Acrimonious Pacific summit underscores China-US tensions

Image 1 of 2

From left, Australian Prime Minister Scott Morrison, Japan Prime Minister Shinzo Abe, Papua New Guinea Prime Minister Peter O'Neill and U.S. Vice President Mike Pence shake hands during the Leaders Electrification Project meeting as part of the APEC 2018 at Port Moresby, Papua New Guinea on Sunday, Nov. 18, 2018. In a statement issued to media, Papua New Guinea has invited Australia, Japan, New Zealand and the United States to work together to support its enhanced connectivity and the goal of connecting 70% of its population to electricity by 2030. Currently only about 13% of Papua New Guinea's population have reliable access to electricity. (AP Photo/Aaron Favila)

Pacific Rim leaders at a key Asian summit failed to reach agreement on a joint declaration on world trade for the first time in nearly three decades, highlighting the growing tensions between China and the U.S.

The Asia-Pacific Economic Cooperation summit's acrimony also underscored the rivalry between China and the West for influence in the South Pacific, where Beijing has been wooing impoverished island states with aid and loans.

The 21 APEC nations, which account for 60 percent of the world economy, struggled at the two-day summit in Papua New Guinea to bridge their differences over the role of the World Trade Organization, which governs international trade, officials said.

Instead, a statement was issued by the meeting's chair, Papua New Guinea Prime Minister Peter O'Neill.

"The entire world is worried" about tensions between China and the U.S., O'Neill told reporters surrounding him after the meetings ended Sunday, when he confirmed there was no joint declaration from the leaders.

Draft versions of the declaration seen by The Associated Press showed the U.S wanted strong language against unfair trade practices that it accuses China of conducting. China wanted a reaffirmation of opposition to protectionism and unilateralism that it says the U.S. is engaging in.

The U.S. has imposed additional tariffs of $250 billion on Chinese goods this year, and Beijing has retaliated with its own tariffs on U.S. products.

"I don't think it will come as a huge surprise that there are differing visions" on trade, said Canadian Prime Minister Justin Trudeau. "Those prevented there from being a full consensus on the communique."

U.S. Vice President Mike Pence and Chinese President Xi Jinping traded barbs in speeches on Saturday.

Pence professed respect for Xi and China but also harshly criticized the world's No. 2 economy for intellectual property theft, forced technology transfers and unfair trading practices. He accused China of luring developing nations into a debt trap through the loans it offers for infrastructure.

The world, according to Xi's speech, is facing a choice between cooperation and confrontation as protectionism and unilateralism grows. He said the rules of global institutions set up after World War II such as the World Trade Organization should not be bent for selfish agendas.

Pence told reporters that he had two "candid" conversations with Xi, who is expected to meet President Donald Trump at a Group of 20 summit at the end of this month in Argentina.

"There are differences today," Pence said. "They begin with trade practices, with tariffs and quotas, forced technology transfers, the theft of intellectual property. It goes beyond that to freedom of navigation in the seas, concerns about human rights."

The U.S. is interested in a better relationship, "but there has to be change" from China's side, Pence said he told Xi, who responded that dialogue is important.

China's Foreign Ministry rejected the U.S. criticism that it was leading other developing nations into debt bondage.

"The assistance provided by China has been warmly welcomed by our partners in this region and beyond," Wang Xiaolong, a Foreign Ministry official, told a news conference.

"No country either in this region or in other regions has fallen into a so-called debt trap because of its cooperation with China. Give me one example," he said.

China is a relative newcomer to providing aid, and its loan-heavy, no-strings attached approach has unsettled Western nations that have been the mainstay donors to developing nations and often use aid to nudge nations toward reforms.

In Port Moresby, the impact of China's aid and loans is highly visible. But the U.S. and its allies are countering with efforts to finance infrastructure in Papua New Guinea and other island states. The U.S. has also said it will be involved in an Australian plan to develop a naval base with Papua New Guinea.

On Sunday, the U.S., New Zealand, Japan and Australia said they'd work with Papua New Guinea's government to bring electricity to 70 percent of its people by 2030. Less than 20 percent have a reliable electricity supply.

"The commitment of the United States of America to this region of the world has never been stronger," Pence said at a signing ceremony. A separate statement from his office said other countries are welcome to join the electrification initiative provided they support the U.S. vision of a free and open Pacific.

China, meanwhile, has promised $4 billion of financing to build the first national road network in Papua New Guinea, among the world's least urbanized countries.