Chile cancels APEC hosting amid ongoing protests

Chilean President Sebastian Pinera announced Wednesday that Chile has canceled the Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting scheduled for Nov 16-17 because ongoing protests have taxed the country's security forces.

Pinera also canceled a United Nations climate change conference (COP 25) scheduled for December.

"We understand perfectly the importance of APEC and COP for Chile and the world, but we have based our decision on common sense," Pinera said in the announcement. "A president needs to put its people above everything else."

This is the first cancellation of an APEC leaders forum since the annual event was initially launched in 1993 in Seattle. Both China and the United States were expected to sign a "phase one" trade deal at APEC. However, the cancellation appears to not affect that plan.

White House spokesman Hogan Gidley said in a statement that Trump is still planning to finalize a phase-one deal during the same timeframe of APEC.

"As of now, it appears APEC will not occur in Chile, and it's our understanding the organization does not currently have a secondary site prepared. We're awaiting potential information regarding another location," Gidley said.

"We look forward to finalizing Phase One of the historic trade deal with China within the same time frame, and when we have an announcement, we'll let you know," Gidley added.

Chile's decision will result in extensive flight cancellations from about 20 participating countries to the capital Santiago.

An US airline customer service representative, when asked about ticket refunds, said many customers called to either cancel their flights to Santiago or change to other destinations.

Chile's protest, ignited by a subway fare increase in Santiago more than two weeks ago, has turned into ongoing civil protests against the high cost of living and income inequality. The protests later turned violent, leading to property damage and the deaths of 19 people so far.

Guan Jintao, president of the Chile-China Trade and Economic Development Association in Santiago, worries about the possible impact of the ongoing protests and the cancellation of APEC on Chile's economic development and its economic relations with China and other countries.

"Chile was the first Latin country to sign a free trade agreement with China. It's also the first Latin country to upgrade its free trade agreement with China this year, with 98 percent products listed as tariff-free.

"We have spent years to build a good relationship between China and Chile. China has become Chile's number one exporter and importer. Now all these might be negatively impacted if the order can't be restored," Guan said.

Last year, Chile imported $15.1 billion in goods from China and exported $24.5 billion worth to China. Besides mining products, Chile also exports many agricultural products and meat to China.

"Chile's fruit accounted for 20 percent of total imported fruit in China last year; that's how much Chile is exporting to China. Chile's cherries are especially popular there."

October is the harvest season for cherries, but a lot of cherry exporters could not load their product at port the past couple of weeks because the protests paralyzed the transportation system and caused businesses to shut down, Guan said.

The unrest also could affect investment to Chile down the road, Guan said. Chile has been incorporated into China's Belt and Road Initiative (BRI) as one of its Latin American hubs. That has helped Chile to attract significant investment from both China and other countries.

"I hope the cancellation of APEC will help the government to deal with the situation, and people will calm down," Guan said. "If the situation keeps worsening, it will bring uncertainty to Chile. The investors might take a wait and see approach instead of moving forward with their investment. This could pull back Chile's economy."