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Apec: An overview of the Asia-Pacific trade bloc

The US is a founding member of the Asia-Pacific Economic Co-operation organisation, better known as Apec, along with 11 other countries which have coastlines on the world’s largest ocean. 

However, given the current American president’s apparent aversion to all trade blocs, being a founder is no guarantee that the US will continue to be a member.

US President Donald Trump has already taken America out of the Trans-Pacific Partnership, or TPP, and now seems busy dismantling – or renegotiating – the North American Free Trade Agreement, or Nafta. 

Moreover, recently, Trump has decided to forego a visit to the annual Apec summit, scheduled for next month in Papua New Guinea.

Last year, when he attended the last summit, in Vietnam, Trump claimed the US was a victim of “violations, cheating or economic aggression” by other member countries of Apec.

This is a common theme for Trump, who has previously said similar things about TPP, Nafta and other trade deals, including the ones in place with Europe – that other countries are levying tariffs and taxes unfairly against the US while benefiting from America’s lower charges.

Trump has also objected to the trade practices of individual countries and has introduced tens of billions of dollars’ worth of tariffs on imports from China and Germany.

While he may or may not have a point about the unfairness, exiting Apec is probably not on the agenda – but who knows with Trump really?

Although leaving Apec does not mean the US loses access to the Asian economy, the arguments in favor of staying in Apec are many and persuasive.

We will highlight some statistics later in this article, but a quick glance at key data shows that the Apec region:

  • has almost 40 percent of the world’s population;
  • accounts for 47 percent of world trade; and
  • accounts for more than 60 percent of global gross domestic product.

According to Apec data, among the top traded products are integrated circuits, computing devices, and motor vehicles and parts. (See pie charts below.)

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Given that Trump is determined to drive growth in the US manufacturing sector, turning away from a group which includes so many fast-growing manufacturing nations does not seem like a good idea.

But Trump has shown that he is willing to make bilateral deals directly with other countries, and take individual companies into account, outside multilateral structures.

So he may, for example, deal directly with the countries from which US companies – like Apple and other tech companies and automakers – procure the most manufacturing services and make specific agreements with them, setting aside the region-wide trading framework provided by Apec.

While there has been no clear indication from the Trump administration about Apec, it’s unlikely the US will choose to isolate itself from Apec.

Below, we list each of the 21 countries in Apec, and highlight one or two of their manufacturing strongpoints, particularly if they have some connection with the US.

Smartphones, chips of all kinds, battery technology, and automotive parts are among the major product categories in which US companies works with Apec countries, so any change in the trading environment will have profound and perhaps disruptive effects on many markets and economies around the world.

And as much as Trump and many others may like companies such as Apple to move its manufacturing operations from Asia to the US, and has made it clear that this is what would be desirable, it’s questionable whether this is economically feasible or even technically possible.

But from an economic analyst’s point of view, these are probably the most interesting times in modern history.

The US and Apec

The global financial crisis had a dramatic effect on US exports to Apec countries. In 2009, they dropped to about one-tenth of what they were in 2008, according to data collated by Trading Economics.

Things gradually returned to normal by around 2012, although there’s been a slight dip since 2016.

In January this year, exports to Apec from the US were valued at $75 billion. That equates to almost $1 trillion over the course of 2018.

The average monthly figure between 1992 to 2017 has been calculated at more than $50 billion.

Five largest Apec export markets for the US in 2016

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5 top Apec export markets
1.Canada$267 billion
2.Mexico$230 billion
3.China$115 billion
4.Japan$63 billion
5.South Korea$42 billion
Total$717 billion

Five top export categories
1.Machinery$131 billion
2.Electrical machinery$124 billion
3.Vehicles$91 billion
4.Aircraft$59 billion
5.Mineral fuel / oil$50 billion
Total$455 billion

The most recent statistics available from the US government – highlighted in the map and tables above – shows that American goods and services trade with Apec economies totaled $2.8 trillion in 2016.

Exports totaled $1.2 trillion. Imports totaled $1.6 trillion.

Therefore, the US goods and services trade deficit with Apec economies was $448 billion in 2016.

The US goods trade deficit with Apec economies was $576.5 billion in 2016.

