00:002025 was a very turbulent time in global trade, no doubt.
00:03There is a fragile truce between Donald Trump and Xi Jinping, sort of punctuated as well
00:10by the summit last week.
00:11What does Asia-Pacific trade look like in 2026, with threats coming from the White House
00:17of a resumption of possible Section 301 tariff investigations?
00:22Well, trade has been extremely volatile over the past year, but so is trade policy.
00:29Sometimes these threats, if you like, I don't really like that word, but it's the idea that
00:34trade restrictions will be put on different APEC member economies.
00:38But sometimes these have actually come into place, sometimes they haven't, so we have to
00:43see.
00:44APEC, for example, we have our trade ministers meeting, it'll be an opportunity to work through
00:48some of those issues and really think what do they mean for respective economies, but
00:54also how they impact business.
00:56You know, it's businesses that get impacted by tariffs and trade restrictions, and so
01:01this is an opportunity to actually talk to businesses about how they impact each other
01:06and how they impact them, and then move forward and say, okay, what do we do about this?
01:10Because we're in a time of also economic difficulties.
01:13Right.
01:14So, how much supply chain resilience is being built in across the Asia-Pacific as the focus
01:18has really been on sort of the G2, right, China and the United States, against the backdrop
01:25of an inflationary war in Iran that is driving up oil prices?
01:29Well, the interesting thing about APEC is most of its economy is a part of really very detailed
01:35but complex supply chains.
01:38So, APEC, through its work, is trying to build in supply chain connectivity, supply chain resilience.
01:43But those are long-term plans.
01:45You can't just do it overnight.
01:46So, some of it is about trade digitalization, actually trying to make goods, components move
01:52faster through our economies, through the ports, through the rails, and so on.
01:57But those are investments that are extremely expensive and time-consuming, so we can't do
02:01it immediately, but I think everyone needs to move forward, not because of trade wars,
02:06but the resilience is just needed anyway, and we learned that through the COVID pandemic.
02:12I don't mean to put you on the back foot or defensive, but how relevant is APEC right now,
02:18given you said, I think I quote you, the biggest issue is confronting and ensuring that the
02:24benefits of globalization are maximized, right? But right now it seems like globalization is under threat.
02:31What's really quite interesting right now is not just the possibilities of trade restrictions,
02:37but also the opportunities. So we talk a lot now about AI, artificial intelligence. So when I talked
02:43about supply chain resilience, it's what can AI do for trade? How can it make goods and services
02:50move faster? And right now it's a policy space that's quite empty. We actually don't know what
02:55policies will be. Right, so AI governance was going to be a topic, I thought, to be discussed between
03:01Donald Trump and Xi Jinping. It kind of got sidelined because of all the bigger issues.
03:06But before this interview, you said you think that the APEC view is that China and the United States
03:13actually have similar philosophies on AI, but maybe just different end results.
03:19Right. I think for the region, we're really focused on innovation, how AI can be used across all of our
03:26economies, what are its practical purposes. And that's something all APEC members are looking at.
03:32I mean, this is a huge area of innovation, lots of new companies coming through. If we think of the
03:37platform economy, you know, of course, there was Uber, and then we also have DD here. But in Southeast
03:42Asia, we have Grab and so on. So some of the really big innovators are coming out of this region.
03:48So it's important to think not just of the negative things, but what we can benefit from.
03:53So in economic terms, we talk about information asymmetries. So how can these information platforms
04:00actually help reduce things and decrease costs?
04:03Well, trade is obviously beneficial to economies, but it can also cause lots of friction, as we've
04:07seen over the last few years. In particular, China, it's having a difficult time boosting domestic
04:13consumption, rebalancing its economy. It's leaned on exports, and that has driven up that friction.
04:20How is China going to best balance its economy without causing that trade friction with its trading
04:26partners like the United States?
04:27Right. So some of the important work that APEC does that people don't notice is work on structural
04:32reform. So this is about domestic regulation. How do you make it easier to do things domestically?
04:38And that includes what happens for local companies, but also, you know, foreign companies. And that
04:44really does help actually do business in a better way. So as we look forward to this, it's looking at
04:49small and medium enterprises. The big guys can, they can navigate all of these complex rules,
04:55regulations, but the smaller guys can't. And that's domestic, it's foreign, it's everywhere.
