Reuters | Nov 19, 2008
APEC leaders to push trade as way out of crisis
By Terry Wade
LIMA (Reuters) — The United States, China, Japan and some emerging economy heavyweights will push for quick action on free trade deals at a summit meeting this weekend as an antidote to a looming recession in much of the world.
One idea gaining traction ahead of the Asia Pacific Economic Cooperation meeting in Peru is to forge a regional free-trade zone from existing bilateral pacts of APEC’s 21 members, a diverse lot that also includes Russia, Mexico, Australia, Canada and Indonesia.
Leaders of the world’s biggest economies last week called for rapid economic stimulus packages to stabilize financial markets and for new efforts to reach a global free trade deal.
President George W. Bush and the leaders of other APEC countries, which together account for more than half of global economic output, will use their summit to push again for a deal under the so-called Doha round of world trade talks.
Despite repeated calls for a deal, the trade talks have lurched from one crisis to another over the past seven years, so APEC leaders may also try to move along regional or bilateral agreements.
Canada’s trade minister, Stockwell Day, says his government supports "trade liberalization through the World Trade Organization and through regional and bilateral agreements."
An APEC free trade deal would take several years to seal and regional trade pacts may not be a priority for U.S. President-elect Barack Obama. But a regional agreement could be easier to reach because it would not include India, Brazil and the European Union.
Leaders will meet in Peru’s fortified defense ministry and 39,000 police will patrol the coastal capital Lima to prevent an attack by the left-wing Shining Path insurgency, which has struck four times since last month in the Andean highlands.
The heads of state will issue a statement on the international financial crisis at the end of their two-day summit on Sunday.
Nine of the APEC members also belong to the G20 group of leading economies which last week agreed to take fiscal stimulus measures to stave off a deep recession.
The G20 nations said the International Monetary Fund needs more money to help emerging economies through the global crisis, and also promised a review of accounting standards, credit rating agencies and risky derivatives trading.
But specific measures were not announced and some tough decisions will be left until after Obama takes power in January.
Patricia Haslach, the U.S. ambassador to APEC, said the Peru meeting would mainly push for advances on trade talks, leaving bigger financial issues to a more global forum.
"(The G20) was focused on the financial situation. APEC is going to be focusing on the trade side," she said.
Some small countries dependent on export revenues fear that big economies, faced with recession, will turn inward. They want APEC members to go further than the G20, which agreed to avoid raising trade barriers over the next 12 months.
"What worries me is that despite what the G20 says, it doesn’t have the heart or mind to understand how the problems of protectionism and state-centered development would affect us," Peruvian President Alan Garcia said.
Peru’s economy has grown for seven years, helped by China’s voracious appetite for the Andean country’s copper, zinc and iron ore. The two countries will announce they have reached a bilateral trade deal at the APEC meeting this weekend.
(Additional reporting by Louise Egan in Ottawa; Marco Aquino and Dana Ford in Lima; Editing by Fiona Ortiz and Kieran Murray)