World leaders gathered this week for the highly anticipated Asia-Pacific Economic Cooperation (APEC) summit held for the first time in Lima, Peru, amid a backdrop of shifting global trade dynamics and political concerns. The event kicked off on November 13, 2024, drawing together representatives from 21 member economies, which collectively account for more than 60 percent of the global GDP and 40 percent of world trade.
Chinese President Xi Jinping arrived to attend the summit, where trade and economic cooperation were front and center of discussions. This year’s APEC gathering also closely shadowed the looming trade policies expected under the potential return of former U.S. President Donald Trump, who has previously threatened to impose substantial tariffs on Chinese goods.
Xi’s visit is particularly significant not only for engaging with the U.S. but also for reinforcing China’s influence in Latin America. He is set to inaugurate the Chancay Port, strategically located north of Lima. This $3.5 billion investment, part of the wider Belt and Road Initiative, aims to establish Peru as a key node for Chinese trade routes, enhancing connectivity between Asia and South America.
With nearly $36 billion worth of bilateral trade reported between China and Peru last year, the Chancay propects to ease shipping burdens, allowing larger vessels from Asia previously limited by existing port infrastructures to dock directly. It’s expected to reshape trade routes, significantly cutting shipping times and opening new channels for goods.
On the other side of the equation, U.S. President Joe Biden also made his appearance at the summit as he seeks to reaffirm the United States' commitment to trade relationships within the region, especially as it involves countering growing Chinese influence. His administration emphasized the importance of multilateral discussions and sustainable economic strategies.
“APEC remains key for globalization,” said Michael Walsh, executive director of the Pacific Basin Economic Council. “This year, we’re focusing on inclusive economic growth, innovation, and the transition to sustainability, which should resonate with all member countries.” With the shifting political climate, the stakes involve not just trade agreements but also questions of alliances and economic futures.
One of the main objectives set forth during the meetings is promoting regional cooperation to counteract the visible fragmentation caused by rising nationalism and protectionism globally. APEC’s dedication to fostering free trade reflects its long-standing mission to facilitate dialogue and commerce across borders.
Biden and Xi are expected to hold their first face-to-face meeting on the final day of the summit, where both leaders will likely address mutual economic concerns and the challenges posed by Trump’s trade agenda. U.S. officials voiced optimism about maintaining constructive relations, but concerns linger about the unpredictability of U.S. politics impacting international dealings.
“Our focus is our relationship with Peru and broader Latin America,” noted Matt Murray from the U.S. State Department with regards to engagement at APEC. “Countries will pursue their trade relationships naturally; it’s how business operates globally.”
The APEC summit also emphasizes the role member economies play against the backdrop of new economic constructions like the Indo-Pacific Economic Framework (IPEF). This initiative aims to deepen U.S. economic engagement but is seen with skepticism due to contrasting political narratives from the previous administration and concerns about continuity under future leadership.
The discussions at APEC squarely highlight the changed environment for business and trade amid rising global tensions. The shared focus this year includes committing to sustainability, viewing trade as mutually beneficial, and realizing the abstract potential of economic partnerships. "All these elements are shaping the way we need to think about trade and cooperation moving forward," remarked Walsh.
While the Chancay inauguration and the trade agreement between China and Peru point to immediate benefits for the parties involved, the broader APEC conversations revolve around building frameworks for resilience and adaptability to future economic shocks.
The outlook for successful collaborations seems promising, but the effectiveness of these initiatives hinges on aligning the interests of varying economies amid the growing specter of nationalism and unilateral actions from global powers.
“The Pacific Rim’s future hinges on adaptability and cooperation,” says Renzo Burotto, historian from Chile. The need for streamlined customs procedures, reduced tariffs, and enhanced digital connectivity remains urgent as economies grapple with new-age challenges.
Experts foresee such high-level dialogues as pivotal to shaping collective futures, urging all member nations to reaffirm their commitments to openness and collaboration. They encourage participation from non-members to gain access to the developing trade networks and technology transfer opportunities.
With diplomatic relations under scrutiny and economic plans on the table, the APEC summit is characterized not just by trade agreements but by the broader goal of fostering regional unity against the backdrop of geopolitical shifts. The door swings open for new partnerships and strategies aimed at overcoming fractures and building resilient and prosperous economic ties.
