APEC-2015

The representatives of 21 member-economies among which are 19 states and 2 Chinese provinces arrived in Manila, the capital of Philippines. An opinion was pronounced that the event tested security in volatile Philippines, and now it could be stated that Philippines had passed this test. In order to do so the state authorities assembled more than 30,000 military, police and civilian personnel in its largest security operation in years.

The security concerns, exaggerated by the recent tragic events in Paris, overshadowed the focus of the summit. The economic issues that lie at the centre of the APEC negotiations were seemingly pushed into the background as it was fro the G20 summit that took place several days earlier. Nevertheless, the main theme for both meetings was uneven global economic growth that “falls of our expectations”, as was stated in the final version of the G20 communiqué.

The APEC summit puts an end to the year’s cycle of meetings between Economic Leaders and Ministers of APEC member economies that are aimed to determine the future of trade and investment cooperation in the Asia-Pacific region. The summit serves as an opportunity for the members to engage in a discussion and consider the relevant topics. The share of APEC members account for 57% of world GDP, 48% of the turnover of international trade, more than 40% of foreign direct investment and more than 40% of the world population.

The officially stated theme of the 23rd summit is the improvement people’s quality of life in the region and the proposed way to do so is building inclusive economies. Regional economic growth became the central theme to discuss by over 800 delegates, including regional economic leaders, entrepreneurs and businessmen from small and medium enterprises. The declaration of the APEC leaders signed on November 18, 2015 clearly demonstrated the shift of the main focus of the forum towards the problems of domestic economic development and qualitative growth. The theme of globalization that predominated the agenda of APEC during five-year period of geopolitical and economic heavyweights was finally forced out. From 2010 to 2014 APEC was presided over Japan, the United States, Russia, Indonesia and China - the major global players whose ambitions extend far beyond the region. Being the members of the G20, they had the opportunity to link APEC work with global economic agenda. Philippines that presided the forum in 2015 has other interests. As it is one of the developing economies of the region, its impelling needs relate to domestic issues, including the fight against poverty and inequality, lack of food, lack of education, poor internal infrastructure. Thus, the "inclusiveness" and "sustainability" have become the key concepts of the APEC-2015, and most of the discussions concerned the issues of structural reforms, the development small and medium-sized, human capital development and food security, prevention of emergency and natural disasters.

For the first time the issues of sustainable development and the quality of economic growth was raised in APEC in 2010 by the Japanese representatives. It was proposed in the framework of the APEC Growth Strategy to consider some qualitative characteristics of economic growth - balance, inclusiveness, sustainability, innovation, safety. Five years later, in 2015, the member-economies tried to report on their achievements in this sphere, but the task turned out to be rather difficult, as the Japanese initiative did not imply any particular indicators which could be compared. Such indicators, called Key Accountability Areas (KAAs) were proposed as a result of APEC-2015 in a separate annex to the declaration of the leaders. They concern institution building, social cohesion, and environmental impact.

For Russia, such focus on stimulating economic growth and sustainable development is more relevant and interesting than the integration agenda of the APEC. Regarding the latter, for Russia it’s nothing to boast about. APEC partners are not ready yet to consider the Eurasian Economic Union (EAEU) created in 2015 in the context of the Asia-Pacific region. EAEU was even not mentioned in the declaration of the leaders among the integration achievements by the APEC members in 2015. Perhaps, such demonstrative disregard of EAEU is one more manifestation of the growing politicizing of the modern integration agenda. Still, it could be stated with certainty that the turn of APEC towards the socio-economic and humanitarian issues can be very favourable for Russia as it really has much to share in this connection. The Russian answers to the questions of development are often much more humane and heedful of the real needs of developing countries, rather than mercantile western recipes of some APEC members.

The neglect of the issue of regional integration that had been the central one for APEC for the last several years could be explained by the fact that this topic in 2015 acquired strong political overtones inadmissible for APEC. Such situation has emerged primarily due to the confrontation between the two major economic players – the United States and China, and, respectively, between the two integration "mega blocks" – Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP). Trans-Pacific Partnership, the establishment of which was announced shortly before the APEC summit, and which, in fact, was born and emerged on the sidelines of the APEC, had all the chances to become a headliner of the Leadership Week in APEC. Still, the discussion regarding TPP had come to a short meeting of 12 leaders of the TPP beyond the main program of Summit. Though it was mentioned in the declaration as one of the possible options on the way to the creation of the Asia-Pacific free trade zone, its significance was no greater than one of RCEP. Notably, Philippines itself is a part of the negotiations regarding the RCEP.

