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leader of 21 Asian And Pacific Rim The nations were set to open their annual summit on Friday to discuss how to boost economic cooperation and tackle shared challenges, a day after the president donald trump and Chinese President Xi Jinping Agreed to take steps to reduce their escalating trade war.
Thursday’s Trump-Xi meeting has cast a heavy shadow over the two-day Asia-Pacific Economic Cooperation summit to be held this year in Gyeongju city of South Korea. Trump described the meeting as extremely successful, saying he would cut tariffs on China, while Beijing agreed to allow exports of rare earth elements and begin buying American soybeans.
Their deals were a relief to the world economy, as experts had previously warned that failure to ease trade tensions between the world’s two largest economies would surely deepen global economic uncertainties.
Established in 1989 during a period of increasing globalization, APEC represents more than half of global trade. The forum supports free and open trade and investment to accelerate regional economic integration and has also been credited with bringing countries locked in competition together to work together on common initiatives without binding statements.
The APEC region now faces challenges such as strategic competition between the US and China, supply chain vulnerabilities, growing population and the impact of AI on jobs. Trump’s tariff hikes and “America first” agenda have roiled markets and threatened decades of globalization and multinationalism, causing U.S. strategy to recently shift to economic competitions with China rather than cooperation.
“The global free trade system is facing various challenges. We hope that APEC, which is being held in South Korea for the first time in 20 years, will provide an opportunity for leaders to candidly discuss and exchange views on the future of APEC,” South Korean Foreign Minister Cho Hyun told reporters on Thursday.
Trump left South Korea after meeting with the Chinese president, and international media attention is now on Xi, whose government has portrayed itself as a defender of free trade and an alternative to US protectionism.
It is Xi’s first visit to South Korea in 11 years, and he is scheduled to meet separately on Friday with South Korean President Lee Jae-Myung and new Japanese Prime Minister Sanae Takachi.
Despite Trump’s optimism after his 100-minute meeting with Xi, the potential remains for major tensions between the countries, both of which want dominant positions in manufacturing and the development of emerging technologies such as artificial intelligence.
“This is certainly a contribution in bringing the leaders of the two largest economies together for a meeting where they agreed to withdraw their most extreme tariffs and export control threats. As a result, the worst-case scenario for global trade was averted,” said Leif-Eric Easley, a professor of international studies at Ewha Womans University in Seoul.
“However, APEC is about much more than a venue for a trade ceasefire,” Easley said. “Major multilateral efforts are needed to address the region’s most pressing economic challenges, including opposing costly and unsustainable protectionism, harmonizing rules for sustainable trade, and coordinating standards for digital innovation.”
South Korean officials said they are communicating with other countries to push all 21 members to adopt a joint statement at the end of the summit so as not to repeat the failure to issue one in Papua New Guinea in 2018 due to the US-China squabble over trade.
South Korean Foreign Minister Cho Hyun said last week that it would not be possible to issue a joint statement strongly supporting free trade because of differing stances among APEC members. Instead he hoped for a comprehensive declaration emphasizing peace and prosperity in the region.
As the host nation, South Korea prioritized discussing AI collaboration and demographic challenges such as aging population and low birth rates under the theme “Building a Sustainable Tomorrow: Connect, Innovate, Prosper”. South Korean officials say APEC members will share exemplary cases of responses to AI and demographic issues, explore common steps and formulate new development strategies during this week’s summit.