The U.S. Is Missing The APEC Opportunity

The United States will host the Asia Pacific Economic Cooperation Summit this November in San Francisco, the grouping of 21 economies that accounts for some 60% of global GDP, so this could be a promising opportunity. Unfortunately, the U.S. is passing on the opportunity and will not put forward the ideas, initiatives, content, or reforms that might be of material help to the U.S. or any other APEC members. At odds with the very name of the organization, the U.S. does not seem particularly interested either in the Asia-Pacific economies or in cooperation, and we will be left with self-serving proclamations, political posturing, and the type of abstract passive-voice mush that comes out of a system when no one has any ideas (e.g., “supply chain resilience”). If you wanted to feed the narrative that the era of U.S. leadership is over, the APEC Summit might, sadly, be Exhibit A. China can offer trade deals and loans, but the U.S. can only offer lunch.

What is odd about this tough conclusion is that the Biden administration has shown strong leadership instincts when it comes to politico-military issues, with AUKUS bringing the U.K. into the mix and improving Australia’s regional role, and with the Quad upgraded to a leaders’ meeting and supporting continued outreach to India. Additionally, when you meet or discuss APEC with the U.S. team, they are all serious professionals. So the U.S. does not lack talent.

But on economic and trade issues, the Biden administration is frozen. The kindest assumption is that this is politically driven. Even with those constraints there could be avenues for marginal steps, but not as far as Biden is concerned.

The event itself is likely to be a competent display of hospitality, despite the lack of outcomes, and San Francisco seems poised to do a good job as host. The Biden administration will be helped by the low degree of awareness or understanding of APEC in the general population. As can happen with international gatherings, there can be a bit of a thieves’ pact. Other countries have strong incentives to declare even the most empty of meetings a success, and the U.S. corporate sponsors are unlikely to admit that the juice was not worth the squeeze. The Biden administration can do next to nothing and still claim victory.

The Biden Stasis

Biden is likely to finish his term as the only president in the modern era not to initiate or close a trade deal. No new markets for U.S. workers. No cheaper inputs into U.S. manufacturing. No harnessing of international technology. No broader consumer choice.

Trump was famously–theatrically–hostile to trade. But to be fair to Trump, he did go ahead with a digital free trade agreement with Japan and he did launch the U.S.-Kenyan free trade negotiations. Biden (thankfully) has a more subdued presence, but his aversion to helping workers and the broader U.S. economy adjust is unprecedented.

No creativity

What steps could be taken at APEC? Here are four illustrative ideas.

The biggest trend in education is the move to online instruction. What about promoting on-line college courses among APEC members? There are hundreds of U.S. universities that offer free online courses, to benefit of students the world over. How can we encourage other schools to spread knowledge, joy, and understanding? You won’t find this question at APEC.

What about telemedicine? Are there ways to get the brightest medical minds of the APEC region to assist countries that need help? Think about the needs in remote islands in the Philippines or Indonesia, so that a local doctor could connect with the Cleveland Clinic. You won’t find this discussion at APEC.

Travel and tourism? Could we use a little openness to help tourism locales that were hit hardest by Covid restrictions? Are there ways to explore or pilot “Open Skies” agreements or broader civil aviation rights? You won’t find regulatory improvements on the agenda at APEC.

Trade? Even at a time with little political support for trade, can we take a few baby steps? For example, could each country eliminate a tariff on an item which it does not produce domestically, so there would be no aggrieved domestic constituency? Not something APEC will discuss.

No leadership

Because other countries have a limited ability to lead, an entire year can take place at APEC with no particular developments. The shame of it all is that the U.S. has the capacity to lead, but no vision. APEC takes one more step to becoming merely a symbolic organization.

The world is not standing still. China is not standing still. Technology is not standing still. But the U.S. is firmly committed to standing still. The U.S. might not be good at leadership, but we are certainly good at declaring we are good at leadership.

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