By the beginning of the Summit, 12 of APEC's 21 members have already completed their negotiations on the comprehensive Trans-Pacific Partnership trade deal in October, 2015. It was the first time for them to meet since the announcement of the deal, and the important fact was the presence of Canada’s new Prime Minister Justin Trudeau. Earlier Trudeau’s government hasn't firmly committed to the trade deal. One of the strongest objections to the deal in Canada has come from the auto sector, that is afraid of the boost of Japanese auto imports much sooner than in the United States. On the deal in Manila Canadian government has taken officially neutral position, however it has also dropped hints that it will ultimately sign on to the deal. Thus, Chrystia Freeland, the new trade minister said to reporters that "the Liberal Party supports free trade," adding that her government is "absolutely committed to a consultation process with Canadians, with stakeholders, and a parliamentary debate on this issue."

One more reason for the clashing US and Chines interests are the regional tensions over the South China Sea. Beijing, which claims almost the entire energy-rich South China Sea has stepped up land reclamation and construction in disputed islands and reefs there. In return, U.S. B-52 strategic bombers flew near Chinese artificial islands, signaling Washington's determination to challenge Beijing over the disputed sea. Although China had been hoping that the territorial dispute would not surface at the APEC meeting, its hopes of a summit free from geopolitics were dashed when Mr. Obama directly addressed the disputed Chinese claims to islands in the critical waterway. He urged the Chinese to stop military activities there.

Meanwhile, Chinese President Xi Jinping has studiously avoided bringing up the dispute at the talks in Manila. He paid more attention to the issue of integration, urging relative parties to speed up the construction of the Free Trade Area of the Asia-Pacific (FTAAP) and stressing the fact that new regional free trade deals has given rise to worries about fragmentation. It is worth noting that Russian Prime Minister Dmitry Medvedev echoed Xi’s remarks pointing that trade agreements within the APEC region should not substitute the multilateral trade system and already existed economic ties.

Despite the officially neutral position of Mr. Jinping at APEC summit regarding the issue of South China Sea, officials in Beijing reacted with anger to Mr. Obama’s efforts to bolster US allies, claiming that China’s construction work in the contested areas was “lawful, justified and reasonable.” Moreover, the tension of interests between the US and China has provoked the massive protests in Manila: hundreds of demonstrators flooded to the streets of the city, protesting against the appearance of US President Barack Obama and denouncing what they called an interventionist foreign policy by the US. Later the protesters were pushed back by the police.

The US interests on the Summit were also reflected in the formulation of the framework plan for cooperation in the field of services (APEC Services Cooperation Framework). This project has started in winter 2015 with a discussion of the importance of the services sector at the national level, and by the end of the year the debate was extended to the area of international trade liberalization in services. It is worth mentioning that it was one of the most difficult and controversial topics in the framework of the WTO. While the first part of the discussion regarding the development of the services sector at the national level was certainly interesting and important for the Philippines, the trade and the liberalization component came under the influence of the United States.

Although socio-economic issues have forced out the topic of regional integration, the US still grabbed the opportunity to push forward its geopolitical interests, including the creation of TPP, suppression of the Chinese influence in the South China Sea and promoting trade liberalization in the area of services.

Regarding the general features of APEC-2015 more attention to analytical work should be mentioned. Some experts say that APEC is gradually becoming a kind of Asian OECD, becoming not just an incubator of the integration process, but also a catalyst for the systematization of domestic regulation and the center of promotion of the policy aimed at economic growth and social well-being of people throughout the region. Considering the fact that the Philippines initiated the era of developing economies in the chairmanship of APEC (in the coming years the chairmen will be Peru, Vietnam, Papua New Guinea, Chile, Malaysia, New Zealand and Thailand) it can be assumed that focus on domestic development and reforms will be preserved and strengthened. And this is an opportunity for Russia to promote its interests in the Asia-Pacific region since it has something to offer and share in this sphere.