Apec summit in Beijing dominated by climate change and trade

There were lighthearted moments during the Asia-Pacific Economic Cooperation (Apec) summit in Beijing last week: the odd censoring of coverage of a moment of gallantry by Russian president Vladimir Putin as he put a jacket around the shoulders of Chinese president Xi Jinping's wife, Peng Liyuan, or the various remarks about how the costumes donned by the regional leaders made them look like Star Trek "cosplayers".

While the whole event showcased China’s remarkable economic ascent, and the political influence in the region that has come with that burgeoning wealth, pollution matters bookended the meeting. In the runup to the summit, the Chinese government worked frantically to make sure the event had plenty of what are known as “Apec blue” clear-sky days, with coal-fired power plants closed, factories shuttered and restrictions on traffic.

A breakthrough on reducing carbon emissions came at the end of the summit, when Mr Xi and his US counterpart, Barack Obama, issued a surprise joint communiqué agreeing to strengthen their co-operation on cutting greenhouse gases and pledging to reduce emissions. This made the possibility of a deal on climate change at UN talks in Paris next year look more possible.

Nations are due to try and find a global deal on emissions at the United Nations Climate Conference in the French capital and environmental groups have been looking for leadership from the world's two biggest economies and the two chief drivers of climate change. Between them, the US and China produce about 45 per cent of the world's carbon dioxide.

In the joint communiqué, the presidents said the US and China had “a critical role to play in combating global climate change, one of the greatest threats facing humanity”.

The promises are significant, although they do remain just that – promises – for the time being. China has agreed a target for its emissions to peak by 2030, although it did not give a precise percentage. Previously, China's National Development and Reform Commission had said the target was for China to reduce its carbon intensity by up to 45 per cent of 2005 levels by 2020.

The US has agreed to step up the pace of its efforts to combat climate change, setting a fresh target of a 26 to 28 per cent reduction on 2005 levels by 2025.

Free-trade zone

For the Chinese government, a big priority of Apec was building momentum for a free-trade zone that Beijing is backing, known as the Free Trade Area of the Asia-Pacific.

For the Chinese, this would act as a counterbalance to a regional trade pact, known as the Trans-Pacific Partnership, which is being brokered as part of Washington's efforts to maintain its influence in the area and includes 12 Pacific Rim countries, but, crucially, not China or Russia. Mr Xi urged the regional leaders towards closer integration.

“How can we resolve the risks that regional economic integration goes fragmented? How can we seek new growth momentum in the post-financial-crisis era? How can we break the financing bottleneck for connectivity development?” he said.

Other initiatives at the Apec talks included a trade deal between the US and China on tariffs on a wide range of goods, which will allow the enlargement of the Information Technology Agreement (ITA). This will enable the resumption of the first meaningful tariff-cutting deal at the World Trade Organisation in 20 years.

The terms of the ITA were laid out in 1997, and it’s safe to say that the IT world has changed a fair bit since then, so it should prove interesting to see what progress comes from negotiations to broaden the number of products covered by the agreement to include GPS systems and semiconductors.