Inside Out | Trump’s America First policy a test for Apec’s business leaders

As I prepare to fly off to Vietnam and Thailand for the first of the year’s Apec meetings, it is already clear that this is not going to be like any other year in the trade and investment liberalising organisation’s 28 year life.

For the Apec Business Advisory Council (ABAC), this is even more starkly true. As the region’s businesses face an unprecedented assault from an “America First” President flirting with trade war, so their mettle will be tested on how clearly and persuasively they can challenge the chilling localist and protectionist winds that have been strongly stirred in the US.

The first test, as senior officials gather in Nha Trang in southern Vietnam for two weeks work on the year’s agenda and priorities, will be to gauge how the changes wrought by Trump will affect the meetings. Will senior US officials arrive and sit like Easter Island statues because their scripts have yet to be written, or will US seats be filled by officials too junior to contribute meaningfully? Will US seats be left vacant?

I am sure many officials from other parts of the Apec region will want to plunge into the year’s work programme as if nothing has happened. Those dismayed by US withdrawal from the Trans-Pacific Partnership (TPP) will be exploring whether and how the remaining 11 can “go it alone”.

Those wilfully excluded from the TPP, in particular China, are likely to be pressing for progress on other regional integration initiatives, like the ambitious Free Trade Area of the Asia Pacific (FTAAP). Those that are most vulnerable to the peccadillos of an “America First” administration – clearly Mexico and Canada – may be rolling up their sleeves to build stronger links to other parts of the Asia-Pacific region.

The most profound uncertainty must be over whether the US will simply disengage from the strongly multilateral processes embedded in Apec. Trump has made it clear that he plans to exploit the US’s unique size and strength to prioritise bilateral negotiations where US corporate and economic interests can be most effectively exerted. If this remains true, then the traditional leadership role US officials have played in pursuing region-wide liberalisation might quickly collapse – not just in Apec, but also in groupings like the G20.

There are other economies in the region committed to championing meaningful integration, including in the politically sensitive and difficult areas of regulatory change and structural reform behind borders – but whether they have the heft of the US is another matter.