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Trade war

APEC chair statement underlines US-China divisions

Fight against 'protectionism' removed from document released five days after summit

APEC leaders including, from left, China's Xi Jinping, Papua New Guinean host Peter O'Neill, Japan's Shinzo Abe and U.S. Vice President Mike Pence pose in Port Moresby on Nov. 18.   © AP

TOKYO -- Details of the U.S.-China divide emerged Friday, as a statement released by the summit chair of the Asia-Pacific economies showed evidence of a fight between the world's two largest economies over how it should be worded.

The 21-member Asia-Pacific Economic Cooperation, which held a summit of leaders on Sunday in Papua New Guinea, failed to issue a joint communique for the first time in its near three-decade history after Washington and Beijing were unable to agree on key parts of the draft.

Members gave up on issuing a communique and instead settled on a chair's statement by Papua New Guinea's Prime Minister Peter O'Neill, who said "a small number [of members] had alternative or additional views" on certain parts of the document.

The phrase "fight against all forms of protectionism" was included in a draft of the statement seen by the Nikkei Asian Review, but was deleted from the one ultimately issued by the chair. China pushed for a "detailed discussion" on protectionism in the drafting process, but the U.S. countered by highlighting the need for "fair and reciprocal" trade, according to an official involved in the talks.

"We further urge economies to advance trade in the region in a free, fair, and open manner," the chair statement read, "in a way that will support non-discriminatory, and mutually advantageous trade and investment frameworks."

The chair statement also noted that members "recognize the contributions that the multilateral trading system has made" in achieving economic growth, a toned-down phrase from the "support" for multilateral trade outlined in the draft. The U.S., which had been seeking bilateral trade deals instead of multi-player trade pacts, sought the omission of the phrase "multilateral trading system" during ministerial level talks, the official said.

The statement indicates the deep divide between the two largest economies. Chinese President Xi Jinping and U.S. President Donald Trump are scheduled to meet later this month at the G20 summit in Argentina. Some observers say hopes for a truce between the two leaders, with the aim of easing the escalating trade tensions that have rocked global financial markets in recent months, is slim.

"It will be a very substantial achievement if the G20 meeting results in some sort of understanding between [the] U.S. and China in not further escalating the trade war," said Amitendu Palit, senior research fellow at the National University of Singapore's Institute of South Asian Studies. "That's the best that the G20 can hope [for]."

Even after the APEC summit ended, the two sides indirectly pointed fingers at each other for holding back the summit from reaching a consensus.

"The United States was proud and fully prepared to join consensus on the draft APEC statements, agreeing to promote free and fair trade in the region and to combat unfair trade practices," the U.S. State Department said in a statement on November 19. "It is unfortunate that not all economies -- despite their rhetoric -- could support these positions."

Meanwhile, according to a statement posted on the website of China's foreign ministry, Foreign Minister Wang Yi said: "It is mainly that individual economies insisted on imposing their own texts on other parties, excusing protectionism and unilateralism, and not accepting reasonable revisions proposed by China and other parties."

"This practice has caused dissatisfaction among many economies, including China, and it is obviously not in line with the consensus principle adhered to by APEC," Wang added.

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