APEC Nations Divided Over Future of Free Trade

Fault lines were quick to emerge over the future of free trade as leaders gathered for an Asia-Pacific summit Saturday, with some calling for radical change while others argued for a return to the status quo on globalization.

Speaking at the Asia Pacific Economic Co-operation (APEC) summit in Papua New Guinea, Malaysian Prime Minister Mahathir Mohamad warned that globalization was leaving some people behind and fueling inequality.

“The benefits of free and fair trade and economic integration have been ruptured, exemplified by Brexit and trade wars between major economies,” Mahathir said. “The trade war between the U.S. and China has amplified further the disruption to our trade and commerce.”

Australian free trade defense

Australian Prime Minister Scott Morrison followed by mounting a full-throated defense of free trade.

“Our efforts must be about persuading and convincing our peoples again about the domestic benefits,” he said.

He said more than a billion people had been lifted out of extreme poverty since 1991 because of the jobs and more affordable consumer goods that free trade enables.

His speech was a clear reference to the escalating trade war between the United States and China, along with the general protectionism of U.S. President Donald Trump.

“We are witnessing a rising tide of trade protectionism along with financial volatility in some emerging economies,” Morrison said. “The test for us now is to stand up for the economic values we believe in and show how they work.”

Warning against protectionism

Speaking on a cruise ship tethered in Port Moresby’s Fairfax Harbor, Russian Prime Minister Dimitry Medvedev joined Morrison in warning against growing protectionism and argued for clear cut and transparent rules on trade.

Russian President Vladimir Putin is not attending APEC.

That anti-protectionism sentiment was also echoed by Chinese President Xi Jinping.

The shadow of protectionism and unilateralism is hanging over global growth, Xi said, joining his global counterparts in urging free trade.

China and the United States have been locked in an escalating trade war since Trump won election in 2016.

Trump has skipped the annual meeting of the 21-nation grouping, but U.S. Vice President Mike Pence will be speaking later in the day.

Pence tweeted he would discuss “Trump’s commitment to prosperity, security and freedom in the Indo-Pacific.”

China’s ambitions

China has also been at loggerheads with the United States over its territorial ambitions in the Pacific, encapsulated by Xi’s Belt and Road Initiative.

Unveiled in 2013, the Belt and Road initiative aims to bolster a sprawling network of land and sea links with Southeast Asia, Central Asia, the Middle East, Europe and Africa.

China’s efforts to win friends in the resource-rich Pacific have been watched warily by the traditionally influential powers in the region — Australia and the United States.

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