The US has a services trade surplus of $128 billion with APEC economies in 2016.

Meanwhile, the US foreign direct investment in Apec countries amounted to $1.3 trillion in 2016.

The investments were concentrated in “non-bank holding companies”, manufacturing, and financial sectors.

Sum of the parts

The old phrase, “the whole is greater than the sum of the parts”, supposedly coined by Aristotle, probably does not hold true for trading blocs, since one of their intended functions is to enable smaller economies to compete on equal terms.

This kind of arrangement probably has more of a social function in that it helps smaller countries develop and build their markets and economies within a stable trading environment.

But does it weaken, undermine or hold back the larger economies? It could be argued that it does, and that countries like the US and China would do better to pick and choose between the countries to get the best deals.

Some might call this the “divide and rule” tactic, and that it does not provide the long-term stability required to make large investments in infrastructure, arguably the foundation for industry.

However, it remains to be seen what the US will decide and how it will affect each of the countries in the Apec region.


Mining, which is categorized as “continuous” manufacturing, is huge in Australia. from gold to coal and other metals and minerals, the country has an abundance of riches under the surface.

In terms of discrete manufacturing, the country has seen a structural decline since the 1960s, but the sector still accounts for around 10 percent of GDP.

Other notable exports include agricultural products, such as meat, as well as wool and wine.

Oil is its biggest import, along with coffee and gold, which is odd when you consider that the country mines and exports so much of it.


Brunei is an oil-rich kingdom near Malaysia which probably feels out of place because similar nations are to be found in the Middle East.

While it may not be a big exporter of much more than oil, it’s a good market for machinery and transportation companies.

And with the oil sector increasingly digitalizing its operations, it’s probably a good market for IT and IIoT services.


The US’ giant neighbor to the north is currently a priority subject for Trump, who looks to be trying to persuade it to renegotiate Nafta.

Canada exports a lot of oil, vehicles, and machinery to the US. In total, it exports about $270 billion worth of goods and services to the US a year, which is about the same as it imports from its slightly less giant neighbor to the south.


The long strip of land on the left side of South America as you look at the map imports about $60 billion worth of goods and services a year.

As with most of the countries on this list, its main trade is in mineral fuels, including oil, machinery, including computers, and vehicles and electrical goods. It’s also a big importer of knitted clothes because it can get cold in large parts of the mountainous country.

Its biggest exports are copper, ores and other products of mining, accounting for more than 50 percent of revenues earned.

Other significant exports include fish and fruits.


How to summarize China. A country of 1.4 billion which has gone from being a largely agrarian economy to, arguably, the world’s leading manufacturer in the space of a single lifetime.

Some statistics would place the US as still being the world’s leading manufacturer, but status symbols are probably not helpful in understanding what is going on now and how things might progress in the future.

The US has imposed sanctions on hundreds of billions of dollars’ worth of goods from China, and China has responded in kind.

Not only are the two countries competing for industrial markets, China is also quickly developing its “tech” sector, which most people understand to mean computer technology, as well as new areas of artificial intelligence and so on.

The US is still way ahead in many sectors, but the trade deficit it has with China – which totals around $400 billion a year – rankles with many in the country for some reason.

After enjoying years of clothes that are so cheap you wonder how anyone could make anything other than a loss on selling them, you might have thought Americans and others would celebrate China’s emergence on the world economic stage. And those super-advanced smartphones may never have happened if it weren’t for cheap yet sophisticated manufacturing services.

But business is business, and America is nothing if not competitive. Clearly, Trump is not willing to see the US manufacturing sector completely erode like it has in, say, Australia. And by pressuring Apple and others to reconsider the US as a manufacturing base and make more investments in the country, Trump is looking to reverse the trend of advanced manufacturing operations apparently setting up anywhere except the US.

However, even though robotics and automation hardware and software makes the playing field more level in that they cost almost the same everywhere, it will be interesting to see whether a recent “reshoring” trend – of bringing back jobs and operations to the US – will continue because there are genuine economic benefits or if it’s just politics.

And that’s not even considering China’s abundant wealth in rare earth minerals which are essential for most electronics gadgets of today.

