Top world leaders meet from today to try to save their cherished free trade accords from feared extinction under US President-elect Donald Trump.Here are three big factors looming over the Asia-Pacific Economic Cooperation (APEC) summit from today to Sunday in Lima, Peru.
Trump has cast uncertainty on the postwar world order with his vows to tear up or renegotiate international free trade agreements in order to protect US jobs.This particularly concerns the 21 members of APEC, which account for nearly 60 percent of the global economy and 40 percent of the world’s population.
The world will look to the summit for “a strong statement” to counter Trump’s anti-trade arguments, said Eduardo Pedrosa, secretary general of the Pacific Economic Cooperation Council. Economists expect Trump to make protectionist moves that they say may strengthen his country’s economy in the near term but could threaten global growth.
He may impose punitive tariffs on powerful trade partners such as China and revise key free trade deals with countries such as Mexico that rely on the US market, the Institute of International Finance said.”If such measures materialize, trade tensions would certainly increase, with trade war a possible worst case scenario,” it said in a report.
Outgoing US President Barack Obama sought to “rebalance” trade towards deals with Asia and the Pacific.But Trump has rejected Obama’s signature trade initiative in the Asia-Pacific region, the Trans-Pacific Partnership (TPP), as a “terrible deal.”As well as taking aim at free trade, Trump has questioned the US role as the “policeman of the world.”
Allies such as Japan and South Korea are worried Trump will cut back the US military, economic and diplomatic presence in the region.They fear that could leave them exposed to a dominant China and belligerent North Korea.
Trump has caused concern in the region by suggesting Japan and South Korea get nuclear weapons to defend themselves.He has embraced Russian President Vladimir Putin, widely mistrusted by Obama and his allies.
The summit officially opens today evening. Obama, Putin and China’s President Xi Jinping are each scheduled to give addresses on Saturday. The leaders hold their key meeting on Sunday.