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Obama’s Absence Leaves China as Dominant Force at APEC
Obama’s Absence Leaves China as Dominant Force at Asia-Pacific Meeting
(about 11 hours later)
NUSA DUA, Indonesia — Secretary of State John Kerry sat in the chair reserved for President Obama at the opening session of the Asia-Pacific Economic Cooperation summit meeting on Monday, leaving China’s leader, Xi Jinping, as the dominant leader at the gathering, devoted to achieving greater economic integration in the region.
NUSA DUA, Indonesia — Secretary of State John Kerry replaced President Obama at the opening of the Asia-Pacific Economic Cooperation meeting on Monday, leaving China’s president, Xi Jinping, as the dominant leader at a gathering devoted to achieving greater economic integration.
Mr. Obama, who canceled his appearance at the meeting to try to resolve the government shutdown in Washington, had planned to use his personal persuasion to push forward negotiations for the Trans-Pacific Partnership, a trade bloc that is led by the United States and that excludes China.
Mr. Xi, the keynote speaker, delivered a long, tightly scripted speech that made no reference to Mr. Obama and concentrated on the theme of Chinese economic overhaul at home, and the need for China to have the Asia-Pacific region as a partner abroad.
A statement by foreign and trade ministers painted a fairly gloomy economic forecast for the 21 members of the Asia-Pacific Economic Cooperation group as the leaders met at an international conference center on the Indonesian island of Bali.
“China cannot develop in isolation of the Asia-Pacific, and the Asia-Pacific cannot prosper without China,” Mr. Xi said.
“Global growth is too weak, risks remain tilted to the downside, and the economic outlook suggests growth is likely to be slower and less balanced than desired,” the ministers said.
The absence of Mr. Obama, who canceled to try to resolve the government shutdown in Washington, was repeatedly noted at the conference, held in this enclave of international resorts on the Indonesian island of Bali. But Mr. Kerry, for his part, made light of his role as the stand-in.
To overcome the slow growth, it is imperative for the group to agree on a “comprehensive series of structural reforms so as to increase productivity, labor force participation and high-quality job creation,” the statement said.
“In 2004, obviously, I worked very, very hard to replace a president,” Mr. Kerry told his audience, referring to his unsuccessful campaign against President George W. Bush. “This is not what I had in mind.”
According to data from the group, its members account for about 40 percent of the world’s population, 55 percent of global gross domestic product and about 44 percent of world trade. Trade within the group has grown nearly sevenfold since it was founded in 1989, topping $11 trillion in 2011.
According to data from the Asia-Pacific Economic Cooperation, known as APEC, its members — including the United States and China, Russia, Mexico, Canada and 16 other countries — account for about 40 percent of the world’s population, 55 percent of global gross domestic product and about 44 percent of world trade. Trade within APEC has grown nearly sevenfold since 1989, topping $11 trillion in 2011.
The American trade representative, Michael Froman, said the Obama administration remained committed to trying to complete the negotiations for the Trans-Pacific Partnership by the end of the year. “Our message is ‘Let’s get this done as soon as possible,'” Mr. Froman said in an interview. The Dec. 31 goal is “ambitious, but it’s doable,” he said.
But in his opening remarks to the APEC leaders, President Susilo Bambang Yudhoyono of Indonesia said that the grouping was more important than ever because its member economies continued to “feel the pain” of the global economic crisis.
The partnership, a major element of Mr. Obama’s pivot toward Asia, is intended to achieve open market access among the 12 participants, with the United States, Japan, Mexico and Canada as the major economies.
The administration was hoping that the leader of South Korea, Park Geun-hye, would announce at the meeting that South Korea was ready to join the negotiations. But South Korean officials said Ms. Park would not make that declaration in Bali.
The absence of Mr. Obama took some gravitas out of the conference, and there were deep questions about how the president could get a trade pact through Congress given the hostility of conservative Republicans in the House toward his domestic programs.
The prime minister of Singapore, Lee Hsien Loong, who maintains friendly relations with China, was the most direct in describing the damage to the summit meeting by Mr. Obama’s absence. “No other country can replace” the American engagement in Asia, he said. “Not China, not Japan, not any other power. That is something which we continue and encourage at every opportunity.”
President Bill Clinton canceled a trip to the group’s summit meeting in Japan in 1995, and was able to recover American prestige in the region, officials said. But the far greater competition for influence between the United States and China and the dynamic economies of Asia make the region far more important to Washington now.
On the sidelines of the summit meeting, Mr. Kerry met with the Russian foreign minister, Sergey V. Lavrov, and the two diplomats expressed satisfaction with the progress of the destruction of chemical weapons in Syria by international disarmament inspectors. The first weapons, including missile warheads, were destroyed Sunday, Mr. Kerry said.
“It is a good beginning, and we should welcome a good beginning,” he said. The secretary also praised the cooperation of Russia and the compliance of Syria in the process.
The two diplomats said they would push for a November start for a Geneva conference to reach a political settlement in Syria under the auspices of the United Nations.
In opening remarks to the leaders at the summit meeting, President Susilo Bambang Yudhoyono of Indonesia, the host nation, said the group was even more important today because its 21 member economies continued to “feel the pain” of the global economic crisis.
“In view of the difficult global economic situation these days, it becomes even more critical for all of us to work together in maintaining regional resilience,” he said. “With this resilience, the APEC region will remain an important engine of global growth.”
“In view of the difficult global economic situation these days, it becomes even more critical for all of us to work together in maintaining regional resilience,” he said. “With this resilience, the APEC region will remain an important engine of global growth.”