China’s economic growth does, however, open up many opportunities to sell a massive range of technological goods and services. And if you can make them as good as, say, Apple’s, Google’s, Mercedes’ and so on, growth could be continuous for almost everyone for the foreseeable future.

Hong Kong

The residents of Hong Kong always speak with relief when they talk of the freedoms they enjoy because they are not totally controlled by Beijing. It’s probably partly because of the autonomous political structure that the island has seen much more innovation in its industrial sector than its counterparts on the mainland.

However, China is by far its largest trading partner, accounting for almost half of its exports. The US is in second place, buying around 13 percent of Hong Kong’s exports. In recent years, this has mostly consisted of machinery and apparel.

For a relatively tiny place, Hong Kong exports a huge amount – more than $550 billion worth. The biggest categories are integrated circuits and telecommunications technologies.

In terms of imports, electrical machinery, precious metals, and computers are the biggest categories, and they account for approximately the same amount as exports in dollar terms – actually, slightly more, at around $590 billion.


The sprawling archipelago that is Indonesia, with its 260 million population, could be considered a sleeping giant. At the moment, it mainly exports commodities such as fuel oils and cooking oils – which amount to about 35 percent of total exports. Its exports of machinery account for a fraction of that, at around 5 percent.

It’s a fairly diverse economy with sectors such as clothing, vehicles and forestry products each exporting anywhere between $4 billion to $9 billion worth of goods.

There’s relatively strong demand for computers and electrical items in the country, and China, US and Japan its main trading partners.


Until China came along, Japan was the big worry for the US economy. In the 1980s and 90s, Japanese companies enjoyed global profiles. They still do, but the country is not seen the same way now.

As technological sectors, automotive and robotics go together, which probably explains why Japan has excelled in both for decades.

Not having a lot of natural resources of its own, Japan is a big importer of oil. But after that, it’s mostly machinery and technology.

Its main export – surprisingly – is cars, accounting for 20 percent of foreign revenues. Computers and electrical machinery are also big earners.

South Korea

While South Korea does not have as many global car brands as its neighbour across the water Japan, it does boast the highest density of robots per 1,000 workers.

This is probably because of the absolutely massive electronics sector in the country, as well as its shipbuilding and machinery sectors.

Like Japan, South Korea needs to import a lot of oil, but relatively speaking, its not as much. South Korea’s machinery imports are larger than its oil imports, if you combine all types of machinery.

Machinery is the main export, followed by automotive products, as well as ships and boats. It also has a big iron and steel sector.


Although the US has in the past criticised Malaysia for its financial policies, it remains one of the country’s biggest trade partners.

Malaysia has a good amount of oil to export, and the sector vies with electrical machinery, including computers, for top export.

It’s a similar picture when it comes to imports, although plastics makes an appearance near the top, as does vehicles.


America’s southern neighbor has grown very fast in the past decade and is now one of the world‘s leading manufacturing nations, welcoming a global automaker almost every year.

Audi has set up what is considered to be its most advanced manufacturing plant outside Germany in Mexico. And it’s probably quite well known that Mexico exports a huge number of cars to its northern neighbor.

In a recent development, Trump has apparently renegotiated Nafta with Mexico. It‘s not clear where this leaves Canada and Nafta itself, but talks and trade are ongoing.

Vehicles, unsurprisingly, are Mexico’s biggest export, followed by machinery and a significant amount of oil. Furniture, plastics and agricultural products also earn big money.

Machinery accounts for Mexico’s biggest import spend, with iron and steel also figuring prominently.

New Zealand

One of the most remote countries in the world, New Zealand is even more down under than Australia, and has a population of less than 5 million.

It’s well known for its agricultural sector and its biggest exports include dairy products, eggs and honey, as well as meat. Along with wood and fruits and nuts, these account for almost $20 billion in revenues.

Machinery exports account for about $1 billion.

Vehicles are its biggest import, followed by machinery and oil.

Large parts of the country are mountainous and the country has good transportation links with its neighbor across the water Australia. These would be among the reasons why it imports a lot of aerospace products.

Papua New Guinea

We might not know much about this place, but it seems it has a larger population than New Zealand, with more than 8 million.

Located north of Australia, across about 200 kilometres of water, Papua New Guinea shares a border with Indonesia.

