For a week in November, an unusual cluster of globally significant economic summits will take place in the Asia-Pacific region: the annual Asia-Pacific Economic Cooperation meeting in Beijing (Nov. 10-11), the East Asia Summit and the Association of Southeast Asian Nations meeting in Naypyidaw, Myanmar (Nov. 11-12), and the G-20 meeting of the world's biggest economies in Brisbane, Australia (Nov. 15-16).
What the world will see is a flurry of large meetings, accompanied by bilateral and multilateral encounters, including an official visit by U.S. President Barack Obama to China, and probably a meeting between Chinese and Japanese leaders. This may be the highest concentration of diplomatic activity in years. But does it matter? Should we yawn, cheer or fear and what is at stake?
The short answer is the stakes are sky-high at a time when the global economic system and the Asia-Pacific security framework are in urgent need of innovation and cooperation. The string of summits and bilateral encounters will either generate confidence in the global economy and new agreements of widespread significance, or they will confirm global trade and development are increasingly seen as terrain for geopolitical competition. They could tilt the balance between global forces of integration and fragmentation. Early signs are not encouraging. If the leaders do not depart from a trend toward protectionism, and resolve security concerns, these summits may generate more uncertainty and risks for the world economy.
The global economic system may be plagued by further strategic competition, uncertainty and risk in 2015. As noted during the annual meetings of the International Monetary Fund and the World Bank in October, world economic growth is slowing, and the global institutions that sustain global trade and finance are slowly eroding.
Why summits matter
Five key trends stand out. First, amid slowing growth, the world economy is increasingly vulnerable to systemic risks. In its annual World Economic Outlook issued in October, the IMF lowered its predictions for world growth in 2014 to 3.3% (from 3.7% estimated early this year) and noted a rise in downside risks. Economic, political and social risks are increasing in Europe, Japan and in most emerging markets. Globally, the World Economic Forum's Annual Risk Report has also emphasized growing concerns over systemic risks, such as rising domestic inequality in different parts of the world, fiscal crises, environmental risks, cyber risks and pandemics. This is not a time for governance by autopilot.
Second, the World Trade Organization has stalled. Even the minimal Bali agreement between member countries over trade facilitation has faced an Indian veto. Instead of a universal trading regime, we are seeing the rise of competitive mega regional arrangements, such as the U.S.-led Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership pacts, the Regional Comprehensive Economic Partnership proposed by China and a range of bilateral trade agreements. As former WTO Director-General Pascal Lamy warned, the welter of competing and overlapping agreements could lead to fragmented global trading system.
Third, competitive global governance is affecting development. Partly out of frustration with the slow reform of voting quotas in the IMF and the World Bank (especially the refusal of the U.S. Congress to ratify the 2010 Seoul G-20 agreement), the BRICS group of developing countries -- Brazil, Russia, India, China and South Africa agreed to create a New Development Bank during their summit in July. This major new initiative has been followed by the recent launch of the Asia Infrastructure Investment Bank, led and managed by China, with 20 other partners. While these two development banks may mobilize new resources for development, there is no doubt they will also erode the global norms established by the World Bank and the affiliated Asian Development Bank.
Fourth, the Asia-Pacific region and Europe (as well as the Middle East) have experienced rising geopolitical tensions over the last two to three years. In Southeast Asia, tensions in the South China and East China seas have not yet jeopardized regional economic integration, but do represent a major new risk, which must be addressed and somehow resolved.
Finally, a few major economies are plagued by high internal economic risks and domestic political crises. Political partisanship in the U.S. has reached debilitating levels, amid rising inequality and economic challenges. It limits the country's capacity to act as a leader and balancer in the system. China is going through major economic, social and political reforms that absorb most of President Xi Jinping's political capital and attention. Europe is in deep economic, social and political turmoil. Even the two powerful new leaders in India and Indonesia face considerable obstacles.
So far, the established global order is proving resilient to such crises and is in need of major political input and institutional innovation. So, what can we expect from the three forthcoming summits?
APEC will focus on the TPP negotiations (particularly between the U.S. and Japan), as well as on the relationship between the TPP countries and China. Beijing's bilateral relations with Japan, India and the U.S. will be in the limelight. The question is whether APEC can nudge the game toward more integration and substantive progress in trade negotiations.
The Asean and East Asia summits in Myanmar will focus on mitigating tensions in the South China Sea and the larger region. But can Asian leaders, together with the U.S., manage to set aside concerns about power transition and focus on the common good?
As for the G-20, the focus will be on global growth and confidence building in the world economy, as well as exhortations from the IMF and other multilateral institutions for governments to boost infrastructure investment and tax transparency. On the strategic front, recent tensions between Russian President Vladimir Putin and the West will be a major question mark.
These summits matter. One of three possible scenarios will end up playing out. Scenario one would see major progress in regional trade and interaction between China, the U.S. and Asia at APEC and EAS, followed by significant progress in global rules at the G-20. This would boost the global economy, but do not bet too much on this scenario.
Scenario two would see tensions at APEC (over the TPP) and EAS (over the South China Sea), followed by paralysis at the G-20. Such a situation would add to the risks hanging on the global economy.
Scenario three would see a lack of consensus at the G-20 and EAS, but a powerful APEC summit led by a purposeful China. Based on the level of commitment and capacity of the various hosts, this may be the most likely outcome. It would mark a key milestone in China's rise in East Asia's economy.
Yves Tiberghien is director of the Institute of Asian Research and associate professor of political science at University of British Columbia.