05:00So to come back to your earlier question about globalization, it's, you know, I have to be freely,
05:06free and admit that it's only benefited a few who can operate in that environment. But we're looking
05:12forward to different companies, SMEs, being able to benefit from that, being able to come into the
05:18supply chain. If we think about Peru, for example, they looked at something like the informal economy
05:24and how to bring the informal sector into the global economy. That's something you would never
05:29think about.
05:29Well, how are we going to maintain or how is APEC going to maintain Taiwan's voice in global trade?
05:37Because China is the host and China has allowed their trade minister from Taiwan to come here.
05:42How, as the executive director of the APEC secretariat, you're going to ensure that Taiwan
05:47does have an economic voice on the stage here at APEC?
05:49Right. So first I've got to say, APEC is a grouping of member economies and that's what
05:54enables the participation of all the economies of the Asia-Pacific region. So we're inviting
06:00everyone. Everyone comes and participates in this and thinks about the rules and regulations that we
06:06have and how we can work together.
06:09Japan and China too. I guess the Japanese trade minister is going to be here as well.
06:14Right. So what platform do you provide to get those two economies, which are the second and
06:20third biggest economies in the world, talking again and not cutting back on trade or doing
06:25export controls or telling their tourists not to visit each other's countries?
06:29Right. So you've got this platform where we talk to each other on APEC's agenda,
06:33but you also have the opportunity for more bilateral conversations. And we saw that last year with
06:39President Xi and President Trump meeting on the sidelines of APEC. So I don't have visibility
06:45into who's meeting bilaterally, but definitely the opportunity is there. So at this point we're
06:51looking at trade, but in late June we're looking at tourism as well.
06:55Are you seeing increased interest, if you will, in renewables in the green economy,
07:01given what's happening to the oil prices and the oil shock?
07:04Yeah, for sure. People are looking to diversify their energy supplies. And that really is critical,
07:11given the amount of energy that AI uses. So we've got to look at that and have diversified supplies,
07:19efficiency, but also a lot of risk management in that.
07:22Well, that speaks to the whole thought that China is hosting it. So obviously China is going to be
07:27pushing the fact that it has diversified extremely into renewables for its energy mix.
07:32Yep, that's right. I mean, China is one of the big producers of renewable energies. And people are
07:39looking to China, but also others to see how we can work together and make sure everyone has that
07:44access to renewables. But we have to remember that there are also a lot of parts that go into renewables,
07:50to solar panels, and to wind. So a lot of that raw material comes from other APEC members,
07:56especially, for example, South America, copper and so on. So there are a lot of complementarities
08:03between APEC economies.
08:04What is top of mind right now as we really sort of kick off the first major meeting of the
08:09APEC calendar,
08:10which will culminate obviously in the Leaders' Summit in November in Shenzhen?
08:13Well, it's laying the groundwork, if you like, thinking about what we need to do so that we have a
08:21successful outcome at the end of the year. What would a successful outcome mean? B?
08:26I mean, it's kind of interesting. And you think about APEC, they think about a one-off leaders meeting,
08:32but there's all kinds of work going on. So for example, we've got ongoing work on services. So that
08:38current period is finished, and we're looking forward to a new agenda. And what does that mean?
08:43We'll have to see. We're thinking about connectivity. So that's what's the next phase of connectivity
08:48that's going to be for APEC. Free trade area of the Asia-Pacific. Are you going to move the ball
08:53forward at all on that? Yeah, that's an interesting question. We see, for example, the pathways to
09:00free trade area of the Asia-Pacific. So that's the, for example, the CPTPP, RCEP, but we also have
09:08what some people call USMCA, some people call COSMA, and so on. We also have other groupings in the
09:14region. I won't go into all of the acronyms, but they're awful a lot. But there's a lot that we
09:19can
09:19learn from each other, best practices. How do you move forward? But also the new rules, the new issues
09:24that we're all confronting. We talked about AI. You know, how do you make sure that we can actually
09:29trade with each other or the embedded services in the different goods that we have?
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