It exports around $5 billion worth of oil, as well as several billion dollars’ worth of mining goods, such as gems, precious metals and ores. Forestry products are also a big export.

It probably follows, then, that the country imports a relatively large amount of machinery and fuel.


Home to some of the most mysterious megalithic structures in the world, Peru probably earns a huge amount in tourism, which counts as exports.

In fact, tourism earns Peru more than $4 billion a year, a figure which is rising steadily.

Other exports include mining products, such as gems and ores, and oil. These sectors together earn the country almost $30 billion a year.

Its largest imports are oil, chemicals and plastics, and color television sets.

The Philippines

The Philippines’ economy probably has the most room to grow since other countries in the region have become large trading partners for the big nations – the US, China, India and so on.

Geographically, it’s a large country, and it has a population of just over 100 million. Its GDP places it around the middle of this list, but it could be argued that its strategic location provides advantages that it may not have yet maximized.

The country’s main exports are machinery and electrical items, accounting for more than 50 percent of total revenues earned.

Its imports are also mainly machinery related, with vehicles and iron and steel figuring prominently. As well as oil, of course.


Russia is so massive it not only qualifies as an Asia-Pacific country but also a European country. But while Russia is not in the European Union, it has found a place in Apec, unlike India, which was rejected because it doesn’t have a Pacific coastline.

Most people probably think Russia’s main exports are oil and gas – and they’d be absolutely correct. Mineral fuels account for almost half of all export revenues.

Iron, steel and other metals are also big export earners, as are precious gems – Russia being home to probably the largest natural reserve of diamonds in the world.

Machinery is also a big export, and so is agricultural products.

Its imports are mainly machinery and vehicles, with pharmaceuticals, plastics and aerospace also figuring prominently.


Like Hong Kong, Singapore is a tiny island nation, although probably more independent. Both are known as great financial centres, but they also have large industrial sectors as well.

Singapore imports more machinery than it does oil. Other significant imports include gems, aerospace products and plastics.

Its exports are similar – mainly machinery and gems, but also some mineral fuels including oil.

Perhaps notably, Singapore also imports a lot of cosmetics and pharmaceuticals.

Chinese Taipei

Apec lists this country as Chinese Taipei whereas most people might know it as Taiwan. The political reasons for this naming anomaly is beyond the scope and brainpower of this writer, so I’ll just leave it there, and call the place Taiwan.

Taiwan has long been known as a hub for electronics products and its among its many famous companies is Foxconn, the contract manufacturer which makes Apple products and has been investing in manufacturing operations in the US.

Predictably, Taiwan exports a lot of machinery including computers, and plastics. Together these sectors account for more than 50 per cent of foreign exchange earnings.

Electrical equipment is also Taiwan’s biggest import, followed by oil and chemicals, as well as iron, steel and plastics.


Thailand is fast becoming one of the most advanced manufacturing nations in Asia, and has attracted a large number of automakers and computing device manufacturers to the country.

Its main imports are machinery and oil. Precious metals as well as iron and steel are also among the top imports.

Automotive products figure prominently in its exports, as does machinery. Other big exports include rubber products and gems and precious metals. Seafood also brings in significant revenues.

United States

Still the biggest economy in the world, although some may argue with that, the US is probably the reason why Apec was established in the first place.

US companies needed a more structured approach to outsourcing and finding the best places to set up manufacturing operations, and to that extent, Apec has probably been useful.

Apec facilitated the creation of a co-operative environment in which long-term plans could be made and big investments placed in countries that would otherwise not have been on the list.

However, with China growing so fast and vying with the US for top position, large sections of the American electorate are looking for ways to regain their clear lead, and many think leaving trade blocs such as Apec is the way to do it.

Statistics about US-Apec trade are provided above, in an earlier section of this article.


Vietnam is probably one of those countries which has benefited most from being in Apec. The country has seen significant investment from the US, and is now a hub of advanced manufacturing activity.

More than 40 percent of Its total export revenue comes from machinery sales, something that may have been unimaginable a couple of decades ago.

The country is also a huge exporter of apparel.

Its imports are similar – machinery, plastics and oil, with metals and vehicles following.

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