US-China clash derails APEC summit outcome and increases regional tensions

November 20, 2018: At the Asia Pacific Economic Cooperation Forum (APEC) in Port Moresby last weekend US Vice President Mike Pence justified the US tariff war on China by criticising Chinese policies on  technology transfer, intellectual property and industrial subsidies, and accused China of drowning its Pacific Island aid partners in a sea of debt.

Chinese President Xi Jinping in turn urged a rules-based approach through the World Trade Organisation (WTO), said that intellectual property rules should not be as profit-making tools for a few, accused the US of  protectionism and unilateralism and urged cooperation rather than confrontation.

The ABC reported that other 19 APEC governments were frustrated because the US and China disagreement meant that for the first time there was no agreed leaders’ statement at the annual APEC meeting. PNG Prime Minister Peter O'Neill said the "entire world is worried" by these tensions.

There were also increased tensions in aid and military policy, with China, Australia and the US all announcing major projects to compete for influence in PNG and other Pacific countries, including the expansion of a joint PNG, US  and Australian naval base on Manus Island..

This escalation of both trade and military tensions reinforces AFTINET’s calls for an end to tariff wars and for fairer trade rules. Such rules should apply to all countries and potentially restrain the market domination of the most powerful players. The WTO in its current form is not playing this role. We need to change the trade rules to ensure that trade contributes to the peaceful achievement of human rights, labour rights and environmental sustainability.