Mr. Yudhoyono, citing International Monetary Fund data, said Sunday that the economies in the group would grow by 6.3 percent this year and 6.6 percent in 2014.
A report released on Monday by the World Bank said that countries with developing economies in East Asia and the Pacific, some of which are members of the group, were expanding at a slower pace as China shifted from export-driven growth and focused on domestic demand. Growth in larger middle-income countries, including Indonesia, Malaysia and Thailand, is also softening because of lower investment and global commodity prices, as well as lower-than-expected export growth, the report said.
A report released Monday by the World Bank, however, said that developing economies in East Asia and the Pacific, some of which are members of the group, were expanding at a slower pace as China shifted from export-driven growth and focused on domestic demand. According to the report, the growth forecast for the region’s developing countries is 7.1 percent for this year and 7.2 percent for 2014, a slight downward projection from April.
Mr. Obama had planned to use personal persuasion to push forward negotiations for the Trans-Pacific Partnership, a trade bloc that is led by the United States and that excludes China.
Growth in larger middle-income countries, including Indonesia, Malaysia and Thailand, is also softening because of lower investment and global commodity prices, as well as lower-than-expected export growth, the report said. The only exception is the Philippines, where growth accelerated in 2013, said Bert Hofman, the World Bank’s chief economist for East Asia and the Pacific.
The administration has set the end of the year as the goal to finish the complex negotiations that cover all economic sectors from intellectual property to agriculture to automobiles and aim to bring regional economic integration through trade and investment liberalization.
“It’s always a bit of a pity if you slow down, but we see a pickup next year on the premise that the global economy will do better,” Mr. Hofman said. “Seven percent growth for the whole region, excluding China, that’s a very decent growth rate. The East Asia and Pacific region still contributes a lot to world growth.”
The job of lobbying for the deadline was left to the United States trade representative, Michael Froman, who said in an interview that it was an “ambitious but doable” goal. The administration was hoping that President Park Geun-hye of South Korea would announce at the meeting that Seoul was ready to join the negotiations. But South Korean officials said Ms. Park would not make that declaration in Bali.
One of the most important aspects of the summit meeting is the private discussions between leaders on the sidelines of the main gathering.
The prime minister of Malaysia, Najib Razak, put another damper on the trade pact, saying it was unlikely that his country would meet the American deadline. “We do have a few areas of great concern,” he said.
The Australian leader, Tony Abbott, met with Mr. Xi on Sunday night for the first time since becoming prime minister in September. On Monday, he said he hoped a free-trade agreement between Australia and China would be completed within 12 months.
The pact would be presented to the Malaysian Parliament for approval, he said, where members have complained that the opening of the economy demanded by the trade accord would have a negative impact. “The timetable was desirable that we try to conclude it by the end of the year, but is not cast in stone,” he said.
Mr. Abbott said he planned to lead a large government and business delegation to China within the first six months of 2014, at the invitation of Mr. Xi. “The prosperity of every country in the region, including Australia, critically depends on trade and investment,” he said. “Our recent prosperity critically depends on the massive expansion of resource exports to countries in our region, particularly to China, and we want that to continue and not slow down.”
Mr. Obama’s absence was particularly damaging to American interests here in Indonesia, where the growing economy has been bolstered by a stronger Chinese presence that until a few years ago was resisted, said John Kurtz, the head of the Asia Pacific region for A. T. Kearney, a global management consulting firm.
Mr. Abbott had planned to meet with Mr. Obama as well. The Australian leader said it was “a disappointment” that Mr. Obama had canceled his trip, but said it was understandable given the political deadlock in Washington. He said the president’s absence would not undermine the American “pivot” strategy in Asia.
Mr. Xi visited Indonesia last week and announced that China would open a $50 billion infrastructure bank to service the region.
“I fully understand the most constructive way America can engage with the world depends upon America being as strong as it can be at home,” Mr. Abbott said. “I don’t think anyone here holds it against the president that he has very important business at home, and it is certainly in no way inconsistent with the pivot in Asia.”
“Indonesia’s ethnic Chinese business giants have drawn closer to China and have benefited greatly with that,” said Mr. Kurtz, an American who lives in Jakarta. “They have begun to reshape the views of the government.”
Negotiations between China and Australia were described last week as “stalled” by the Australian minister for trade and investment, Andrew Robb.
Indonesian businessmen feel “China’s effective economic support was unmatched by the United States,” Mr. Kurtz said. “There is a feeling that soft power loses to hard currency most of the time.”
Indeed some prominent Indonesians had joked after Mr. Obama decided not to attend that the United States was “playing checkers while the Chinese play chess,” he said.
But other leaders affirmed the regional importance of the United States. “No other country can replace the American engagement in Asia,” said the prime minister of Singapore, Lee Hsien Loong, whose father, Lee Kuan Yew, specialized in balancing China and the United States when he was prime minister. “Not China, not Japan, not any other power. That is something which we continue and encourage at every opportunity.”
On the sidelines of the summit meeting, Mr. Kerry met with the Russian foreign minister, Sergey V. Lavrov, and the two diplomats expressed satisfaction with the progress of the destruction of chemical weapons in Syria by international disarmament inspectors.
The first weapons, including missile warheads, were destroyed on Sunday, Mr. Kerry said.
“It is a good beginning, and we should welcome a good beginning,” he said. The secretary also praised the cooperation of Russia and the compliance of Syria in the process.
