For 1st time in APEC history, leaders fail to reach consensus amid U.S.-China spat

19, Nov. 2018

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PORT MORESBY, Kyodo - Leaders of 21 Pacific Rim economies failed to agree Sunday on a joint declaration for the first time, because of a deepening divide between the United States and China over trade and other issues.

Papua New Guinea Prime Minister Peter O'Neill, chair of the two-day Asia-Pacific Economic Cooperation summit, said the leaders were at odds over World Trade Organization reforms due to "two giants in the room," alluding to China and the United States represented by President Xi Jinping and Vice President Mike Pence respectively.

O'Neill said that he may release a statement in his capacity as the chair of the summit.

APEC's failure to release a joint statement for the first time since the forum started in 1993 comes at a time when Washington and Beijing have been engaged in tit-for-tat rounds of punitive tariffs on hundreds of billions of dollars of each other's imports.

"This is a situation that both countries need to sit down and talk about," O'Neill said at a press conference.

Concerns are growing about the ongoing debate on trade as well as relations between Washington and Beijing, and the upcoming Group of 20 summit in Argentina will be an "opportune time" for the leaders to talk to resolve their issues, he said.

O'Neill was surrounded by a mob of reporters as he first tried to exit from the conference venue without explaining anything about the joint declaration.

Ahead of the opening of the summit on Saturday in the Papua New Guinean capital of Port Moresby, Pence urged Beijing to change what are seen as its unfair practices, while Xi slammed U.S. President Donald Trump's "America First" policy in a business conference.

Trump has not traveled to the South Pacific island nation, sending Pence instead.

During the summit, Xi said that protectionism and unilateralism under the Trump administration are resurfacing and multilateral trade is "under assault," according to China's Xinhua News Agency.

"The global economic environment is fraught with risks and uncertainties," Xi added.

After the meeting, Pence told reporters Washington and Beijing have differences ranging from trade practices to forced technology transfers.

"It goes beyond that to freedom of navigation in the seas, concerns about human rights," Pence said.

Trump's trade policy has been under fire for its possible negative impact on the global economy, as his administration is increasing efforts to reduce its more than $700 million trade deficit.

The United States, Japan and other economies, on the other hand, blame China for market-distorting practices, such as its intellectual property violations and industrial subsidies.

The United States demanded that the need for drastic reforms at the WTO be included in the joint declaration since the international body does not restrain such acts by Beijing, according to a source familiar with the negotiations.

According to the Associated Press, Canadian Prime Minister Justin Trudeau said after the meeting, "I don't think it will come as a huge surprise that there are differing visions" on trade. "Those prevented there being a full consensus on the communique."

But a senior Chinese official denied any confrontation between China and the United States had prevented the leaders from reaching consensus.

"Although we can't deny that we have different opinions from the United States, they are issues that can be settled in a constructive manner," the official said in a separate news conference.

In the APEC summit, Japanese Prime Minister Shinzo Abe expressed concerns about worldwide protectionist movements and stressed that any measures should be taken in accordance with WTO rules, a senior official said.

As a "flagbearer for free trade," Japan is determined to work toward the realization of an APEC-wide free trade agreement called the Free Trade Area of the Asia-Pacific, Abe said. The envisioned regional pact encompasses about 40 percent of the world's population, about half of global trade by volume and some 60 percent of the world economy.

Aside from trade, the leaders extensively discussed financing for infrastructure projects and investment in the Asia-Pacific region at a time when China is increasing its influence through Xi's "One Belt, One Road" infrastructure initiative.

In Thursday's meeting, APEC ministers adopted new guidelines on infrastructure development and investment, calling for openness, transparency, cost-effectiveness and the fiscal soundness of recipients as international standards for quality infrastructure.

The guidelines are viewed as a veiled counter to China, as countries such as Sri Lanka and Pakistan are now struggling to repay massive loans received as "aid" under the infrastructure initiative aimed at connecting nations along the ancient Silk Road.

The annual meeting is being held under tight security due to Port Moresby's high crime rate stemming from high unemployment and "raskol" street gangs, with neighboring countries such as Australia, Indonesia and New Zealand providing support.

APEC groups Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam. (Kyodo)