The 17th APEC Economic Leaders Meeting ended yesterday afternoon in Singapore after members issued a joint declaration entitled "Sustaining Growth, Connecting the Region", and a statement themed "A New Growth Paradigm for a Connected Asia Pacific in the 21st Century". The overall tone of the statements was sombre, emphasising the fragility of the economic recovery and the need to engineer more balanced economic growth. The declaration also said that its members opposed all forms of protectionism and called for a successful conclusion to the Doha Round of multilateral trade negotiations in 2010. But the final communiqué disappointed with the absence of any hard commitments to reduce greenhouse-gas emissions, and for its failure to make reference to exchange rate policies. Both issues had been included in earlier draft statements.

Twenty-one heads of government attended the two-day summit, including U.S. president Barack Obama, Chinese president Hu Jintao and Japanese prime minister Yukio Hatoyama. This was the most important international event to have taken place in the city state since the World Bank and the International Monetary Fund (IMF) held their annual meetings there in 2006. Many other meetings took place on the side, including the first summit bringing together the United States and the ten countries of the Association of South East Asian Nations (ASEAN). The major issues under consideration at the APEC summit were as follows:

• A New Economic Growth Paradigm: APEC leaders pledged to pursue a new economic growth strategy in the wake of the global crisis. They promised to maintain economic stimulus measures and put in place comprehensive, balanced, and sustainable growth policies to ensure durable economic recovery. Leaders also expressed commitment to open markets, refraining from implementing trade and investment tariffs, resisting protectionism, and co-operating in order to conclude the Doha Round of global trade talks in 2010. The new economic-growth paradigm is widely interpreted as a euphemism for reducing Asian reliance on Western exports as well as closer regional economic integration. Indeed, a free-trade zone covering over 50% of the world's global economy was a key theme at the APEC forum, as officials were told to look into ways to accelerate the elimination of trade barriers among the 21 member economies. One possible starting point was the little-known group called the Trans-Pacific Partnership, involving Brunei, Chile, New Zealand and Singapore. However, the same issues that have dogged progress on the Doha round of trade talks, including disputes between developed and developing countries over farm subsidies and market access, are also likely to emerge over the Free Trade Area of the Asia Pacific (FTAAP).
• Climate Change: Leaders conceded that it would not be possible to clinch a climate-change deal ahead of next month's United Nations conference in Copenhagen. A target of reducing greenhouse gas emissions by 50% by 2050 included in an earlier draft statement was left out. Leaders said that talks were likely to continue well beyond the Denmark meeting, adding that a framework for future negotiations was the best possible outcome. However, they did promise to co-operate more closely to address challenges posed by climate change and to work towards "an ambitious" outcome at Copenhagen. President Obama also gave a speech to APEC members yesterday stressing that they needed to follow a growth model that would allow all nations to experience economic growth and improve living standards without damaging the environment. The fast-growing Asian economies are now key polluters and their participation is vital to any effective global climate change deal.
• Exchange-Rate Policy: Asian leaders at the summit failed to join the United States in pressing China to abandon its currency controls. The latter are nonetheless a concern to many South-East Asian countries in particular, who have been forced to prevent their currencies from strengthening because China has kept the yuan pegged to the dollar since mid-2008.

U.S.-ASEAN Summit Focuses on Security, Myanmar Repression

As mentioned, President Obama also participated in the first-ever U.S.-ASEAN summit, where subjects under discussion included terrorism, nuclear proliferation, as well as development and environmental issues. Although the concrete results were limited to the participants agreeing to hold a regular annual summit, the meeting held strong symbolic significance. It showed how much importance the United States now attaches to its relations with the fast-growing region, and the regular summits should give additional momentum to co-operation. The meeting was also notable for being the first time in 43 years that a U.S. president has met with the Myanmar military regime's leader. At the summit, Obama "directly" urged Myanmar's prime minister Thein Sein to release detained opposition leader and pro-democracy icon Aung San Suu Kyi. According to the White House Press Secretary Robert Gibbs, the demand was made face-to-face. Obama also called on Myanmar to free 2,000 other political prisoners and end its crackdown against minority groups. The U.S. president is making good on his pledge to engage with "rogue" governments, which he argues is more effective than the isolation preferred by his predecessor. Prime Minister Thein Sein apparently thanked the United States for its new engagement policy, but did not respond to the demands over prisoners or Suu Kyi. The summit's final statement failed to mention Suu Kyi, only stating that the ASEAN leaders "welcomed the policy of the United States to engage with the government of Myanmar". This unsurprising lack of pressure on Myanmar indicates that no major policy shift or true pressure on Myanmar can be expected from other ASEAN states ahead of the military regime's May 2010 general elections. Aung San Suu Kyi,—whose National League for Democracy (NLD) achieved an overwhelming victory in the country's 1990 elections, but were refused power by the military junta—has spent nearly 14 of the past 20 years under house arrest. Her house arrest was extended for another 18 months in August.

Outlook and Implications

The 21 members of APEC represent more than 50% of the world's economic output, and have the lofty goal of achieving a free-trade and investment area linking North and Latin America with East Asia and Australasia. But in reality, the group tends to decide very little. With APEC leaders releasing another broad and vaguely worded statement, this year was no exception. Indeed, APEC is an even more loosely co-ordinated group than ASEAN, which itself is often criticised for a lack of organisation and structure, raising serious questions over its ability to provide strong leadership and solutions to economic issues in the region.

The United States' promise of more direct engagement with South-East Asia has nonetheless been welcomed. Most importantly, increasing U.S. engagement with the bloc will allow the countries to diversify their economic and political relations. In recent years, they have become increasingly dependent on regional giant China. The United States offers a counterweight against this. Obama's willingness to talk to "rogue" leaders distinguishes him from his predecessor, George W. Bush, under which the U.S. engagement with the ASEAN bloc was reduced to a minimum due to difficulties in U.S.-Myanmar relations. As China's economic and military influence in the Asia-Pacific region is growing, the United States can no longer afford not to engage if it wishes to retain its world power status.

Global Insight (Reino Unido)