Peru hosts APEC
13 November 2016
Lima this week (14-20 November) plays host to the Asia-Pacific Economic Cooperation (APEC) summit. The meeting is, of course, of great significance to the Peruvian government’s attempts to get closer to the Asian economies, both as a trade partner and as the recipient of Asian investment. Officials in the Kuczynski administration keenly wait to see what sort of deals emerge.
One deal, or rather mega-deal, that looks unlikely to emerge is the Trans-Pacific Partnership (TPP). Its prospects look to have been fatally skewered by the Trump victory in the US presidential election. Even before the election, it looked in danger since both Trump and Hillary Clinton had expressed their strong misgivings.
Peru’s eagerness to sign up to the TPP, notwithstanding its negative impacts on parts of the economy, now contrasts with the deeply sceptical mood in Washington. The TPP deal, which needed ratification by the legislatures of all ten would-be members, now seems doomed to fail in the US Congress. It formed part of the Obama administration’s plan to consolidate a trading community in Asia that specifically excluded China.
President Xi Jinping will thus arrive at the Lima summit keen to reap maximum advantage from the ruins of TPP. The Chinese leader has been seeking to promote a rival to TPP, an Asia-wide trade area that will help consolidate China’s position at the heart of regional trade relationships. Li Bao-dong, its deputy foreign minister has already stated that the plan is to fill the void left by US disavowal of TPP.
As well as Peru, the TPP was to include other Latin American members of APEC, namely Chile and Mexico which, along with Colombia, make up the Pacific Alliance. President Kuczynski has expressed his solidarity with Mexico in opposition to Trump’s announced plan to build a wall along the US-Mexican border. “We will oppose Trump’s wall by all possible means”, Kuczynski is quoted as saying. In this context, as Mirko Lauer argues, Peru looks likely to tighten its embrace of China at the expense of its traditional ties to Washington.