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MONDAY, NOVEMBER 19, 2018
Click here for the November 6 WTO quote from Tomas Baert of the EU
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AT APEC: ONE CHURCH, TWO GOSPELS
"The United States ... will not change course until China changes its ways."
Vice President Mike Pence
November 16, 2018
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Prime Minister Peter O'Neill of Papua New Guinea was a busy man this past weekend, when his country hosted the 2018 APEC Summit in the capital city of Port Moresby. There are 21member economies in the Asia Pacific Economic Cooperation forum, and APEC summits are major undertakings. It isn't just the large gathering of global leaders - including high-level participants from the United States, China, Japan, South Korea, Chile, Mexico and Canada, to name a few. There are also the ancillary meetings, notably the APEC CEO Summit, to manage. With help from others, primarily Australia, the logistical challenges were met. The political challenge proved more difficult.
Specifically, the growing tension between the United States and China was clearly on display for all to see, and it came with a cost. For the first time in almost 30 years, the APEC leaders were not able to agree on a concluding communiqué.
President Trump attended the APEC leaders meeting last year. This year, he and the United States were represented by Vice President Mike Pence, who spoke on Friday, November 16. President Xi Jinping of China addressed the group the following day. If you read between the lines, there are some congruent strands of thought in the two speeches. That said, Mr. Pence and Mr. Xi were, in essence, two preachers with different gospels, appealing to the same congregation.
Trade and trade policies were, of course, part of both of their arguments. In a broader sense, however, each was encouraging the other APEC members to look to his country for opportunity and support now and in the years ahead. And neither held back in terms of criticizing the approach of the other.
Vice President Pence, for example, stressed the importance of U.S. investment in the Indo-Pacific. This paragraph is telling. The Vice President said:
American growth, as I said, is driving global prosperity right here in the Indo-Pacific. Over the past two years, American businesses have announced more than 1,500 new projects and more than $61 billion in new investments across this region. The United States' total investment in the Indo-Pacific is now more than $1.4 trillion - more than China's, Japan's, and South Korea's combined. And American investment in the Indo-Pacific will only continue to rise.
One Belt, One Road. From talking about investment generally the Vice President moved on to some sharp criticism of China's One Belt, One Road initiative. He said:
Not long after our War of Independence, my nation's first President, George Washington, warned of the dangers that could undermine all that we had achieved: debt and foreign interference. And so today, let me say to all the nations across this wider region, and the world: Do not accept foreign debt that could compromise your sovereignty. Protect your interests. Preserve your independence. And, just like America, always put your country first. (Applause.)
Know that the United States offers a better option. We don't drown our partners in a sea of debt. We don't coerce or compromise your independence. The United States deals openly, fairly. We do not offer a constricting belt or a one-way road. When you partner with us, we partner with you, and we all prosper.
Candidly, our principal focus in this entry is on the speech Vice President Pence gave last Friday. A side-by-side comparison of the Pence and Xi speeches is more than we can handle here. But on this subject, One Belt, One Road, we need to share some of President Xi's perspective on the issue as well. He said:
Five years ago, I announced the Belt and Road Initiative (BRI), which aims to enhance connectivity among countries and regions, promote interconnected development, and create new space for global growth. This initiative has won wide international endorsement in the past five years. China has signed BRI cooperation documents with over 140 countries and international organizations, and a large number of cooperation projects have been launched under this Initiative.
Let me make this clear: the BRI is an open platform for cooperation. It is guided by the principle of consultation and collaboration for shared benefits. It is not designed to serve any hidden geopolitical agenda, it is not targeted against anyone and it does not exclude anyone. It is not an exclusive club that is closed to non-members, nor is it a "trap" as some people have labeled it. Rather, the BRI is a major and transparent initiative with which China shares opportunities and pursues common development with the rest of the world. In April next year, China will host the second Belt and Road Forum for International Cooperation in Beijing, and we welcome members of the Asia-Pacific business community to this event.
On Trade. In the build-up to today's featured quote, Vice President Pence talked about America's dispute with China, the tariffs the U.S. has levied against some $250 billion of imports from China, with the threat of more to come. He also talked about trade liberalization, as in this passage:
Trade, of course, is central to our interests in the region. And as the President said last year, the United States will, in his words, "make bilateral trade agreements with any Indo-Pacific nation that wants to be our partner and that will abide by the principles of fair and reciprocal trade."
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Port Moresby is over 6,000 miles from Oregon, 9,000 from Washington, D.C. In short, it's a long way away. We weren't at the APEC Summit this past weekend. We don't really know what happened. All we have are guesses.
Our guess is that the failure to agree on a concluding leaders' statement, while a disappointment, is hardly a tragedy. Put differently, it could not have been a surprise-not against the background of a U.S.-China dispute that has been going on for months.
We are also inclined to believe that the diplomat who said that more progress was made than is being talked about is probably correct. But Prime Minister O'Neill was also right when he said, "The entire world is worried," as it should be.
If APEC in Port Moresby was a stepping stone in white water, there is another one coming up in a couple of weeks. That will be the G20 Summit in Buenos Aires, Argentina, November 30-December 1. President Trump and President Xi are both planning to attend.
Of course, these issues, these differences, pose problems for the United States and China. They also pose problems for everyone else, especially the countries in the Indo-Pacific region. As one analyst put it, "No one wants to be forced to make a choice." Our strong impression, based in part on things Malaysia's Prime Minister Mahathir said (and didn't say) many years ago, is that many in the region have feared giving offense to China while not worrying too much about the United States. Then the choices were easier. In the future, they may be more difficult.
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Pence at APEC is a link to the remarks of Vice President Mike Pence at the 2018 APEC Summit in Port Moresby, Papua New Guinea, on November 16, 2018. This was the source for today's featured quote.
Xi at APEC is a link to the remarks of President Xi Jinping of China at the 2018 APEC Summit in Port Moresby, Papua New Guinea, on November 17.
Squaring Off is a New York Times story, filed from Australia, with details on the U.S.-China dispute as aired by the two sides during this year's APEC Summit in Papua New Guinea.
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©2018 The Global Business Dialogue, Inc.
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R. K. Morris, Editor
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