APEC’s challenging 2022

The start of 2022 held much promise for APEC economies. The Covid-19 pandemic seemed under control. As the 2022 APEC host, Thailand anticipated a full year of in-person meetings to focus the region’s attention on deepening inclusive and sustainable economic growth.

All bets were off after 24 February when Russia—an APEC member—launched a military assault on Ukraine. Whether it is called an ‘invasion’ or a ‘special military operation’, a geopolitical conflict involving an APEC member is tough on everyone.

Thailand had to recalibrate to ensure that the group stayed focused while managing the fallout from the Ukraine war. The Thai model of managing conflict in an international grouping while simultaneously eking out consensus could provide a template for ensuing meetings in 2023. It may be particularly relevant for the United States as it tries to balance its opposition to the Ukraine conflict with its obligations as host of APEC 2023.

This is what was supposed to happen in 2022—APEC provides a platform to build trust, facilitate difficult conversations and make headway on matters of collective importance, such as structural reform, trade and investment, and climate change.

Yet what actually happened, during the first meeting of the APEC trade ministers in May 2022, was that representatives from the United States, Japan, Canada, Australia and New Zealand walked out to express their displeasure with the Russia–Ukraine war. What grabbed the headlines was not the consensus achieved on collaborating on sustainable and inclusive growth, but the walk-out.

Away from the public eye, APEC 2022 was not all about geopolitics and trade tensions.

While trade and investment has always been central to the grouping’s work, much has changed since the idea of the ‘free-trade area of the Asia–Pacific’ was first mooted in 2005. Covid-19, climate change, digitalisation and concerns over workers’ rights and competition policy—the so-called next generation trade and investment issues—have taught the region that trade and investment agreements must go beyond ‘traditional’ market access concerns.

Thailand pulled through, successfully pushing APEC to put these concerns on the table. This was an important step given the grouping’s aims to be the testbed for free-trade agreements of the future.

Another imperative that APEC had to navigate throughout the pandemic was the safe resumption of travel. It first had to ensure the movement of essential workers, which was closely followed by getting businesses going again.

In January 2022, APEC kickstarted the process by establishing the Safe Passage Task Force to coordinate safe and seamless cross-border travel within the region as it emerged from the pandemic. This covered essential workers, including air and maritime crew, as well as the interoperability of vaccination certificates and making the APEC Business Travel Card—a card issued to businesspeople and senior government officials to allow easy, short-term travel within the region—accessible to more people.

APEC is a voluntary, non-binding forum. It is not the main regional platform for dealing with environmental issues. But the members recognise that there cannot be meaningful discussions on inclusive and sustainable growth without addressing the challenge of climate change and the increasingly frequent extreme weather fluctuations and natural disasters arising from it. APEC members were able to build consensus on meeting commitments to phase out inefficient fossil fuel subsidies. They also implemented measures to deal with illegal, unreported and unregulated fishing and marine debris.

Thailand completed its 2022 work by getting APEC members to adopt the Bangkok Goals for a bio-circular-green economic model. This is a comprehensive framework that includes measures to encourage businesses to adopt greener business models—sealing APEC’s commitment towards sustainable economic growth.

Despite a challenging year, the Thai-led initiatives are important achievements for APEC. They reflect collaboration, flexibility and a collective realisation that working for the greater good remains relevant. These are the values that the grouping must continue to uphold given that 2023 is expected to be another tough year for global economic development. As APEC 2023 host, the US will helm the group through the challenges and focus attention on the economic wellbeing of the region.