Covid-19 a silver lining for greater Apec cooperation

For the first time ever, Malaysia hosted the fully virtual Apec Economic Leaders’ Meeting (AELM) on Friday night. - ApecFor the first time ever, Malaysia hosted the fully virtual Apec Economic Leaders’ Meeting (AELM) on Friday night. – Apec

KUALA LUMPUR: COVID-19 has presented a silver lining for greater cooperation among Asia Pacific Economic Cooperation (Apec) economies, despite the disastrous health and economic impacts brought by the pandemic.

All Apec’s 21 economic leaders including outgoing US president Donald Trump and his Chinese counterpart Xi Jinping have come together despite the underlying tension between the two superpowers that account for about 60 per cent of global gross domestic product (GDP).

For the first time ever, Malaysia hosted the fully virtual Apec Economic Leaders’ Meeting (AELM) on Friday night.

The AELM was preceded by the Apec Ministerial Meeting (AMM) on November 16 as members had collectively agreed to enhance trade and investment within the bloc.

Chairing the AELM, Prime Minister Tan Sri Muhyiddin Yassin said Apec members had benefited considerably from the regional forum with gains spanning across trade, investment, facilitation, as well as economic and technical cooperation.

“The COVID-19 pandemic has had a lasting impact on the way we view trade and economic priorities within Apec. Today, as we work together as a region to mitigate the impact of COVID-19, the relevance of Apec has become even more pronounced.

“As we pursue regional solutions that help us to strike a delicate balance between our health priorities and economic needs, we are reminded not of our divergences, but our similarities; and of the fundamental fact that, even in calamity, humanity will find a way,” he said in his opening remarks.

During the meeting, the Apec economic leaders exchanged views on the current state of the global economy and their initiatives in combating the health crisis, while discussing matters related to regional issues including the bloc’s responses in mitigating the health and economic impact of COVID-19.

Muhyiddin urged Apec economies to unite in combating COVID-19, as it was of the utmost importance that people globally have access to the vaccines and health technologies on an affordable, accessible, and equitable basis.

“Apec assumes a central role in spearheading post-pandemic economic recovery. We need to trade and invest our way out of the current economic downturn. We must come together and work constructively towards navigating the region along a path of robust, inclusive, and sustainable economic recovery and growth,” he said.

Apec leaders reached common ground on the 2020 Kuala Lumpur Declaration, the first in two years since the Da Nang Declaration at the 25th AELM in Vietnam.

This was after the Papua New Guinea summit in 2018 and the 2019 gathering in Chile, which had failed to produce a declaration due to US-China tensions and the cancellation over public protest, respectively.

The KL declaration was a reflection of Apec’s aspiration for the present and immediate future of the region.

While it takes into consideration current global challenges, the declaration was also forward-looking and ambitious to drive economic recovery, spur growth in the region, and bring greater prosperity to be shared among the people of Asia Pacific.

“This goes well with Malaysia’s efforts to champion the new global economic architecture which takes into account economic progress beyond GDP. As host of Apec 2020, Malaysia brings prominence to human aspects of economic development and growth, often taken lightly, such as wellbeing and living standards of the people,” said Muhyiddin.

In the declaration, Apec leaders vowed to enable the Asia Pacific region to recover from the pandemic.

Leaders were committed to protecting their people’s lives and safeguarding their health while navigating the region towards recovery along the path of strong, balanced, inclusive, sustainable, innovative, and secure economic growth.

Leaders also agreed to align their efforts along with the priorities of improving the narrative of trade and investment; inclusive economic participation through digital economy and technology; and driving innovative sustainability.

Meanwhile, Apec has launched “Apec Putrajaya Vision 2040″, replacing the 1994 Bogor Goals.

The new vision is Apec’s new long-term blueprint for future cooperation.

It was named after Malaysia’s administration centre of Putrajaya, envisioning an open, dynamic, resilient, and peaceful Asia-Pacific community by 2040, for the prosperity of all the people and future generations.

