Obama's Missing Asia-Pacific Summit Might Not Matter
Washington's government shutdown forced President Barack Obama to miss the recent Asia-Pacific Economic Cooperation (APEC) summit. But even if this was cited as yet another harmful consequence of the sorry state of U.S. domestic politics, it may paradoxically wind up helping America exert its influence in the long run in Asia-Pacific regional affairs.
At an Oct. 5 press conference at the annual APEC summit, U.S. Secretary of State, John Kerry, was caught in a bit of a bind. On the one hand, he had to explain why it was essential that Obama stayed home, while nevertheless trying to convince everybody there was no drop in America's commitment to the region.
Still, one has to look at Obama's absence from the economic bloc's summit from a more practical perspective to gain the necessary clarity.
First, the incident was indeed so serious that Obama was obliged to stay home, as the standoff between Democrats and Republicans risked leading to a historically long shutdown. Worst of all, if the debt ceiling is not raised it will result in the United States defaulting on its debts.
It is therefore President Obama's responsibility to work with the Congress and end the political paralysis so as to find a solution once and for all, and even put forward electoral reform.
But more crucially from the point of view of APEC and regional economic policy, Obama simply needs to be capable of keeping his word. Whether it's about past bilateral free trade agreements with South Korea, Colombia or Panama, or current governance reform programs with the International Monetary Fund, this is not the first time American external policy gets stuck in the House of Representatives.
So policymakers in Asia are now waiting to see if the President will be able to turn the situation around and use it as an opportunity to solve longstanding diplomatic and economic problems.
A new star
There can never be too many multilateral trade and economic cooperation agreements. A multilateral trade and economic cooperation is not a zero-sum game. As long as it contributes to facilitate investment and trade as well as economic growth, various mechanisms and forms should all be welcome.
It's normal that each potential signatory to a trade deal attaches great importance to who else might be signing on. If China supported, and even joined, the Trans-Pacific Trade Partnership (TPP), perhaps it will also help push other major countries in accepting China's promotion of an infrastructure investment bank.
According to the estimates of the Asian Development Bank, from 2010 to 2020 Asian countries will need a total infrastructure investment of more than $8 trillion across the region. Even just building a railway from Kunming City in China to Vientiane in Laos requires more than $6 billion, more or less the equivalent of the entire GDP of Laos.
President Xi Jinping raised the idea of setting up an infrastructure investment bank on his visit to Malaysia prior to the participation of the APEC summit. It may well be more in line with the needs of Asia's economic development while at the same time meeting the region's need to improve the "supply side" that Kerry had focused on.
During the summit, the media took the angle that Obama's absence above all had the effect of making Xi Jinping the singular star of the forum. And indeed the Chinese President's speech was seen as the climax of the event.
Certain Asian nations refer to an approach of pure pragmatism, where they look to China for its economy and to America for security and diplomacy. Still, there should be new ways of looking at both countries, and their relationship with each other and the rest of the region.
The United States, once it cleans up its domestic mess, should return as soon as possible to the core of Asian-Pacific policy making, ready to seal a TPP agreement that covers the widest range of countries and regions to have the most profound impact possible.