Trade ministers from Asia Pacific Economic Cooperation (APEC) members will conclude their 2022 meeting in Thailand today. The meeting—discussing the
Trade ministers from Asia Pacific Economic Cooperation (APEC) members will conclude their 2022 meeting in Thailand today.
The meeting—discussing the long-delayed free trade area for the APEC region—will conclude amid COVID-19’s ongoing economic slowdown and political rivalries. APEC includes most Pacific-Rim countries and accounts for over half of global GDP. However, following the Russian invasion of Ukraine, APEC has diplomatically split between Russia and Russian-aligned China; US-aligned countries like Japan and Australia; and the rest.
Thailand’s interests lie in stimulating a post-pandemic economic recovery made more challenging by ongoing omicron outbreaks in APEC countries. Bangkok has a particular interest in re-welcoming Russian tourists to its tourism-dependent economy. However, the reality is that APEC countries have spent recent months sanctioning each other over the Ukrainian war. Washington and its APEC allies have imposed economic sanctions on Russia expected to result in a 10% contraction in Russian GDP. Moscow has reciprocated with sanctions of its own against APEC’s US-aligned bloc.
Expect APEC’s free trade area to stall while Thailand and other “neutral” countries within APEC face economic fallout with the US pressuring APEC to divest itself from Russian interests. In Thailand’s case likely resulting in Russian investments being pulled from the country.
Download the Daily Brief app to stay ahead of geopolitics with daily, short, forward-looking analysis of geopolitical events before they hit the headlines.