APEC Summit Peru 2024

The 2024 APEC Leaders’ and CEO Summit built on many of the themes of the 2023 cycle with its emphasis on issues of inclusion and sustainability. For Peru, the host of this year’s APEC Summit, it oversaw the APEC cycle under the motto, “Empower, Include, Grow”. Peru’s focus is on the social dimension of growth and development that empowers the most vulnerable, harnesses digital opportunities, and gives impetus to economic growth. 

Peru regards the state of the world as characterized by high levels of income inequality, a loss of jobs and increased precarity and insecurity in employment. These conditions are the result of the challenges created by the increasing effects of climate change, disruptions in global supply chains and an emerging digital economy. Addressing these challenges are important to ensuring that trust in the effectiveness of economic and social institutions are not undermined.

Bearing these conditions in mind, Peru aimed to foster inclusive growth through its three major priorities:

• Trade and investment for inclusive and interconnected growth
• Innovation and digitalisation to promote transition to the formal and global economy
• Sustainable growth for resilient development

The Summit was Peru’s third time as APEC host after it previously held the role in 2008 and 2016. As the host economy, Peru organised over 160 meetings over five cities – Arequipa, Cusco, Trujillo, Pucallpa and Lima – during its hosting year. These meetings included nine ministerial meetings, five meetings of Senior Officials (SOM), meetings of the Business Advisory Council (ABAC) of APEC, and the Leaders’ Summit. Other APEC events included meetings for committees and subcommittees, experts and working groups, national and international seminars, symposiums, and workshops for institutional capacity building.

Peru regards APEC as a key platform to showcase itself as a location for investment, promote the internationalization of Peruvian businesses, and incorporate its sectors into global value chains. Peru also emphasised an “APEC for the People” by bringing the forum closer to the citizens by incorporating the needs of the population into the agenda, activities, and topics of the APEC process. 

The Peru Agenda

Peru’s key priorities seek to empower people, particularly women, the youth, SMEs and informal enterprise, all of whom occupy more vulnerable positions in society. Their empowerment through APEC is envisioned as giving them the tools to participate in the benefits of the global economy and direct it towards their economic and social inclusion.

Trade and investment for inclusive and interconnected growth: This priority focuses on strengthening open, free, and inclusive trade, with the aim of encouraging economic growth that encompasses various sectors of society, and promotes interconnectedness and inclusion, thereby ensuring long-term sustainability. Additionally, APEC aims to balance economic objectives with environmental considerations.

• Trade liberalization: In line with the APEC Putrajaya Vision 2040, Peru aims to develop a renewed vision for the Free Trade Area of the Asia Pacific (FTAAP). 
• Trade facilitation: APEC aims to strengthen the supply chains in the region through adopting effective standards and promoting investment.
• Trade inclusion: APEC is promoting increased access for start-ups, Micro-, Small and Medium-sized Enterprises (MSMEs) to global markets and value chains.

Innovation and digitalization to promote transition to the formal and global economy: this priority seeks to empower the most vulnerable economic actors. Here Peru recognizes that a large portion of the population relies on the informal economy to support their livelihoods. Innovation and digitalization has been will be leveraged to develop pathways to transition to formality, which would create access for workers and small businesses to benefits, such as regular financial sources, public services, and skill-building initiatives. This priority will be operationalized in three areas:

• Policy frameworks and strategies toward formal transition: APEC aims to support exchanges of policies, practices and incentives, and policy-building initiatives that support the formalization of employment and entrepreneurship. 
• Underscoring the social dimension of economic growth: Peru aims to attach particular importance to the role of the social economy in improving competitiveness.
• Bridging gaps and highlighting inclusion: this area will pay special attention to inclusive digital transformation, financial inclusion, particularly as it relates to women in the economy, and the informal economy in the tourism sector.

Sustainable growth for resilient development, which seeks to promote energy transition: this priority recognizes that sustainability will be necessary to ensure economic growth in the long term. Building on previous outcomes, the emphasizes under this priority are decarbonization and the energy transition, sustainable finance, and food security.

• The energy transition: Peru will look to collectively work on policy guidances to develop and implement low-carbon hydrogen policy frameworks in the Asia-Pacific region.
• Food security: APEC’s agenda focuses on reducing food loss and waste as key mechanisms to manage the region’s food requirements. 
• Sustainable finance: APEC will promote sustainable finance in the areas of sustainable finance initiatives, sustainable infrastructure, carbon leakage measures, the clean energy transition, and hydrometeorological risk financing.

Summary of the Peru APEC Summit

The APEC Summit in Peru saw a deepening of ties in the Asian-Pacific region in light of future uncertainty.

