Podcast: Where Next in Asia Geoeconomics Past Iran Fallout?
Council chief on forecasting Indo-Pacific and Southeast Asia geoeconomic futures beyond Middle East conflict fallout, including in key forums such as APEC.
INTRODUCTION
ASEAN Wonk: Welcome to the ASEAN Wonk Podcast, where we bring you expert insights and regional perspectives on Southeast Asia and Indo-Pacific geopolitics and geoeconomics. I’m your host Dr. Prashanth Parameswaran. If you haven’t already, do subscribe to the ASEAN Wonk platform at www.aseanwonk.com so you don’t miss our full posts.
Our guest today is Dr. Kaewkamol “Karen” Pitakdumrongkit, who is the executive director at the Pacific Economic Cooperation Council (PECC) that plays a very important role in some of the regional geoeconomic conversations including in APEC. We start our conversation talking through some of the perceptions of current challenges in policymaking, including the Middle East conflict fallout. Be sure to stay tuned as we go through a range of other subjects, including China’s evolving APEC agenda for its chair year this year and what to expect in the future regional economic agenda in a context where Vietnam will be chairing APEC in 2027 as Singapore will be chairing ASEAN.
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STATE OF CURRENT REGIONAL GEOECONOMIC DYNAMICS
ASEAN Wonk: So welcome to the podcast, Karen, and let’s start, if we could, on where we are now with respect to the regional geoeconomic policy conversation. You were recently at the senior officials meeting with respect to APEC. Your organization also does a number of surveys on an annual basis with respect to these geoeconomic perceptions. What is your sense in terms of these senior officials meetings and conversations with officials about where the regional dynamics and geoeconomic policy conversations are? It seems like a lot of the focus is around the Iran war and some of the geoeconomic fallout, and very interested in your perceptions about what you’re sensing from policymakers.
Dr. Kaewkamol Pitakdumrongkit: Thank you so much Prashanth for having me. Yes I am the executive director of PECC, but just want to make a quick note here that what I’m going to say is my own view: it doesn’t represent PECC’s view of positions. So yes, we just came back from the senior officials meeting in Shanghai. I and my colleagues were there and we had a lot of activities, like organizing some workshops or a general meeting which is our annual conference we do for ourselves and for APEC policymakers. The sentiments during the SOM-2 (senior officials meetings) and related meetings are concerning because we know we are in the midst of rising protectionism as well as energy shocks and also some energy issues – you know, the spillover from conflict in the Middle East. This actually seeped into the discussions during APEC. So we talked a lot about the implications of energy problems as well as geopolitics. But the atmosphere at APEC is very open because APEC is a nonbinding platform. So it’s actually open for discussion and sharing ideas, best practices and concerns. I think I feel that overall, the discussion was stimulating, and people there, APEC officials, are butting heads to try to figure out how to lessen the impact of external factors, external shocks like energy shocks on the region. I think we’re trying to find what would be the collective action that we can put forward to help the region navigate in this challenging time.
“The sentiments during the SOM2 and related meetings are concerning because we know we are in the midst of rising protectionism as well as energy shocks…you know, the spillover from conflict in the Middle East.”
HOW CHINA IS SHAPING THE AGENDA
ASEAN Wonk: China is chairing APEC this year and PECC provides support for APEC and some of these big geoeconomic conversations. Obviously a lot of this is in the shadow of the superpower summitry between the United States and China, and there’s a lot of focus about how the leaders of the United States and China will be meeting multiple times potentially this year: we’ve just seen the recent summit meeting happen between the two countries. Being in the room at these senior officials’ meetings, how do you sense that these meetings are going within China’s APEC agenda, which is much broader than just the US-China relationship?
Dr. Kaewkamol Pitakdumrongkit: Yeah. That’s a great question, Prashanth. Yes. APEC, as you know, is the organization with twenty-one member economies: definitely it’s bigger than China and US. China is doing very well on APEC so far. The theme is building an Asia Pacific community to prosper together. And this year, China chose to focus on three priorities. One is openness, two is innovation, and three, cooperation.
Openness, the focus now is on how can we show our support for multilateral trading system; how we can work toward a rule-based economic system that make it more predictable, make it more viable for businesses to operate. There is also a lot of discussion on openness about how to strengthen supply chain resilience and connectivity. There are a lot of APEC initiatives that we are seeing headway on like connectivity projects in three pillars – physical, institutional and people-to-people. For example, paperless trade: how can we make sure that electronic certification that could facilitate trade better. That’s about openness.
