Five Crucial Reasons Why APEC 2017 Will Be Watched Closely

The 2017 Asia-Pacific Economic Cooperation (APEC) summit being held in Da Nang, Viet Nam, would culminate in talks and deliberation in the Economic Leaders Week, to be held from 6 to 11 November.

As part of this event, US President Donald Trump will address on 10 November the APEC CEO meeting, which is being held under the theme, ‘Creating New Dynamism, Fostering a Shared Future’. The Economic Leaders Week declaration will contain key action points and commitments made by the 21 economies, and will be one of the closely watched events of the summit.

Here are some of the crucial key highlights of the APEC summit 2017:

First, considering that the summit will bring together leaders, ministers, senior officials, and CEOs from economies that account for over 60 per cent of global trade and world’s gross domestic product (GDP), it is worth looking at policies and agreements that will push the inclusive growth agenda forward. Vietnam, as the 2017 host, has selected four priorities as the focus of this year’s meetings: promoting sustainable, innovative and inclusive growth; deepening regional economic integration; strengthening micro, small and medium enterprises’ competitiveness and innovation in the digital age; enhancing food security and sustainable agriculture in response to climate change.

Second, the distinguished fact about APEC as a premium economic forum is the cooperative process predominantly concerned with trade and economic issues. Under the leadership of former US president Obama, the Trans Pacific Partnership Agreement (TPPA) was finalised with 12 economies out of 21 APEC members, and the largest trade agreement in history was signed in February 2016. But, with change of guard at the highest level, trade inclination has undergone significant shift. Given Trump’s trade restrictive indications, his appearance at the summit will give us further indication of how he intends to position the US policy in Asia Pacific and the overall APEC rapport as well.

Third, it is interesting that apart from the APEC Leaders’ Week, there are multiple interactions and engagements on the side, mainly in the form of bilateral meetings among the attendees, to ensure certain level of consensus regarding ongoing concerns prior to the actual discussion.

Fourth, Indian economic programmes now rely on greater access to foreign markets, investment sources, and value chains to bolster manufacturing and create jobs at home. APEC’s efforts have focused on simplifying regulatory arrangements; reducing barriers to foreign trade and investment; and, cultivating a culture of economic openness, dialogue, and cooperation. APEC regularly discusses major global concerns such as food security; the environment; urban growth; market access; and efficient outcomes in trade, investment, value chains, and technology, all of which are important to India. Prime Minister Narendra Modi’s vision of India’s bright economic future and the policies to achieve it are very much in line with APEC’s goals and initiatives in last two decades. It is this reason why India’s membership to APEC is of paramount importance now.

Fifth, host of APEC 2011 summit, United States invited India to participate as an observer and submitted its request for membership. But, many obstacles are highlighted for India’s full accessibility to APEC. Dominant ones are arriving at a ‘consensus’ among the existing members on India’s membership. Many APEC members still remain sceptical on India’s value addition to the forum.

However, India has developed strong bilateral economic ties with most of the individual APEC countries. The Prime Minister aggressively pursued foreign entanglements and especially proactive dialogues during state visits or participation in various summits of Asia-pacific countries. He has visited 13 out of 21 APEC members since he took over as Prime Minister in 2014. His multiple visits were mostly to China, Japan, Russia, Singapore and US, the major members of APEC. The Prime Minister also visited other prominent APEC member countries like Australia, Canada, Malaysia, Mexico, South Korea, Thailand and Vietnam. It is believed that the US and Japan are best positioned to advocate on India’s behalf. These economies, along with China, Korea, Australia, and Vietnam, could be asked to provide necessary support and diplomatic resources to India’s cause. When India’s APEC membership talks became more vigorous in 2016, Chile had supported it.

Sixth, the relationship between India and Vietnam has been developing fast in recent years in all four areas of politics, economics, defence and culture. The two countries graduated their relationship to “comprehensive strategic partnership” in 2016 when Prime Minister Modi visited Ha Noi. India and Vietnam are both members of the Mekong–Ganga Cooperation, created to enhance close ties between India and nations of Southeast Asia and Regional Comprehensive Economic Partnership (RCEP) negotiation. Vietnam has supported India's bid to become a permanent member of the UN Security Council and join the APEC. This is once again a good opportunity for India to use its strong ties with Vietnam for its own diplomatic promotion.

Seventh, the present government under the formidable leadership of Prime Minister Modi, has strongly focused on FDI and better links with Global Value Chains (GVCs) to expand the manufacturing sector. The economies that are most integrated with GVCs are APEC members, with 10 of them having the highest GVC participation globally. India’s accession to APEC will be equally advantageous for the forum as it will have opportunities in post integration in the fastest and largest growing open economy. These facts have been highlighted by APEC Secretariat.

Despite all, not much ground has been gained on India’s candidature to Asia-Pacific Economic Cooperation (APEC) since 2016, and the strong sentiments towards it are waning without any official expression pertaining to it. Union Finance Minister Arun Jaitley during his 2016 state visit to US categorically stated India’s eagerness to join APEC. Jaitley’s statements were considered as a strong signal by many international organisations, especially trade facilitators that Indian government would seriously pursue membership in APEC. Time is ripe to hasten the diplomatic discourse and invest in resources that would eventually fructify into India’s membership to APEC as early as possible. As a host, Vietnam could be instrumental in seeing this through. Access to the prestigious APEC would weld the missing link in India’s Act East Policy.