PORT MORESBY – The Asia-Pacific Economic Cooperation forum on Thursday adopted new guidelines on the quality of infrastructure development and investment, with all 21 economies — including China — agreeing to take into consideration recipients’ ability to pay back loans for such funding.
The guidelines call for openness, transparency, cost-effectiveness and fiscal soundness of recipients as international standards for quality infrastructure financing, the Japanese government said after a meeting of APEC foreign and trade ministers in Papua New Guinea.
They are viewed as a veiled counter to China’s trillion dollar infrastructure project, which critics say is intended to draw countries deeper into its economic orbit.
It marks the first time that such guidelines — though nonbinding — have been put into documents, Japanese Economy, Trade and Industry Minister Hiroshige Seko said.
The agreement comes at a time when countries such as Sri Lanka and Pakistan are saddled with massive debts after receiving aid from China under President Xi Jinping’s signature Belt and Road Initiative.
“It was a significant outcome given that Asian countries will promote infrastructure building,” Seko told reporters. “We won consent from China as well.”
The APEC ministers also affirmed the importance of upholding the free trade system despite concerns about U.S. President Donald Trump’s “America First” trade policy, according to Seko.
They agreed to strengthen the role of the World Trade Organization as part of efforts to further promote the rules-based multilateral trading system, he said.
No APEC economy singled out a specific country or bilateral relations such as the tariff war between the United States and China, he said.
Speaking to reporters separately, Foreign Minister Taro Kono said the ministers agreed to further liberalize trade and investment within the APEC economies.
During the meeting, Kono called for an early conclusion to negotiations for the Regional Comprehensive Economic Partnership, a day after 16 members of the envisaged Asian free trade agreement failed to reach a broad deal by a year-end deadline.
In a veiled criticism of Trump’s America First mantra, Kono expressed concern about protectionism and pledged that Japan will take the lead in advancing trade liberalization, strengthening the free and open order and ensuring that the Asia-Pacific region will continue to serve as a center of the world’s growth.
With the RCEP members eyeing a deal next year, Kono said the 16 nations including Japan, China, Australia and India will continue to vigorously negotiate so they can conclude a pact that is comprehensive, balanced and the highest standard possible at an early date.
He, however, underscored the significance of the revised Trans-Pacific Partnership — an 11-nation, high-standard FTA — coming into force Dec. 30, saying the development will help maintain and strengthen the free trade system.
While the RCEP never included the United States, Trump withdrew the United States from the TPP last year.
Using the TPP and RCEP as building blocks, the ministers agreed to step up efforts to realize an APEC-wide free trade agreement called the Free Trade Area of the Asia-Pacific, covering about half of global trade and 60 percent of the world economy, according to Seko.
The meeting took place before a two-day APEC summit starting Saturday in the Papua New Guinea capital, an event that will bring together Japanese Prime Minister Shinzo Abe, Xi and U.S. Vice President Mike Pence in lieu of Trump, among other regional leaders.
APEC groups the TPP members — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam — and China, Hong Kong, Indonesia, Papua New Guinea, the Philippines, Russia, the United States, South Korea, Taiwan and Thailand.
The RCEP groups the 10 members of the Association of Southeast Asian Nations plus Japan, China, South Korea, India, Australia and New Zealand.