The 20th Asia Pacific Economic Cooperation (APEC) meeting among 21 nations in the Pacific Rim has come and gone—not with a bang, but a whimper. It was held on an island off the Russian seaport of Vladivostok, September 8–9, 2012. The timing wasn’t good. The summit was overshadowed by (1) continuing diplomatic strains across the region (tensions over territorial claims and disputes over the future direction of trade initiatives) and beyond (security issues and continuing social unrest in the Middle East); and (2) economic uncertainties in Europe as its leaders grapple and struggle to resolve the 3½-year-old “debt” crisis amid a double-dip recession in the eurozone, sparking concerns about the global economic downturn.
APEC accounts for 40 percent of the world’s population, 54 percent of economic output, and 44 percent of total trade. It has the world’s three largest economies—the United States, China, and Japan. Yet, there wasn’t much APEC could do about the strong headwinds to economic recovery globally, other than declaring: “In such circumstances, we are resolved to work collectively to support growth and foster financial stability, and restore confidence.”2 How lame has global leadership become! But life goes on.
Over the past 10 years, APEC trade has risen four times and foreign direct investments in the region are up more than 20 percent a year. But the global economy has recently faced serious downside ...