As the U.S. remains mired in political gridlock at home, a similar show was on view between the 21 global powers gathered at the second day of the Asia-Pacific Economic Cooperation (APEC) in Bali, Indonesia. The group of nations was assembled more than two decades ago to promote trade and economic growth in the region, and there was plenty of wheeling and dealing to be seen as heads of state and business leaders jostled over how best to knock down barriers and disparities to foment prosperity.
The stakes are certainly high given the stats: the participating nations boast 3 billion people, 44% of global GDP and 45% of global direct investment. But with U.S. President Barack Obama choosing to withdraw from the summit in order to deal with a government shutdown at home and Secretary of State John Kerry arriving in his place, there was not much love on show for American policies. At one point, Indonesian Trade Minister Gita Wirjawan joked that “people in the U.S. are more likely to believe in a UFO than free trade.”
Central to the day’s discussions was the prospective Trans-Pacific Partnership (TPP) free-trade agreement that is currently being negotiated between the U.S. and 11 other APEC nations. TPP has been touted as a “21st century free trade agreement,” slashing red tape and streamlining regulations around the fringe of the world’s largest ocean. But the partners remain unable to agree on certain principles regarding intellectual property, labor rights and the environment, as well as the possibility of nations stockpiling commodities for re-export at future times.
Japan and the U.S. in particular are facing a considerable domestic backlash from those seeking to protect vital national industries, like farming and dairy, that have long stood as economic backbones and key job creators. With the agreement, such trades may come under threat from cheap foreign imports. Nevertheless, amid the impasse, Japan’s Economic and Fiscal Policy Minister Akira Amari told reporters on Sunday that talks were “moving forward steadily” and a basic rule of tariff eliminations had been agreed in principle.
But as the group attempts to forge a new economic path forward, it was telling that few looked to the U.S. for guidance or advice. Host country Indonesia hasn’t yet signed onto the TPP, as officials hedge bets on a rival trade agreement, but Finance Minister Chatib Basri eagerly angled his vision for future prosperity northward toward the Middle Kingdom instead of across the Pacific. “China is very important for Southeast Asia,” he said. “If we open it up [with free-trade deals], it will be very beneficial for many Southeast Asian countries.” Oleg Deripaska, supervisory board chairman of the Russian company Basic Element, similarly fawned over Beijing’s paramount regional role. “The more stable China is, the more stable the Asia-Pacific,” he said, outlining significant benefits for neighbors to the world’s second largest economy.
Experts warn that such overt hostility to Washington’s policies is not surprising. “Promotion of free trade and investment has been the weakest pillar in the Obama Administration’s Asia-Pacific strategy,” John Ciorciari, assistant professor at the Gerald R. Ford School of Public Policy at the University of Michigan, tells TIME. Ciorciari argues that APEC offers the best multilateral opportunity to push forward with the “rebalancing,” and while U.S. officials have set several goals for Bali, such as improving supply-chain performance and limiting requirements for products to contain certain amounts of local contents, these can hardly be considered ambitious. Nevertheless, “they would be a start in reversing the momentum away from free trade and investment,” adds Ciorciari. “Some modest successes are also needed to arrest APEC’s gradual loss of relevance.”
While the bulk of high-level negotiations took place behind firmly closed doors, delegates were treated to a bit of public diplomacy when Chilean President Sebastián Piñera twice invited Chatib to enter Indonesia into a bilateral free-trade agreement before a crowd of hundreds while the pair were on the plenary stage. And twice Chatib squirmed a tepid response, eventually shoving off Piñera in explaining his country was as “at an early stage” of investigating such bargains.
Politicians may not have been eager to sign and seal agreements during the summit, but business leaders were among the most fervent cheerleaders for the desired red-tape reductions. “It will be a boon to entrepreneurship and new business startups. We applaud the steps that have been taken,” said Michael Ducker, COO of FedEx Express, a supporter of TPP. Even for long-established firms like his, Ducker highlighted the benefits of easy-to-navigate rules to manage the increasingly global supply chain.
Hiromasa Yonekura, chairman of Japan’s Sumitomo Chemical, called TPP a “golden pathway” toward the goal of extensive regional free trade by 2020. “The highest priority is a more open and seamless business environment,” he told delegates. “We are certain that [this] will make the growth of the Asian-Pacific region more sustainable.”