[Economy Pulse]Business Events Revitalize the Significance of APEC

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The Asia-Pacific Economic Cooperation (APEC) Summit held last week in Gyeongju concluded with the adoption of the "Gyeongju Declaration" and the announcement that China will assume the chairmanship next year. At the end of last year, Korea selected Gyeongju as the host city for the APEC Summit and, despite the limitations of a provincial city, left a strong impression on the 21 member economies by holding a meaningful international event after dozens of meetings and rehearsals.

The official theme of the APEC Summit was "Sustainable Tomorrow: Connectivity, Innovation, Prosperity." The leaders' declaration included a wide range of measures to achieve this goal, such as reaffirming free trade and multilateralism, cooperation on digital transformation and artificial intelligence (AI), responses to demographic shifts, collaboration in the Asia-Pacific cultural industries, and inclusive and sustainable growth.

Because APEC is a voluntary and non-binding consultative body, there are no mechanisms to ensure the implementation of the summit declaration. With U.S.-China tensions intensifying and the Russia-Ukraine war ongoing, even the wording of the leaders' declaration sparked considerable debate. The United States and China held sharply divergent views on calls for free trade, while Russia vehemently opposed references to the Ukraine situation. As a result, the declaration placed greater emphasis on topics where member economies could find common ground, such as AI cooperation, responses to demographic changes, and inclusive growth. Working-level officials from each member economy spent several months negotiating the text, but due to persistent differences, a consensus was reached only at the last minute before the summit concluded.

The U.S.-China summit and the Korea-U.S. tariff negotiations drew even greater attention than the APEC Summit itself. Globally, all eyes were on the messages exchanged between President Donald Trump and President Xi Jinping, meeting for the first time since the Trump administration's return to power. Domestically, the focus was on whether the Korea-U.S. summit would result in a breakthrough in tariff negotiations. The U.S. and China agreed to a temporary truce, which will require further follow-up, while Korea and the U.S. announced the conclusion of their tariff negotiations.

Unfortunately, over the past decade, the APEC Summit has not attracted much international attention. With the World Trade Organization (WTO) facing the risk of collapse, APEC has become little more than a "talk shop." There has long been criticism that the APEC Summit is limited to formal and perfunctory discussions, lacking substantive action or enforceability.

The biggest factor in the popularity of multilateral summits has been whether President Trump attends. After visiting Japan, he visited Korea two days before the summit, held a few meetings, and then returned home before the APEC opening, dampening the event's momentum. As a result, President Xi's voice inevitably carried more weight at the APEC Summit.

In an environment dominated by protectionism and national self-interest, it was the activities of global business leaders that breathed life into this APEC meeting. More than 1,000 domestic and international business leaders attended the APEC CEO Summit, organized by the Korea Chamber of Commerce and Industry, and two large cruise ships were anchored at Pohang Yeongil Bay to address the shortage of local accommodations.

The core theme of the CEO Summit, held as a side event to the APEC Summit, was the "3Bs": Bridge, Business, and Beyond. This represents the idea of bridging reality and ideals, pursuing innovative business growth, and seeking a better future of prosperity. The summit consisted of 21 sessions covering a variety of fields, including AI, carbon neutrality, the hydrogen economy, finance, advanced technology, and sustainability. CEOs of private companies, top-level dignitaries, and policy leaders attended to discuss practical solutions. The most attention-grabbing participant was Jensen Huang, CEO of Nvidia, the dominant force in high-performance graphics processing units (GPUs) essential for the AI era.

This Gyeongju summit holds significant implications for the upcoming APEC Summit in Shenzhen, China, next year. Facing off against the United States, China should use the occasion not to emphasize "Chinese characteristics," but as an opportunity to introduce and expand a "genuine market economy" system. Additionally, China should actively seek ways to operate business-related events more effectively, taking cues from the Gyeongju APEC Summit.

Jung Ingyo, Professor of International Trade at Inha University (Former Director-General for Trade Negotiations, Ministry of Trade, Industry and Energy)

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