Geopolitical conflict featured heavily in the US’s talks with its Asian partners, as Biden attended a trilateral meeting with Japan and South Korea and discussed deepening the security and economic ties between the three countries in response to North Korea and its cooperation with Russia. South Korea and Japan have a history of hostility but find themselves deepening their partnership the face of growing hostility from North Korea.

US President, Joe Biden, also met Chinese President Xi Jinping. The last time the two met was at the same Summit in the previous year. The engagements remained cordial, with Xi affirming that China, “is ready to work with the new US administration to maintain communication, expand cooperation and manage differences, so as to strive for a smooth transition of the China-US relationship”. Biden also affirmed that the two countries, “cannot let any of this competition veer into conflict”. This meeting, much like many of Biden’s bilateral engagements with world leaders at the APEC Summit, and the G20 Summit in Rio shortly after, appear to be the solidifying its existing relationships with its international partners before the change in its Presidency.

Less attention has been on Biden since the US elections, with many leaders looking to January next year when Trump takes office, and the uncertainty this may bring to relations in the region. Multiple commentors have also noted how President Xi and China emerged center-stage at the APEC Summit, supported by the inauguration of a $1.3 billion megaport in Chancay, northeast of Lima, with the promise of it becoming South America’s biggest shipping hub. President Xi has also reaffirmed his support for the international free trade system and called for the stability in global supply chains, rendering him an advocate for the current international order, in contrast to Trump’s policy of tariff hikes that he promised during his election campaign, which would severely disrupt free trade.

While the agenda in Peru was focused on the theme of ‘Empower, Include, Grow’ and there was much talk about supporting the inclusion of people in the global economy, local protests outside the venue of the Summit demonstrate that Peru has a long way to go with regard to its own domestic issues. Protests were held during the APEC Summit, driven by anti-government sentiments and grievances over recent gang-related violence. Peru’s current president, Dina Boluarte, replaced her predecessor, Pedro Castillo, after he was ousted for dissolving Peru’s Congress. Boluarte’s rise to power was deemed illegitimate by some sectors of civil society, while Castillo’s supporters have demanded that he be released from prison. Boluarte’s taking of office had led to violent protests. The President has also had little engagement with other world leaders since assuming her role. Boluarte was investigated for unlawful enrichment, while the Peruvian government’s lack of action to rising crime has compounded public opposition to the President. 

However, none of these domestic issues, nor the additional concerns from locals around China’s megaport, which arguably undermines the inclusive and growth and empowering people themes guiding the APEC agenda, will likely be remembered in this Summit. Instead, most of the questions were on what the future of the region was to be as a result of domestic US politics and its effect on Washington’s foreign policy. For some states, like Peru, China’s infrastructure and trade investments represent an alternative to the US. For others, such as Australia and Indonesia, there appears to be interest in deepening collaboration with other middle powers as a strategy to diversify away from the US without necessarily relying on China.

While the broader global tensions and uncertainty persist, there were still some commitments to cooperation in trade and economic matters that were achieved in Peru. In line with the Peru’s objectives in its APEC presidency, the Lima Summit saw a renewed vision  for the Free Trade Area of the Asia Pacific (FTAAP) to support trade liberalization. The Ichma Statement on A New Look at the Free Trade Area of the Asia-Pacific agenda proposed new working processes to promote information-sharing and cross-sector collaboration to promote integration in the Asia-Pacific region that was “adaptable and responsive to sustainable and inclusive economic growth, the evolving needs of our economies, and the well-being of our people”.

Other issues that featured high on Peru’s agenda included the energy transition, the transition from informal to formal economies. In these areas, the APEC member economies agreed on the APEC Policy Guidance to Develop and Implement Clean and Low-carbon Hydrogen Policy Frameworks in the Asia-Pacific, and the Lima Roadmap to Promote the Transition to the Formal and Global Economies (2025-2040). The former policy guidance on hydrogen argues for APEC economies to cooperate on the development of hydrogen as an energy source. This is motivated by the region’s leading role in the hydrogen industry and numerous projects planned in the region. The Lima Roadmap will serve as a policy guidance for APEC economies to support transition of relevant economic actors from the informal to formal economy by empowering them to overcome structural barriers and integrate into the global economy. This includes, among other mechanisms, implementing policies that lower administrative burdens, building the capacity of the workforce through up- and re-skilling, and creating an enabling environment for innovation and digitalization. This is argued by some commentators as the most important deliverable from the APEC Peru presidency. Other Ministerial-level outcomes that were also recognized in the final Machu Picchu Declaration included the Trujillo Principles for Preventing and Reducing Food Loss and Waste in the Asia-Pacific Region, and the Finance Ministers’ Process’ Sustainable Finance Initiative.

Peru hands over the presidency of APEC to the Republic of Korea for the 2025 cycle.