The APEC Summit: An Opportunity and a Challenge for Asian Leaders

November 16, 2018

Editor’s Note: A version of this article was originally published by The Interpreter, which is published by the Lowy Institute, an independent, nonpartisan think tank based in Sydney. War on the Rocks is proud to be publishing select articles from The Interpreter.

The Asia-Pacific Economic Conference (APEC) Summit is being held at a time of enormous global and regional geopolitical uncertainty. It is a tumultuous time for the region, and APEC 2018 provides a real opportunity for leaders to agree on the kinds of reforms that could make a positive difference. Will the host, Papua New Guinea, be able to steer the summit to achieve its stated goals?

On Saturday, leaders from 21 APEC member countries will meet in Port Moresby, following this week’s business leaders’ forum and a year of preparatory meetings. According to its website, APEC’s overall goal is “to create greater prosperity for the people of the region by promoting balanced, inclusive, sustainable, innovative, and secure growth by accelerating regional economic integration.” It aims to do so by, inter alia, liberalizing and facilitating trade and investment at the border, across the border, and behind the border; reducing the costs of cross-border trade to assist businesses; and simplifying regulatory and administrative processes.

APEC decisions are reached by consensus and commitments are made on a voluntary basis. Yet tensions between the United States and China are making it increasingly difficult for Asia-Pacific countries to maintain what has always been a delicate diplomatic balancing act – especially for those concerned about or with competing claims in the South China Sea. Several countries such as Sri Lanka, Indonesia, and Malaysia have been reconsidering existing infrastructure deals with China. President Rodrigo Duterte in the Philippines uses language emphasizing his meek and humble attitude towards China, and working on cooperation in the South China Sea. At the same time, he maintains robust security cooperation with the United States.

The dynamics between the United States and China are also affecting how countries in the region interact with each other, and how they view regional and global institutions. The apparent thaw in relations between China and Japan is a good example. Fears over deepening global trade tensions are further encouraging some countries, such as South Korea, Thailand, and Indonesia, to actively consider joining the revamped Trans-Pacific Partnership. Concern over how to mitigate the fallout of the trade war has galvanized increased interest in the China-backed Regional Comprehensive Economic Partnership. The rising U.S. dollar, which has affected economies like Indonesia, and the existential crisis of adapting to and mitigating climate change also loom menacingly on the horizon for many Asia-Pacific countries.

In addition to global and regional instability, like much of the rest of the world, countries in the Asia-Pacific are also facing profound domestic challenges, many of which are related to the regional or global trends that are outside of their control. And, like the rest of the world, leaders in these countries are balancing political and economic demands as they make their policy decisions. For example, as the Australian National University’s Stephen Howes points out, in Papua New Guinea, the “Taskforce Sweep” campaign has been abolished, economic growth has stalled, one in two children under the age of five are stunted from malnutrition, and eradicable diseases like polio that were virtually wiped out are now returning.

In this tense geopolitical environment, how will the host country lead participants to negotiate the kinds of policies that can lead to positive outcomes? Papua New Guinea will need to steer participants towards a focus on broader and longer-term agendas for the region as a whole.

There are also significant politics around how the agenda and discussions at the summit will be steered. As is well known, U.S. President Donald Trump and Russian President Vladimir Putin are not attending – reportedly to the great disappointment of the host country. China’s President Xi Jinping, however, is arriving a day early, clearly demonstrating China’s interest in the region. Australia, too, is, of course, trying to ensure its voice is heard.

This year’s APEC provides a real opportunity for Asia-Pacific leaders to grapple with issues that are affecting countries all around the world. The Papua New Guinea Summit could be where regional leaders get together to craft solutions designed to promote sustainable and equitable growth and development according to the specific circumstances of the Asia-Pacific. Ideally, Pacific island countries will work together to ensure their collective and individual interests are best represented.

There are some fairly uncontroversial economic policy reforms that many accept will – if implemented properly – be able to make a real and positive impact. But as this summit shows, it is the tumultuous swirl of geopolitics that surrounds the economics that will really determine the region’s future. The host nation Papua New Guinea has its work cut out for it in the days ahead.


Dr. Merriden Varrall is a Nonresident Fellow at the Lowy Institute. She is Director of Geopolitics and Tax at KPMG. From 2014- 2018, Merriden was the Director of the Lowy Institute’s East Asia Program. Before joining the Institute, Merriden was the Assistant Country Director and Senior Policy Advisor at United Nations Development Programme, China, where she worked on China’s role in the world, focusing on its international development cooperation policy. Prior to that she worked for the Australian Government Treasury and the Department of Family and Community Services. Merriden spent almost eight years living and working in China, including lecturing in foreign policy at the China Foreign Affairs University and conducting fieldwork for her doctoral research. Merriden has a PhD examining Chinese foreign policy from Macquarie University, Sydney, and the Vrije Universiteit, Amsterdam.