Why the meeting mattered

In an age of Covid, nationalism and protectionism, Apec is crucial in helping the region navigate a turbulent global recovery.

Last December, New Zealand began its year-long role as host of Apec 2021, marking the milestone with a po¯ whiri display on Wellington’s waterfront. Unfortunately, the traditional Ma¯ ori welcome was one of the few physical events at this year’s international trade summit, which was restricted to a largely virtual conference by the Covid-19 pandemic.

Although the virus prevented the bustling meetings and side-room chats that typically grease the wheels of international trade, this year’s Apec was as important as ever.

In the age of Covid, nationalism and protectionism, crucial work on free trade agreements and multilateral co-operation will be vital during a turbulent global recovery.

Apec 2021 looks and feels markedly different to the last event hosted by New Zealand back in 1999.

But despite the logistical challenges, Aotearoa and 20 other economies, including China and the United States, had a unique opportunity to work through climate change, the regional Covid response, supply chain issues, and many other trade challenges.

After chairing a virtual meeting of Apec leaders in July, Prime Minister Jacinda Ardern hailed the summit as a chance to ‘‘build better and emerge from this crisis more inclusive, more sustainable and more adaptable than ever’’.

So why does Apec matter? Is it still relevant? Are trade deals signed at the conference? And does this intergovernmental forum have a future in an increasingly polarised world?

Asia-Pacific Economic Co-operation nations represent nearly 3 billion people across the Pacific Rim, from global superpowers such as China to fastgrowing economies such as Indonesia and Vietnam.

Together, the Apec nations account for 40 per cent of the global population. With a combined gross domestic product of US$45 trillion (NZ$64 trillion), they represent 60 per cent of global GDP.

The group’s economies grew 2.3 per cent a year between 2011 and 2016, outstripping the rest of the world, which contracted by more than 1.6 per cent over the period.

Apec economies have enjoyed a resurgent year. The Apec region recorded a 6.1 per cent increase in economic growth in the first quarter of this year, rebounding from a 2 per cent decline during the first three months of a Covid-ravaged 2020, according to a report by the Apec Policy Support Unit.

Apec was devised in 1989 by former Australian Prime Minister Bob Hawke to facilitate free trade across the Pacific. The multilateral group has retained its importance in the decades since, despite the growing prevalence of bilateral deals and smaller alliances, such as the Quad, comprising the US, India, Australia and Japan.

Apec provides a voice for smaller economies such as New Zealand that are dependent on the international rulesbased system, free trade and cooperation. It remains a vital forum for smaller nations to engage with great powers and large economies.

‘‘You’ve got some of the most vibrant economies in the world within the 21 members,’’ says Robert Patman, a professor of international relations at the University of Otago.

‘‘The Indo-Pacific region, largely encapsulated by Apec, accounts for 60 per cent of the world’s population. It is the engine of the global economy.’’

According to Patman, New Zealand could accrue ‘‘international capital’’ gained from its pandemic response: ‘‘It’s a chance to build on a growing international reputation.’’

Apec also provides a chance for nations to unthaw diplomatic relations. Russia, banished from the G8 group of wealthy economies, engaged in dialogue

with Western nations during

this year’s Apec. The US and China came together following a turbulent period of conflict and protectionism.

Apec arrived at an opportune time, alongside a host of other key international summits. The 2021 United Nations Climate Change Conference, or COP26, explored a reduction in global emissions, new technologies to reduce climate harm, and support for developing economies to cope with climate change.

From late this month, the World Trade Organisation will host its 12th Ministerial Conference in Switzerland, providing WTO member states with a chance to accelerate free trade agreements.

Academics and trade experts insist Apec remains relevant and say this year’s conference came at a pivotal time for international relations.

Charles Finny, of government relations consultancy Saunders Unsworth, says it offered nations a chance to explore urgent issues.

‘‘The fact that we have got these world leaders meeting face to face on screen, not just once or twice in a year, is really powerful at a time when we need to deal with the Covid-19 pandemic and the supply chain disruptions flowing from that,’’ Finny said.

‘‘If we didn’t have Apec, we’d have to create something like it. There are some really big issues that do need to be discussed at a global systemic

level, and the timing is good.’’

The threat of rampant inflation amid supply chain constraints, labour market tightness and closed borders will also be a key issue for Apec countries to explore over the coming year.

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Finny says the ability to bring nations with different ideologies together at the same table shouldn’t be underestimated.

Australia and China have engaged in a bitter trade dispute in recent years, deepening divisions in the Apec region.

‘‘There are a number of tensions in the region,’’ Finny says. ‘‘The fact that we’ve got these leaders talking to each other, admittedly with others in the room, is actually really positive and will hopefully lead to a reduction in tensions.’’

Patman believes New Zealand’s role as host gave a vital opportunity for smaller nations to have their voices heard in a world dominated by two major powers.

‘‘The United States and China tend to assume that the region is dominated by binary concerns – their concerns.

As a small country, New Zealand is dependent on the international rulesbased system, he says.

‘‘In recent years, we’ve seen an erosion of rules as great powers have tried to assert themselves, largely unsuccessfully. Apec may be a way of trying to reaffirm the importance of the rules-based order and tackle issues collectively.

‘‘Some issues can only be tackled collectively, such as Covid-19. The pandemic may turn out to be a good building block for international cooperation,’’ he adds.

The Otago professor believes the world’s most challenging issues, notably climate change, require a multilateral response. New Zealand was well placed to lead those discussions during Apec, he says.

‘‘Most of the problems facing Apec members, indeed, all members of the international community, do not respect borders.

‘‘Climate change is a looming danger. And it doesn’t respect boundaries. Although it’s developing more slowly than Covid-19, it is probably much more dangerous than a global pandemic.

‘‘The prime minister has spoken about the necessity of international cooperation,’’ Patman adds.

‘‘The fact is, countries can’t solve these problems on their own. Out of selfinterest, they have to co-operate.’’