By Rebecca Sta Maria
There are increasing concerns that the systems and order that make contemporary life possible marked by connection, convenience and abundance are coming apart.
According to observers, multilateralism, trade, and the rules-based order are in trouble, and that will undermine our ability to face the challenges looming ahead, principal among them the dangerous effects of changing climate. It is also commonly assumed that the main culprit is geopolitical tension between two of the world’s biggest economies, China and the United States. I agree with the first statement. This is the time for us to work together we must do better.
Additionally, I would say the fate of the world order does not rely on the US and China alone. Sure, both play a major part in that if one, or both, sneezes, we all get sick. Nonetheless, it takes the whole community for us to recover.
Take the case of COVID-19, which came at a time when relationships were at a nadir, hampering initial cooperation when the virus broke into a pandemic. Because it affected many, it took many, working together, to put it to heel. An example of this is how the challenge was met by the Asia-Pacific Economic Cooperation, or APEC forum a group of 21 diverse economies that includes China and the US.
At the onset of the pandemic, many APEC officials expressed concern that protectionism and vaccine nationalism would prevail. But despite that apprehension member economies came together, meeting virtually, to pledge, among other things, support for facilitating the movement of vaccines across borders and low tariffs for essential medical goods.
They were quick to react to unclog and ensure the continued flow of essential goods. A special APEC leaders’ meeting was called in July 2021 to reinforce the urgency of collaboration. Customs guidelines were set laying out operational and practical measures to ensure supply chains were equipped to speedily carry vaccines and related goods. We worked with the business community, companies on both sides of the Pacific, who likewise committed to helping in the facilitation of the flow of goods and services, especially those that most support health and economic response at this critical time.
The virus is not yet gone, but already we are seeing the relationships among economies, which made connectivity possible slowly falter, again over geopolitical tensions, specifically those surrounding the war in Ukraine.
There’s enough documentary evidence to account for the continuing impact of the pandemic, as well as of the war and other factors, on the economy. Among APEC member economies, economic growth is expected to slow down to 2.5 percent in 2022, following a 5.9 percent expansion in 2021, and will improve slightly in 2023 to 2.6 percent, according to recent economic data published by the APEC policy support unit.
Varying views among members must be respected. The issues in contention involve vital questions that must be addressed by the international community if we are to remain together. This typically involves confronting grim realities and challenging the status quo. Continuous disagreement puts a strain on solving vital priorities that benefit those on both sides of the argument, such as work in managing the impact of the pandemic and in working collaboratively towards recovery.
More importantly, it can render useless all the lessons of the past two years, which we will need to put into practice if we do not want a repeat of a similar crisis or worse.
The pandemic has driven home the point that we cannot work in silos. The pandemic is not just a health issue but an economic one as well. We must weave the expertise of the health sector with trade and customs, with business and civil society, among all governments and economies.
We require predictability in our rules and flexibility to facilitate the flow of essential goods and people. We need enhanced regional and global collaboration in research, manufacturing, and distribution. We must be more innovative, not just in developing new products and services, but in flexibility, adaptability, and change and for that we need to foster the free flow of dialogue and ideas. This involves reviewing our policies, our guidelines, regulatory innovation, distilling best practices and sharing them more widely.
Developments in the region encouraged by bodies such as APEC, as well as progress in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Regional Comprehensive Economic Partnership Agreement (RCEP), inspire “guanxi” (a Chinese concept to explain connections and relations) and contribute to our collective resilience.
Taking the RCEP for example, it’s the first Free Trade Agreement (FTA) involving China, Japan, and the Republic of Korea. This means that the tariff liberalization schedules agreed this time will not only enhance market access for goods exported from these countries but also raise the opportunity for the partners to participate more in global value chains. It provides a rising-tide model for regional economic integration.
As such, APEC is steady in its pursuit of our long-term aspiration for integration through a Free Trade Area of the Asia-Pacific (FTAAP), which will give us the opportunity to galvanize our approach to incorporating the so-called “next-generation trade and investment issues,” which include digitalization, inclusive growth, and sustainability.
In the past months, APEC minister-level officials have been in meetings and policy dialogues in person in Thailand for the first time in two years, signaling renewed enthusiasm and commitment to cooperation despite differences and disagreements borne by global geopolitics. The high-level gatherings cover all sectors crucial to the region’s recovery from trade, health, tourism, forestry, and food security to the economic empowerment of women, and small and medium enterprises.
The outcomes of discussions among ministers are guided by Thailand’s theme this year to Open, Connect and Balance the region’s economy, and demonstrate how APEC recognizes that economic goals should include not just economic growth, but must also ensure the well-being of people, inclusion, equity, and sustainability.
This November, APEC leaders will meet in Bangkok. There will be differences, but it will be a reaffirmation of the commitment to common goals.
APEC is diverse in terms of both ideology, as well as the size of the economies it brings together as equals. It is not a rules-based forum, which means its most common currency is trust. Specifically: trust in the fact that each member as well as each representative from the business community, or academia, or anyone brought to the table is invested in a greater good brought about by cooperation rather than division.
Trust has seen us over the course of many challenging events, including two major financial crises, the disruptive trade tensions, and of course, the COVID-19 pandemic. We have heard many experts point out cracks in the old comfortable order but, so far because of this trust, multilateral cooperation endures.
Dr Rebecca Sta Maria is the executive director of the APEC Secretariat.