So the second priority is called innovation. So for this one, China focuses on artificial intelligence (AI) applications and also how to promote the interoperability of data standards or other standards across economies. Innovation also talks about how to enhance digital infrastructure as well as workforce digital literacy and AI skills. So we are trying to make inroads as we have a lot of focus on the digital economy. And the last one which just got endorsed by our leaders is called the APEC AI initiative. So it’s about shoring up cooperation within APEC on AI.
And last but not least, the third priority is cooperation. So under cooperation, it covers variety of things. It covers sectoral cooperation like on SMEs, human resources, energy, food security, public health, etc. So this one is broad but it’s actually very useful because cooperation focuses on how can you ensure that growth and development in the APEC region is inclusive. So because we have some groups that are falling behind – disadvantaged groups, women, etcetera. So that cooperation will ensure that these groups are benefiting from the growth and development in APEC.
NEW GEOECONOMIC OPPORTUNITIES AMID CHALLENGES
ASEAN Wonk: Some of these priorities you mentioned are important and carry on from chair to chair, like artificial intelligence which was prioritized as well when South Korea chaired last year, or aspirational developments like the Free Trade Area of the Asia-Pacific (FTAAP) countries have been working towards for a long time. There are also a number of opportunities in areas like trade pacts with RCEP and CPTPP or sectoral agreements, in spite of the challenges we’re seeing as well. As somebody who’s very active in these conversations, how are countries balancing the opportunity side of this relative to challenges?
Dr. Kaewkamol Pitakdumrongkit: Definitely. Yes, we talk about challenges…we also talk about opportunity as well: how can we ensure that opportunities are complementary and also how can we work toward more promotional benefits. So in terms of opportunity, yes, we have, for example, under openness, we look at openness about how to support the multilateral trading system fostering the rule-based international economic system. We talk about FTAAP as well…to try to add more value to the conversation that has been going on the trade front. You mentioned TPP and also CPTPP, right? There’s a lot of free trade agreements being signed and being implemented. For example, RCEP…the project that APEC is trying to do is how can we construct or develop FTAAP. I just want to refer back to our state of the region report in 2022, where we had a question asking officials about how do you envision this FTAAP: do you think this could be a standalone negotiation or could we use existing FTAs as building blocks to develop the FTAAP? The overwhelming majority said that we should use existing FTAs like CPTPP or RCEP and perhaps expand them – add more members and that could help us build up to the larger Asia FTA covering Asia Pacific economies. That’s one thing that APEC discussion and also APEC inputs have added value to regional economic development.
Also, on innovation, yes, you mentioned about some progress being made so far to China. The there was a plan on some discussion right now to talk about whether we should do something that actually has additional progress. As you know, there was an APEC AI initiative endorsed by the leaders last year. So we are discussing whether we can have some high-level statement like this coming up at the end of the year [at APEC summit engagements in] Shenzhen. Would that be possible? So it’s still in the process of deliberating and discussion.
“So we are discussing whether we can have some high-level statement like this coming up at the end of the year [at APEC summit engagements in] Shenzhen. Would that be possible? So it’s still in the process of deliberating and discussion.”
But…I think the sentiment is that we need…some message from the high-level people, like leaders’ level, to actually propel the progress of AI so far. And for AI, I just want to maybe add a few things about PECC work that we have been doing to support on the AI/innovation front. We have a project on artificial intelligence, which has advanced discussion on many aspects of AI cooperation that includes SMEs, AI transformation that would include capacity building as well as AI safety and governance. So we hope that it would help feed into the APEC discussion and help them come up with ways to cooperate better on the AI front.
LOOKING AHEAD TO THE COMING 2027 GEOECONOMIC AGENDA
ASEAN Wonk: We’re going to be leading into some of the summit engagements later this year that China will be hosting, and then in terms of upcoming geoeconomic dynamics, Vietnam will be chairing APEC next year as one of the world’s most active users of trade agreements with the chair position moving back to Southeast Asia after being in Northeast Asia with China. How do you see geoeconomic dynamics manifesting in terms of the proceedings that we’ll see later this year and then into 2027?
Dr. Kaewkamol Pitakdumrongkit: Yes, this is…