November 15, 2015 / 4:13 PM / 2 years ago

Regional tensions, Paris attacks hang over APEC summit

Staff enter the Philippine International Convention Center during a preparation for the summit, at the main venue of the Asia-Pacific Economic Cooperation (APEC) summit, which will be held next week, in Manila November 15, 2015.Janis Alano

MANILA (Reuters) - Regional tensions over the South China Sea and security concerns after the attack by Islamist militants on Paris could eclipse efforts by Pacific-rim leaders this week to boost trade and growth across a region of around 3 billion people.

Market uncertainty, protectionist pressures and the need for difficult reform as trade growth slows will nevertheless be on the minds of close to 20 leaders attending the Asia-Pacific Economic Cooperation (APEC) in Manila.

The Philippines went on high alert following the strike on France's capital, ramping up security in its capital to ensure the safety of thousands of delegates.

Philippines officials say there has been no intelligence suggesting there might be an attack on the Manila summit, which will be attended by U.S. President Barack Obama, Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe, but about 30,000 police and soldiers have been deployed to guard it.

Even before Friday's assault by gunmen and bombers that left at least 129 dead in Paris, there had been concern that APEC's agenda of enhancing economic integration would be undermined by other issues, not least feuding over the South China Sea.

The Philippines has vowed to be a "good host" by keeping off the summit agenda a subject that has whipped up tension between China and the United States in recent weeks, but said it could come up at a concluding retreat of leaders on Thursday.

"We have no control over what the other economic leaders would be raising during the leaders' retreat," foreign affairs spokesman Charles Jose said on Friday, relaying a message that the Philippines' foreign minister gave to his Chinese counterpart at a meeting last week.

"What is happening now in the South China Sea is causing instability and undermining peace and stability that could have an impact on the development and economic prosperity of the countries in the region," he added.

TALKS ON THE SIDELINES

Beijing, which claims almost the entire energy-rich South China Sea through which $5 trillion in ship-borne trade passes yearly, has stepped up land reclamation and construction in disputed islands and reefs there. Vietnam, the Philippines, Taiwan, Malaysia and Brunei also claim parts of the waterway.

A week before the summit, U.S. B-52 strategic bombers flew near Chinese artificial islands, signaling Washington's determination to challenge Beijing over the disputed sea.

An arbitral court in The Hague recently ruled that it has jurisdiction over a case filed by Manila on its entitlement to a maritime exclusive economic zone and later this month will hear legal arguments on the action.

Obama will likely discuss the friction over the South China Sea and military relations when he meets with Philippine President Benigno Aquino on the sidelines of the summit, said Philip Goldberg, U.S. ambassador to the Philippines.

Aquino and Japan's Abe are also expected to discuss maritime military cooperation during a bilateral meeting, and Manila and Hanoi are due to sign a strategic partnership deal governing how their navies will work together.

Such developments could upset China, which said last week it was up to Manila to repair damaged bilateral ties. Beijing, which has boycotted proceedings in The Hague court, has insisted on using a bilateral track to resolve the dispute.

TRADE WORRIES

The APEC meeting, coming after a G20 summit in Turkey, will be the first for newly elected Canadian Prime Minister Justin Trudeau. But the leaders of two other G20 countries, Russia's Vladimir Putin and Indonesia's Joko Widodo, are not attending, both citing domestic issues for staying away.

It will be a chance for leaders of the 12-member Trans-Pacific Partnership (TPP) to meet for the first time since they sealed a deal to eliminate trade barriers and enable free trade.

APEC, which accounts for 60 percent of global output and nearly half of world trade, is aiming for a larger free-trade area for its 21 economies by 2025, but a re-emergence in some states of protectionism as growth stutters could be a hindrance.

"A slowdown in trade growth is weighing on Asia-Pacific economies, coming after a quarter century of high trade growth that fueled the region's development and transformed it into an engine for the global economy," the APEC Secretariat said in a statement on Sunday.

A two-day meeting of APEC member ministers opens on Monday and will be followed by the summit itself on Nov. 18-19.

Security forces have blocked major roads around the summit venues to hold protesters back, street dwellers have been moved away, and one of Manila's largest bazaars has been dismantled to help avoid the traffic jams that usually plague the city.

Nearly 1,400 domestic and international flights scheduled during the summit week have been canceled, and schools and public offices will be closed, but the stock exchange will remain open.

Editing by John Chalmers and Will Waterman

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