There is an African proverb that says, when elephants fight, it is the grass that suffers. That is what we see today with the United States and China clashing over trade practices and freedom of navigation in disputed territories in the West Philippine Sea. And the particular blades of grass in peril may be APEC (Asia Pacific Economic Cooperation) and the Philippine interests attached to it.
The clash was on display at the recent APEC leaders’ summit hosted by Papua New Guinea. US President Donald Trump was absent, but his vice president was there to convey America’s discontent with China over trade. Even before that summit, tension has been rising in the region as US warships repeatedly challenged China’s presence, with its own ships shadowing American vessels passing through the disputed areas.
As a result, APEC member economies are pulled toward opposing sides by their alliances, sovereignty claims, security and economic interests. Some are drawn to China, with promises of aid and investments through its Belt and Road initiative. The US and other countries critical of China are drawing states to the opposite side, warning them of a so-called debt trap. In recent years, the push and pull to one side or the other has been escalating.
We hope that the US and China will be friendlier with each other again, and that they avoid the Thucydides Trap. That is a phrase coined by a Harvard professor and political scientist describing how an ascending power unsettles an established power to a point where they go to war against each other. The reference to the Greek historian Thucydides recalls how war broke out between Athens and Sparta, a story replayed time and again since then but with different states elsewhere in the world.
For our sake, make it hold
As the diplomatic and trade row worsens between China and the US, APEC may not survive. That would be unfortunate for the Philippines, which needs every bit of help to boost its exports.
Granted, APEC was weak from its inception. After 27 years of existence, critics of APEC still belittle it as a photo opportunity for some world leaders. When the Philippines hosted the forum before PNG did, many were wondering what we got out of it besides publicity and a spruced up Metro Manila. Even the name of the forum has not been spared, as some jokingly define APEC as four adjectives in search of a noun.
Naturally, APEC itself lists its numerous and substantial achievements over the years. Note that it is a forum designed to facilitate the exchange of goods and services among Asia-Pacific economies. And in that regard, APEC boasts trade among its 21 members has increased 6.7 times to $20 trillion between 1989 and 2015 alone. Over the same period, global trade grew slower by 5.6 times. Due to the fact APEC facilitates trade and economic growth in the region, trade transactions costs are lessened.
Between 2007 and 2010, according to APEC, those costs diminished by 5 percent, saving the trading partners $5.6 billion. APEC goes on further to list more accomplishments on its website.
Some may argue that the benefits to the Philippines are a fraction of that which was reported. We import far more than we export. In fact, weak exports have been a drag on our GDP growth, according to the central bank. For now, consumption accounts for about 70 percent of the total economy. And as public spending ramps up, foreign investments are also rising.
Filipinos need APEC precisely because our exports are weak. To enhance our growth potential, we need to take advantage of every opportunity, bilateral and multilateral, to be able to sell our goods and services. If APEC goes, so do opportunities for the Philippines.
We can only hope that our leaders can craft policies that serve our interests and do what they can to preserve peace and promote cooperation between China and the US. Unless that is achieved, APEC, along with the Philippines, will be the “grass” that gets trampled by the proverbial elephants.