“The vision offers the way forward for Apec beyond 2020, considering the maturity of the Bogor Goals this year since its inception in 1994.

“As the host of Apec 2020, Malaysia has been entrusted to lead the process of drafting the region’s Post-2020 Vision. We have worked for months and collaboratively with all Apec economies in our capacity as the main architect of this crucial document, which is expected to become the primary reference document for the region in years to come,” said Muhyiddin.

Apec economies have also pledged to remain committed to its mission and voluntary, non-binding and consensus-building principles in achieving the renewed vision by pursuing the three economic drivers namely trade and investment; innovation and digitalisation; and strong, balanced, secure, sustainable, and inclusive growth.

Apec leaders recently agreed to facilitate the movement of essential goods and services as well as the people within the bloc, without compromising efforts to contain the virus spread.

The reciprocal decision was jointly concluded by 21 Apec economies during the 31st AMM on November 16, emphasising their commitment to a free, open, fair, non-discriminatory, transparent, and predictable trade and investment environment to drive economic recovery.

International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali said the facilitation particularly allowed essential goods to move across borders without being subjected to unfair trade measures as well as expedite the economic recovery within Apec.

“Additionally, this declaration will certainly continue to enhance a more conducive environment for trade and investment flows of activities among the Apec economies by ensuring an open, vibrant, transparent and sustainable trading system,” he said at a virtual press conference after chairing the meeting.

Apec members concurred that emergency trade measures designed to address COVID-19 should be targeted, proportionate, transparent, temporary, while not creating unnecessary barriers to trade inline with the World Trade Organisation (WTO) rules.

Muhyiddin said COVID-19 had hit all economies adversely, with much of the world coming to a standstill, impacting on health safety and has taken its toll on the economy.

“With the Apec region being home to 2.9 billion people, representing 60 per cent of global GDP and contributing almost 50 per cent of world trade, the impact of the pandemic has borne significant proportions,” he said in a virtual press conference after chairing the AELM .

He said the regional growth was expected to decline 2.7 per cent this year against the 3.6 per cent growth in 2019. This translated to an estimated output loss of US$2.1 trillion due to economic fallout, compounded by an additional 23 million people becoming unemployed in 2020.

“As an immediate response, Apec economies have devised exceptional fiscal and monetary measures, representing one to 20 per cent of the GDP, depending on the fiscal room.

“The measures are targeted at bolstering health systems and providing direct support to households and businesses, including micro, small and medium enterprises. These are done through wage subsidies and payroll support, tax deferrals and tax relief, regulatory forbearance, and debt payment deferments as well as soft loans and loan moratorium,” said Muhyiddin.

He said perhaps the most interesting opportunity arising from the pandemic crisis was the rise of the digital economy.  “We have seen how innovation from digitalisation has served where households and businesses around the region have turned to technology to help function efficiently daily.”

On a larger scale, he said digital tools had helped in the surveillance of COVID-19, in contact tracing and in tracking trends and developments related to the virus.

“Apec will drive its members to share the best practices to harness the opportunities of the digital economy and foster an enabling environment to facilitate the flow of data and strengthen consumer and business trust in digital transactions,” he said.

Meanwhile, all Apec leaders have pledged their commitments to collaborate and support each other for equitable access to the COVID-19 vaccine.

Muhyiddin said it would be an important call for action on the “Declaration on Facilitating the Movement of Essential Goods in Apec” pioneered by Malaysia.

“This declaration seeks to ensure that essential goods can move across borders without being subjected to unfair trade measures. It also will lead to a more conducive trade and investment flows among the Apec Economies through open, vibrant, transparent and sustainable trading systems,” he added.

This year, Malaysia hosted Apec for the second time after 1998, and it was the first time a conference of such scale had been done virtually.

Malaysia also made history as the first economy to fully organise Apec with the Ministry of International Trade and Industry acting as the Apec 2020 National Secretariat

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