2016 Asia Pacific Economic Cooperation Summit

The Asia Pacific Economic Cooperation (APEC) is one of the largest and most important economic forums in the world. Created in 1989, the APEC held its first multilateral meeting that same year in Australia. Today, APEC is composed of 21 member states and it represents more than 50% of the world’s GDP. Similarly, this Pacific Rim forum accounts for more than one-third of the world population and half of all world trade. Boasting a diversity of member nations, APEC brings together many degrees of social and economic development in an attempt to foment multilateral cooperation.

2016 Asia Pacific Economic Cooperation Summit

Over the last several years, there has been much international discussion around the ambitious Trans-Pacific Partnership (TPP). However, the 2016 presidential election in the United States and the regional tensions in Southeast Asia as well as the absence of China from the partnership and the emergence of smaller regional frameworks has rendered the TPP obsolete for the time being. The fervent anti-free trade discourse of both major party candidates during the recent US election makes it extremely unlikely that the next administration will ratify or implement the TPP, mainly to defend domestic production in North America.

This political dynamic gives center stage and renewed importance to the APEC forum, whose ambitions are not the creation of a free trade bloc, but rather trans-pacific discussion and cooperation. This year marks the twenty-eight yearly APEC summit, which is being held in Peru this weekend (November 19-20). Along with Mexico and Chile, Peru is one of the three Latin American nations that participate as full and active members of the APEC. Nevertheless, other countries within the region, such as Colombia, Ecuador, Panama, and Costa Rica, have all expressed interest in joining the APEC forum. This year’s meeting marks a unique opportunity for Peru and its new business-friendly president, Pedro Pablo Kuczynski, to highlight the country as one of Latin America’s most dynamic economies.

In spite of the regional hardships and the economic slowdown, Peru has managed to sustain a yearly economic growth of over 2.5% throughout the last several years. This economic performance, as well as Peru’s promising president, outperforms major regional players, such as Brazil, Argentina, and Mexico. Furthermore, Peru has been attracting a substantial amount of foreign investment because of its well-diversified economy and its integration with Asia Pacific markets. Not only is Peru a large agricultural producer, but the country is also a large exporter of mineral, metal, and petroleum products, most of which are bought by China.

Peru’s large mining industry and its close economic ties with Asia Pacific are the new normal for Latin American economies. In fact, China has become a major creditor and commodity extractor within Latin America. Today, the Asian Giant represents the most important trade partner to Chile, Brazil, and Peru. While this model can boost growth during times of high manufacturing and demand for commodities in China, it is not sustainable in the long run for the Latin American nations who are deprived of value added economic activities within their territory.

(Read more about Peruvian Grape Production and Export Markets)