Apec is important as it brings leaders, ministers and officials from jurisdictions in and around the Pacific Ocean together on an annual basis.
In some cases, these meetings occur several times in a year.
These meetings allow the topics on Apec's direct agenda to be progressed and for a whole host of bilateral, plurilateral and multilateral issues to be advanced. Many of New Zealand's free trade agreements were launched on the back of engagement begun in the margins of Apec meetings.
Over the years Apec has been helpful in advancing the agenda of the World Trade Organsiation (WTO).
The strong push from Apec economies was helpful in achieving the launch of the WTO Doha Development Agenda in 2001. It was less helpful in bringing those negotiations to a successful conclusion.
The WTO is currently in crisis. The Doha Round has never been concluded and the organisation seems to have lost the ability to negotiate meaningful global level agreements.
The Dispute Settlement function has been negatively impacted by the decisions of the Obama and Trump administrations to not allow appointments or reappointments to the Appellate Body. This has encouraged larger players to act as though they have impunity when they flout WTO rules or ignore commitments. The United States did this regularly under President Trump and we can see examples of this with the way in which China is treating certain imports from Australia.
Things are so bad that there are media reports suggesting that the newly appointed WTO Director-General is threatening to resign. Something has to be done, and done fast, to restore the WTO's credibility. For New Zealand, and other medium sized trading economies, this is doubly important as without political and military heft, we rely on the multilateral rules based system to protect our trade to those parts of the world where we don't have free trade agreements.
Fortunately, there is an early opportunity for some restoration of credibility for the WTO.
There is a Ministerial meeting of WTO members being held this year from 30 November to 3 December.
Some are hopeful that this meeting might agree to disciplines on subsidies to the fisheries sector (incidentally this is an issue that first made it to the Apec Agenda in 1997 and was "transferred" from Apec to the WTO in 2001). These subsidies are a direct cause of overfishing by some jurisdictions. This would be a major win for New Zealand and go some way to restoring the WTO's credibility.
Another issue that may be advanced is a waiver to intellectual property rules that might allow the production of Covid vaccines to be undertaken in developing countries. The Biden Administration is keen to pursue this issue so it might happen.
A third issue is the reform of the WTO Dispute Settlement system. This seems necessary to allow the restoration of the Appellate Body.
So when looking at the Apec Ministerial and Leaders' declarations this year I will be hoping to read strong language in support of the WTO and these three specific outcomes.
I will also look for some honesty about the seriousness of the crisis confronting the WTO. No one really wants to say this in public but the credibility of the entity has been seriously dented and if we are not careful the continuation of the organisation could be called into question. In private many influential trade policy voices are talking about the need to start again. Interestingly some see an expanded Comprehensive and Progressive Agreement on Trans Pacific Trade (CPTPP) as the nucleus of the new WTO. CPTPP, of course, began as a result of discussions begun in the margins of Apec meetings.
To maintain credibility the WTO also has to stop inflating the value of what it has achieved. Under the previous Director-General at a previous ministerial meeting the organisation agreed to some measures to facilitate trade.
My read of this agreement was that this was a "nice to have", but nothing earth-shattering. This did not stop the WTO from claiming that the agreement could reduce global trade costs by up to 14.3 per cent and see world trade grow by up to US$1 trillion a year. Clearly at the time this was a gross exaggeration.
I would love to see some serious trade economists do the "before and after numbers" to determine what the real impact has been.
Charles Finny is a partner at the government relations consultancy Saunders Unsworth. As a trade official he worked many years on Apec and on the GATT/World Trade Organisation. Finny was responsible for launching the China-New Zealand free trade agreement as New Zealand's lead negotiator on this project, before moving to the private sector. He was later contracted by the New Zealand government to lead the negotiation on the agreement between NZ and the Separate Customs Union of Taiwan, Penghu, Kinmen and Matusu.
● Charles Finny is a partner at the Government Relations Consultancy Saunders Unsworth. As a trade official he worked many years on APEC and on the GATT/WTO.