Combining with effort: APEC participants are trying to overcome their differences

The APEC Forum is approaching its climax: on November 1, its participants — representatives of the 21st economy of the region - must adopt a common declaration. This will be a serious success, given the difficult geopolitical situation in the world, and the representation at the summit of countries from different "camps" and with completely different levels of economic development. And the political, trade and territorial disputes between them only exacerbate the tension. However, as stated by the head of the Russian delegation, Deputy Prime Minister Alexei Overchuk, destructive trends should not be allowed to undermine the region's position as a global economic locomotive. Whether the APEC countries will be able to overcome differences and strengthen cooperation is in the Izvestia report.

Difficulties at APEC

On October 31, the main program of the Asia-Pacific Economic Cooperation Forum started in Gyeongchu, South Korea. On this day, a meeting of the heads of delegations of the 21st APEC Economy was held, and the adoption of a joint declaration is scheduled for the next day. The document is expected to be small but succinct. The Russian side expects that it will give a strong impetus to the implementation of specific projects with the participation of the most interested countries.

The expression "economies" rather than "participating countries" is not accidental — representatives of Taiwan, which China considers part of its territory, are involved in the work of APEC. At the same time, the island joined the group with the full approval of Beijing. In order not to create unnecessary tension, a compromise term is used that does not infringe on the sovereignty of the PRC and does not infringe on Taiwan. In addition, representatives of Hong Kong, a special administrative region of the People's Republic of China, traditionally participate in APEC summits.

The Russian side is represented by Deputy Prime Minister Alexei Overchuk, and the delegation also includes Deputy Foreign Minister Alexander Pankin. However, the organizers have completely separated the journalists from the speakers, so it's a difficult task to get to the site where "big politics" is taking place. As a result, it was possible to meet Russian representatives only outside of working hours: at the hotel where the delegation was staying, or — in case of great luck — near the cultural attractions of the city.

"It's a nightmare, many journalists have flown to Korea for so long not to see anything," a Mexican journalist who works in Bangkok complains in an interview with Izvestia. — This is my first big business trip, and I was very energized, and as a result, such an organization.

The South Koreans have indeed made a colossal mistake in this regard — APEC is already difficult to call a well-known structure. And the more the receiving party restricted journalists, the less content was created.

APEC as a whole is a complex entity: it does not have the status of an international organization or its own charter. This is, in fact, a forum where participants conduct a dialogue on cooperation on a wide range of socio-economic issues. It's something like the G7 or G20. But unlike them, APEC has a permanent secretariat based in Singapore. Geography is considered the main unifying factor.: As the name suggests, the participants have access to the Pacific Ocean.

What divides APEC

At first glance, the APEC countries divide more than they unite. It seems that Catholic Peruvians, Malaysian Muslims or Japanese have something in common, where, first of all, Buddhism and Shintoism are practiced? APEC includes countries with different political systems and levels of economic development. It has both the largest economies in the world and states like Papua New Guinea, where most of the population lives in poverty. In addition, the current difficult geopolitical situation only reinforces the split.

"I really want to visit Russia, but I'm afraid they won't let me into the United States later,— one of the photojournalists present at the event tells Izvestia.

"Everything will be fine, they're letting the Russians in even now," I reply, and then I remember that just recently the American side did not approve my visa to attend the Vladimir Putin and Donald Trump summit in Anchorage without explaining the reasons.

Our conversation convinces me how much political differences interfere not only with ordinary human contacts, but also with more fruitful cooperation between APEC participants. Alexey Overchuk, in particular, told Russian journalists that some unfriendly countries were signaling to Moscow their desire to restore contacts and return to more normal relations. But at the same time, they are "very careful" about making information about such contacts public. In other words, there are meetings with the Russian delegation, but they don't want to talk about them publicly.

— Initially, APEC was a regional association, and geography is still what keeps them together. Trade, logistics, and infrastructure are already superstructures stemming from geographical proximity. And politics, as always, divides us. In an association where there are Russia and China on the one hand and the United States with its Asia—Pacific allies, it is difficult to come to a compromise and make serious decisions that would suit everyone," Pavel Shaternikov, a junior researcher at IMEMO RAS, said in an interview with Izvestia.

APEC includes several countries that Moscow considers unfriendly— Australia, Canada, the United States and New Zealand, as well as South Korea, Japan, Singapore and Taiwan.

But it's not just the Ukrainian crisis that has become a dividing line. The tariff policy of American President Donald Trump has put many countries in front of a choice — the economic benefits of cooperation with China or maintaining close relations with the United States. South Korea, which holds the APEC presidency and signed a trade agreement with the United States this week, can serve as a good example.

