APEC world leaders meeting highlights idea of 'free and fair' global trade is severely wounded

It is billed as one of the most significant annual trade gatherings, but this year's Asia-Pacific Economic Cooperation summit had a Trump-sized hole that has shaken its very foundations.

The APEC is an annual meeting that brings together 21 economies from across the Pacific, accounting for over half of world trade.

Since the first summit in Canberra four decades ago, APEC leaders have worked towards "free and fair" trade.

Also, multilateralism; deals that encompass the whole region, rather than simply between two economies.

But US President Donald Trump has demonstrated he is not fussed about any of that.

His embracing of aggressive tariffs earlier this year to strike new trade deals sent shockwaves across the world.

His trade war with China sowed further uncertainty, as Beijing retaliated with severe restrictions on rare earths, minerals vital for modern-day manufacturing.

The president has struck new deals with various countries.

While tariffs have been lowered, they have not been abandoned.

Mr Trump's approach was further cemented when he decided to skip the APEC conference in the South Korean city of Gyeongju.

The US official in charge of APEC, Casey Mills, defended the move, stating the president was still dedicated to APEC but was required elsewhere.

When asked to outline the US's position, Mr Mills advocated for "fair" and reciprocal trade.

The phrase "free trade" was notably absent.

Moving on from the States

South Korean President Lee Jae Myung painted a bleak picture when he opened the APEC summit.

"We are standing at a critical inflection point," he said.

"Economic uncertainty is deepening and the momentum for trade and investment is weakening."

Canada's Prime Minister Mark Carney took it a step further.

"The old world of steady expansion of rules-based liberalised trade and investment, a world on which so much of our nations' prosperity … is based — that world is gone," he said to business leaders at the summit.

The prime minister has reason to be worried.

Canada has been a routine victim of Trump's attacks, with the president recently declaring trade negotiations were now dead after Canada aired television advertisements criticising Trump's tariffs.

Mr Carney told delegates his country was now edging away from US trade dependence and pushing towards double non-US exports over a decade.

He has also vowed to repair relations with China after its own rocky past.

During a meeting with President Xi Jinping, Mr Carney vowed to "help build a more sustainable, inclusive international system".

Rare earths: Where does Australia stand as China advances in sector?

The missing US president stood in contrast to China, which was represented at the highest level with Mr Xi.

From the outset, China was able to promote itself as a believer in free and fair trade, and multilateralism.

"Let us together safeguard the multilateral trade system," Mr Xi told summit leaders behind closed doors, according to China's Xinhua news agency.

"Let us build an Asia-Pacific community."

Despite Mr Xi's words, China has shown it is able and willing to go against the notion of free and fair trade.

It already used trade coercion against Australia after then-Prime Minister Scott Morrison called for an independent investigation into the origins of COVID-19.

This year, it announced severe restrictions on rare earths, an industry it has a near monopoly over, controlling 90 per cent of global production.

The temperature has cooled after a meeting between Mr Trump and Mr Xi.

But China only agreed to pause some restrictions, not cancel them.

In other words, China may decide to play its strong hand again and clamp down on trade in the vital sector.

And while Australia is in a good position to benefit due to its own rare earth reserves, the truth is, China's near monopoly on the vital sector cannot be replaced in the near future.

And that has left countries scrambling for alternatives.

Final statement

At the end of the APEC summit, leaders signed the joint Gyeongju Declaration.

Final APEC statements are common, but never assured, as they require all parties to sign on.

The final statement acknowledged the "critical juncture" the region was at, and leaders called for "strengthened actions" to advance economic integration.

The leaders also vowed efforts to ensure "resilient" supply chains, noting current challenges.

Although APEC is non-binding, a final statement is at least a symbolic victory and a show of unity in unstable times.

But, as big trade tensions continue to swirl unresolved, the notion of "free and fair trade" is severely wounded.