Framework Trade Deal Clinched In Malaysia Could Prompt Amicable Trump, Xi Meeting At APEC Korea

From Nor Baizura Basri

GYEONGJU (South Korea), Oct 29 (Bernama) – As Prime Minister Datuk Seri Anwar Ibrahim travels to South Korea for the APEC Summit, he can take pride that it was Malaysia that offered a “neutral” venue for the United States (US) and China to reach a framework agreement and avert a trade war between the economic superpowers.

This sets the stage for what is widely anticipated to be an amicable four-eyed meeting between US President Donald Trump and Chinese President Xi Jinping, which is hogging the limelight at the Asia-Pacific Economic Cooperation (APEC) Leaders’ Meeting (AELM) in the ancient southeastern city of Gyeongju.

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While Anwar was hosting leaders and top officials of international organisations as chair of the 47th ASEAN summit and related summits at the KLCC complex in the Malaysian capital, American and Chinese trade officials were engaged in feverish discussions and managed to hammer out a deal just a mile away at Menara 118.

Undeniably, Malaysia has set the momentum for a two-way meeting between the leaders and a US-China trade deal, and in the process, avoid tariff imposition on each other.

Otherwise, this would have made life more difficult for other APEC economies, and especially ASEAN countries already reeling from high costs due to Trump’s “Liberation Day” tariffs, as their economies are intrinsically intertwined with both the American and Chinese economies.

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Foreign Minister Datuk Seri Mohamad Hasan and Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Aziz are scheduled to arrive in South Korea today to attend the ministerial portion of the APEC meetings, which preludes this Friday’s summit.

APEC 2025 South Korea, themed "Building a Sustainable Tomorrow,” will focus on advancing regional trade, artificial intelligence and sustainability, with ministerial sessions on health, the digital economy and small and medium-sized enterprises.

APEC’s economy is projected to expand by around three per cent this year, down from 3.6 per cent in 2024 as trade-restrictive measures have multiplied and confidence in institutions has weakened.

Yet in this somewhat tough trading environment, APEC’s value lies in providing a platform where economies can continue to cooperate, not by avoiding differences, but by managing them pragmatically.

Therefore, a positive outcome between the two economic giants, both APEC members, is pivotal for other member economies.

The main focus of the 15 leaders from the 21 APEC economies, hosted by Anwar at the ASEAN Summit and Related Summits, was trade, tariffs, market-opening measures and deeper integration among their economies.

Their back-to-back meetings in KL and then in Gyeongju therefore augur well as a continuation of discussions on economic cooperation, particularly as the region faces evolving trade and investment dynamics amid a shifting and disruptive global landscape.

Demographic and digital change 

APEC 2025 has placed two issues at the heart of this year’s agenda: demographic change and artificial intelligence.

A statement issued after the senior officials' meeting said they had steered practical cooperation across APEC’s agenda. This includes efforts to expand paperless trade and digital cooperation, advance readiness for a high-standard and comprehensive free trade agreement, shape regional approaches to artificial intelligence, accelerate public health and boost services competitiveness.

South Korea has lined up demographic change and artificial intelligence as the two core initiatives that could spur a new direction and shape the future of APEC economies.

An ageing population is also a source of concern for most APEC economies, including Malaysia, with 8.1 per cent of the region’s population aged 65 and above, according to United Nations statistics.

According to APEC Secretariat executive director Eduardo Pedrosa, the proposed APEC Collaborative Framework on Demographic Change — currently under discussion —  acknowledges that ageing populations are already reshaping labour markets, healthcare systems and fiscal sustainability. 

However, he said questions remain about how the region can sustain growth if its working-age population has slowed to near zero and is projected to turn negative by 2035.

Therefore, as the region’s populations age, the sources of growth must evolve. 

"Artificial intelligence offers one of the most powerful tools to offset demographic decline, enhancing productivity, improving services and opening new frontiers of innovation.”

“Yet, it also brings profound challenges in energy demand, sustainability and trust," said Pedrosa.

Malaysia’s strategic propositions at AELM

Meanwhile, Juwai IQI global chief economist Shan Saeed told Bernama that Malaysia's presence at APEC serves as a constructive disruptor —  marrying fiscal discipline with digital audacity.

In an era marked by protectionist reflexes and geopolitical fragmentation, Malaysia stands as ASEAN's most credible growth anchor.

Here, fiscal prudence intersects with structural ambition and solid fiscal consolidation with discipline, he said.

After successfully chairing ASEAN this year, he said Malaysia’s leadership in Gyeongju will project confidence, composure and conviction, reminding the global community that trade is no longer a zero-sum construct.

Malaysia's voice at APEC will resonate with clarity, credibility and conviction, said Shan. Gyeongju, more than an hour’s drive from Busan, has earned the nickname of "the museum without walls”. It is home to historical sites like royal tombs, old palaces and temples, some of which are designated as UNESCO World Heritage Sites.

This is the second time South Korea has hosted the summit, after doing so in 2005. APEC, a non-binding loose consultative forum, represents 21 member economies collectively comprising nearly 60 per cent of the global gross domestic product and 47 per cent of world trade.

-- BERNAMA