will also seek to show it is no laggard when it comes to big ideas for trade and investment – while not (yet) a member of the Trans Pacific Partnership (TPP) China is pushing strongly for more rapid progress on the Free Trade Area of the Asia Pacific (FTAAP) and in ways which are likely to discomfort even the free-trade loving Americans. FTAAP is an idea that has been around for 10 years or more. First mooted by the APEC Business Advisory Council (ABAC), and formally adopted as a broad vision by APEC in 2006 very little has been achieved since, despite numerous reports and discussions. In 2010 APEC decided that FTAAP would be achieved through various negotiating “pathways” of which TPP is one and the most advanced, with the 16 member, ASEAN centered Regional Comprehensive Economic Partnership (RCEP) being another. But how to ensure TPP + RCEP = FTAAP? The Chinese want a deadline, a feasibility study and a work programme. The United States see this merely as muddying in the waters for TPP especially back home with a Congress that, pending the outcome of the mid-term election on 2 November, is decidedly ambivalent about trade. For its part New Zealand is cautious about deadlines but keen to maintain momentum for freer trade within APEC as a whole. Behind all this is a growing concern that TPP might not be able to be achieved, at least as the high quality, ambitious and comprehensive agreement it was set up to be. TPP negotiators and Ministers are meeting in Australia in advance of APEC to nut out a possible deliverable for their Leaders when they meet in Beijing. In their advocacy of FTAAP the Chinese are effectively raising the stakes and reminding all parties that there is a bigger picture which needs to be worked on. The 23 New Zealand business leaders attending the APEC event might well say “let a thousand flowers bloom” – with a foot in TPP and RCEP and a strong relationship with China and our trade-thumping FTA New Zealand is well placed to benefit from whatever emerges in Beijing. This post was written by Stephen Jacobi who will attend the meeting of APEC Business Advisory Council (ABAC) and APEC CEO Summit in Beijing 5-10 November 2014.