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Seattle hosts a major trade summit with a long list of challenges [1]
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Date: 2023-07-28 06:00:00-07:00
For economic policymakers of the Pacific Rim, it’s got the importance of Major League Baseball’s All-Star Game and the anticipation of a Taylor Swift concert. And like those two, it’s happening in Seattle.
The Asia-Pacific Economic Cooperation meetings will begin this weekend at the Seattle Convention Center and continue through Aug. 21. The gatherings rotate among APEC members. In 2022, they were held in Bangkok. This year’s gatherings in the United States are called, “Creating a Resilient and Sustainable Future for All.”
Honolulu; Palm Springs, Calif.; and Detroit are the other locations for this year’s ministerial summits.
Founded in 1989, APEC is one of the most influential organizations of its kind, representing 50% of the world’s gross domestic product. The 21 members, including Australia, China, Japan, Mexico, Russia, South Korea, Vietnam and the United States, work to increase trade in the region and settle disagreements.
Or that’s how things are supposed to work.
With trade and geopolitical tensions between China and the United States, along with Russia’s invasion of Ukraine, these are fraught times. This past year, America and four allies walked out of a session in Bangkok to protest Moscow’s aggression in Ukraine.
The Biden administration has also continued many of the tariffs on Chinese imports and added new ones on semiconductors, pushing for increased domestic chip manufacturing.
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Still, APEC picked an excellent place for its meetings this year. Washington is the nation’s most trade-dependent state — and most vulnerable to trade wars, too.
APEC members figure high among the state’s merchandise export destinations — especially for Boeing and agriculture — as well as the export of services. The two natural deep-water ports of Seattle and Tacoma (linked in the Northwest Seaport Alliance) offer an impressive exclamation point to our link with Asia.
China is Washington’s largest merchandise trade destination, followed by Canada, Japan, Mexico and South Korea (all APEC members). Total world merchandise exports from the state have fallen since 2014, herded down by a deceleration in global trade, slowing growth in China, tariffs and the pandemic.
The Washington Council on International Trade laid out several topics it hopes are addressed at the summit. Among them:
• “The Biden administration’s shift in trade policy to focus on cooperation, transparency, and inclusivity, including labor rights, supply chain resiliency and decarbonization.”
• “The impact of new rules and regulations impairing cross-border digital services.”
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• “The importance of China to Washington state trade, the threats in the current political climate, and the opportunities.”
Easier said than done.
It’s unclear whether Russia will attend the summit here. Moscow recently blocked Ukrainian grain shipments to Africa, the Middle East and Asia at a time of increasing hunger. As I write this column, APEC has yet to address the issue.
Meanwhile, the United States and China are engaged in a “great power competition,” especially over the freedom of Taiwan, which Beijing considers a rogue province. From friendly cooperation in the 1990s through part of the 2010s, the other Washington is employing containment efforts against Beijing reminiscent of the Cold War.
With no George Kennan to send a “long telegram,” which the then-diplomat to Moscow did in 1946, laying out Soviet intentions and urging the first strategy of containment, we’re left wondering about constructive steps forward. Outsiders struggle to understand the decisions made by the Communist Party leadership.
According to a poll by the Pew Research Center this year, 80% of respondents said China contributed not much or nothing at all to world peace.
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President Joe Biden has vowed to protect democratic Taiwan from an invasion by the People’s Republic of China. If that happened, a conflict between two nuclear-armed opponents would send the world into an economic depression and perhaps much worse.
Even so, U.S. and Chinese officials may meet in Seattle. Even if little is settled, the conversation will be in stark contrast to Beijing’s refusal to resume high-level talks between defense officials. As Winston Churchill was quoted as saying, “Jaw-jaw is always better than war-war.”
An interesting side note: Taiwan is an APEC member, classified as “Chinese Taipei.”
China faces problems at home. Its working-age population is declining, many real estate projects are overvalued and in danger of crashing, and lacking Japan’s resilience and technological prowess. President Xi Jinping’s effort to increase homegrown advanced industries hasn’t changed this calculus. China has also seen a decline in its breakneck growth from the past several decades.
The Seattle Times editorialized that reviving the Trans-Pacific Partnership should be a priority of the summit, and rightly so. This “high-standard” trade agreement was intended as a pinnacle accomplishment of the Obama administration. But Donald Trump’s 2016 “America First” presidential campaign made the agreement political kryptonite and Hillary Clinton backed away, too.
Since then, it’s limped along as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, led by Japan. America could join, but Republicans and even many Democrats in Congress are opposed. This, even though the original Trans-Pacific Partnership would have provided unprecedented protections for labor, the environment and intellectual property.
APEC won’t solve this or many other challenges threatening trade. But it may make a start.
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[1] Url:
https://www.seattletimes.com/business/seattle-hosts-a-major-trade-summit-with-a-long-list-of-challenges/
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