Rendi A. Witular, The Jakarta Post, September 08 2012, 12:43 PM
Tension over territorial disputes and rising protectionism have cast a rather gloomy shadow over the gathering of leaders of 21 Asia-Pacific Economic Cooperation (APEC) members. These nations account for 54 percent of world economic output and 44 percent of trade.
China is throwing its weight around in the South China Sea dispute, provoking invective from Vietnam and the Philippines, and continues sabre-rattling at Japan for its plans to buy disputed islands in the East China Sea, near oil and gas reserves.
Japan is embroiled in further disputes with South Korea over more rocky islets, and with APEC host Russia over the Southern Kuriles — an archipelago seized from Japan by the former Soviet Union at the end of World War II.
Despite the tension, APEC leaders will flock to the annual summit on Saturday and Sunday on Russky Island, off Vladivostok, Russia’s most eastern city near South Korea, Japan and China.
Russian Federation Foreign Minister Sergey Lavrov believes these tensions will not hinder the already strong economic cooperation between APEC members.
“APEC is built on solid foundations,” said Lavrov on Thursday.
“Considerable progress has been made by member economies in advancing their 2012 agendas.”
Lavrov’s optimism seems to have some relevance in the real world.
Chinese President Hu Jintao, Japanese Prime Minister Yoshihiko Noda and South Korean President Lee Myung-bak arrived on Thursday and Friday.
It remains unclear, however, whether there will be any opportunity for the leaders to meet.
US President Barack Obama has skipped the summit as he prepares for the upcoming presidential election. Secretary of State Hillary Clinton is representing the US.
President Susilo Bambang Yu-dhoyono, with his entourage of more than 200, arrived on Friday afternoon with scores of agendas in hands, including plans for bilateral meetings with China, Russia, Mexico, Peru and Chile. He is also due to talk at the prestigious APEC CEO Summit, and meet with a dozen noted Russian businessmen.
Indonesia’s participation this year, however, has been marred by growing allegations of protectionism from fellow APEC members, particularly over the country’s recent policies to ascend the value chain.
“There have been some discussions over protectionism issues, and the need to address them,” said Trade Ministry’s director general of international trade cooperation Iman Pambagyo.
“According to a presentation by the World Trade Organization, the trend of protectionism has increased over the years,” he said.
Indonesia has fallen victim to protectionism measures by several APEC members. The US, for example, has been putting environmental barriers against Indonesia’s crude palm oil (CPO).
“Our CPO market is worth around US$8 billion in the US, annually. We have proposed that the US lift the environmental concerns over our CPO so that other developed nations will follow suit,” said Trade Minister Gita Wirjawan.
Several developed APEC members, particularly Japan, have recently criticized Indonesia’s stance on capping raw mining exports, alleging such measure to be protectionist.
Indonesia claims its policy is actually aimed at encouraging local and foreign companies to process commodities internally by setting up processing facilities and thereby creating jobs.
A joint statement released after the APEC ministerial meeting on Thursday emphasized the need to resolve the protectionism issue.
“We note with concern the International Monetary Fund’s downward projection for global economic growth for this and next year and the rise in protectionist instances around the world. These developments increase the urgency for further action to keep markets open.”
APEC, set up in 1989 in response to growing interdependence of Asia-Pacific economies, brings together economies surrounding the Pacific Ocean — from China, Southeast Asia, Australia to Chile via the US. Its core mission is to reduce tariffs and other trade barriers among members.
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