Apec leaders committed to free trade despite hurdles

Country leaders taking their seats to participate in the Apec Summit retreat session on regional economic integration on Nov 19, 2015.
Country leaders taking their seats to participate in the Apec Summit retreat session on regional economic integration on Nov 19, 2015.PHOTO: REUTERS

Summit took broader approach to deal with 'ever-changing' global economy: Aquino

Leaders of 21 Asia-Pacific nations yesterday ended a two-day trade meeting here by reaffirming their determination to bring down trade barriers across the region.

But they acknowledged when speaking to the media that painful measures will have to be taken to achieve it.

In a sign of the times, Philippine President Benigno Aquino, the host of the Asia-Pacific Economic Cooperation (Apec) Summit, told the media the meeting took a broader approach to "address the challenges presented by the ever-changing global economic milieu", instead of holding technical meetings on trade. He also said he was proud to have laid the foundations for Apec to "chart a course to improve trade and strengthen quality growth".

The recent terrorist attacks in Paris and Beirut and on a Russian plane over the Sinai were also strongly condemned by the leaders, who called for regional cooperation to counter terrorism.

They are also committed to achieving an agreement on climate change at next month's Paris climate conference, and pushed for the early completion of negotiations for the Regional Comprehensive Economic Partnership (RCEP) free trade agreement.

Apec accounts for nearly half of the world's trade and is trying to move towards a free trade zone.

Chinese President Xi Jinping, speaking at a CEO Summit before the leaders met, urged fellow leaders to pursue the Beijing-backed RCEP and work towards the wider Free Trade Area of the Asia-Pacific (FTAAP).

The two trade pacts are seen by some as a rival to the Trans-Pacific Partnership (TPP), which includes the United States and Japan.

Mr Xi had warned that the different trade deals would lead to fragmentation among nations.

Acknowledging this at a press conference with the Singapore media, Prime Minister Lee Hsien Loong said: "When you have partial solutions, there is always this risk that... it is so complicated you do not know which one you come under and whether you qualify or not."

But comprehensive trade deals are hard to achieve in reality, he added, and reckoned that plurilateral trade agreements such as the TPP and RCEP, involving smaller groupings of countries or sectors, are the building blocks to deals like the FTAAP.

"We have in mind where we want to go as an ultimate goal and we try not to make it more complicated than it needs to be. I think we have to accept that it is a second-best solution," he added.

Leaders of the 12 countries in the TPP, including Singapore, met on the sidelines of the Apec Summit on Wednesday. Mr Lee viewed it as the "main achievement" of his trip.

"There was a little bit of celebration, and also to commit ourselves to completing the process to sign and to ratify as soon as we can."

Growing protectionism and economic nationalism could make it hard for countries to fulfil the true spirit of such trade deals but it was a reality leaders have to deal with.

"It's a minus, but it's a political reality in a fair number of countries," Mr Lee said. "We hope the mood will pass, and the leaders will have the conviction to explain to their people why the agreements are beneficial for them."

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A version of this article appeared in the print edition of The Straits Times on November 20, 2015, with the headline 'Apec leaders committed to free trade despite hurdles'. Print Edition | Subscribe