Large Korean companies have invested billions of dollars in the construction of factories in China, while they are technologically dependent on American partners, Lyudmila Zakharova, a leading researcher at the Center for Korean Studies at the ICSA RAS, explained to Izvestia. In the unfolding trade war between China and the United States, the Republic of Korea finds itself in a kind of "fork" between the interests of its military-political ally and technology supplier on the one hand and its main trading partner on the other. At the same time, in the Korean language, a similar situation is well described by the saying: "In the battle of whales, shrimp backs crack."

— The United States has stepped up the decoupling process (disruption of ties. — Ed.) with China and are forcing their allies to do the same, primarily in high-tech industries. At the same time, the "drift away from China" will not be able to be rapid, given the high level of trade dependence of countries on each other, the expert continued.

For South Korea, this will be quite painful, since China accounts for more than 20% of the total foreign trade turnover of the Republic of Kazakhstan. However, political considerations are beginning to prevail over economic calculations, forcing businesses to rebuild established production and distribution chains under the influence of US sanctions restrictions, Lyudmila Zakharova emphasized.

Washington's policy contributes to an increase in ROK investments in the United States and a reduction in the flow of investments to China. At the same time, Korean companies risk being under fire from Chinese sanctions that Beijing is imposing on US-registered firms (including South Korean ones) as a response to Washington's actions, she concluded.

Moreover, there are also territorial issues in the South China Sea - Brunei, Vietnam, China, Malaysia, Taiwan and the Philippines are involved in the dispute to varying degrees. And, of course, the complicated relationship between Beijing and Taipei.

— We are a young generation, independent, which no longer has any connection with China. And we want Beijing to perceive us as an equal, as an independent country," a journalist who came to Gyeongchu from Taiwan tells Izvestia.

New perspectives for the region

It is in such a turbulent time that the world needs venues such as APEC, where representatives of countries and territories that cannot yet find common ground can meet at the same table. The handshake between Alexey Overchuk and President of the Republic of Kazakhstan Lee Jae—myung is part of the protocol, but it gives hope for the resumption of the once fruitful cooperation between Moscow and Seoul. The presence of Russia and Western states in the same room confirms that the process of globalization after the collapse of the bipolar world has developed so actively that it cannot be destroyed even by sanctions and military blocs.

"Cooperation and solidarity are the only solution that will allow us to move forward," President of the Republic of Korea Lee Jae—myung said at the opening of the summit, and it is difficult to disagree with him.

Similar messages were heard in the speeches of other speakers. According to Alexey Overchuk, the state of the global and regional economy requires a collective response to common challenges. Global connections and production supply chains are being disrupted, the foundations of the multilateral trading system represented by the WTO are being undermined, and unilateral sanctions and tariffs threaten the stability of markets, jobs, and incomes in the region, he noted.

— These destructive trends should not be allowed to undermine the region's position as a global economic locomotive. It is necessary to revive the spirit of multilateralism and solidarity as opposed to the logic of confrontation," said the Russian Deputy Prime Minister.

APEC was created as a platform for boosting trade and investment. Its focus should be on the complex interconnectedness of institutions, regulations, and human contacts, Alexey Overchuk believes. Chinese leader Xi Jinping, in turn, called on the region to "jointly protect multilateral trade" and build an "Asia-Pacific Community." Obviously, there were hints in these speeches about the politics of the United States and the West in general.

According to political analyst Viktor Pirozhenko, the United States is currently rebuilding the supply chain in its most critical industries in order to win economic competition with China in world markets, which entails a restructuring of the geography of world trade. The goal for the United States is to get rid of dependence on Chinese imports in the most important sectors of the economy. But along the way, they disrupt established supply chains, which leads to disruptions in global trade and increases producer costs. The APEC countries are also in this process.

"Objectively, they are interested in establishing new trade routes, often bypassing the United States and the routes they control, as the States curtail their participation in multilateral trade and economic organizations," the expert added.

In this sense, the countries of Southeast Asia and APEC, for example, may be interested in the Northern Sea Route as the shortest supply route to Europe, possibly to the east coast of North and South America. The NSR and cross-border supplies through the territory of the EAEU countries can be alternatives to the Panama and Suez Canals, Viktor Pirozhenko is sure.

The development of logistics projects is an extremely important area for most APEC participants. At a minimum, these initiatives can reduce the final cost of the product. And this can already have an impact on the economic growth of countries, explained Georgy Ostapkovich, research director of the HSE Center for Economic Studies.

Russia, for its part, is working to improve the connectivity of the Eurasian space both in the East-West direction (work is underway here on the integration of Eurasian integration and the Chinese initiative "One Belt, One Road"), and in the North–South direction, said Alexey Overchuk.

However, the further development of the region will depend on how politics will prevail over economic benefits. And to what extent the collective West will be able to see competitors on the world stage not as enemies, but as partners, cooperation with whom brings more benefits than rivalry.