Asia-Pacific ministers agreed to extend a freeze on trade barriers and pledged to work toward creating a vast free trade area in the world’s fastest growing region.
But a Group of 20 (G20) summit of major economies in neighbouring South Korea—beset by deep divisions over currencies, monetary policy and global trade imbalances—is towering over the meeting of the 21-member Asia-Pacific Economic Cooperation (APEC) forum in Yokohama, south of Tokyo.
Nine of APEC’s members also belong to the G20, including the world’s biggest economies—China, Japan and the United States. APEC leaders meet in Yokohama at the weekend, immediately after the Seoul G20 summit.
The APEC ministers agreed to extend a freeze on any fresh protectionist measures, which they first agreed at the height of the financial crisis in 2008, for another three years.
They also urged a conclusion to the moribund Doha round of free trade talks by the end of next year.
“While (the) world economy is on its way to recovery, however, there remains a possibility of increasing protectionist pressures in the future,” the statement said.
A Japanese government official said it would send a message about free trade to the G20 meeting.
“(The intention to) create the impetus for trade liberalisation here was shown at a very high level,”, the official said.
APEC ministers also championed a regional strategy of balanced and sustainable growth, an elusive goal at a time when the global economy is divided between cash-rich exporters and debt-burdened importers.
That could feature as well in the G20 summit. U.S. President Barack Obama said on Thursday he expected the summit to outline mechanisms that will deliver broad-based and balanced global economic growth.
The APEC ministers said they would take concrete steps to create a vast Free Trade Area of the Asia-Pacific (FTAAP) in the region, home to 40 percent of the world’s population and 53 percent of global economic output, by building on existing pacts.
Businesses have long urged a single pact for the Pacific rim, where scores of small FTAs have been agreed, to simplify a plethora of standards and rules.
One of the “building blocks” for the FTAAP is a U.S.-led initiative called the Trans-Pacific Partnership (TPP) that would link nine nations, APEC ministers said. Host Japan has said it wants to start talks on the TPP, but has run into fierce opposition from the politically powerful farm lobby.
An Asia-Pacific free trade area would link the world’s top economies with some of its fastest-growing ones such as Indonesia, Thailand and Mexico.
Despite the expected warm words on free trade, security tensions could spill over into the economic realm, while rivalry over resources from oil and gas to rare earth metals risks fuelling strategic conflicts in turn.
Japanese Prime Minister Naoto Kan, his ratings tumbling over his handling of a row with China, is hoping to meet Chinese President Hu Jintao on the sidelines of the APEC summit, but said whether the bilateral talks took place depended on Beijing.
Sino-Japanese relations have soured due to the feud over rival claims to isles near potentially huge gas and oil reserves.
Japan’s ties with Russia also chilled after Russian President Dmitry Medvedev visited another disputed island.
Washington’s ties with Asia are also facing scrutiny as U.S. President Barack Obama, who will arrive in Yokohama following the G20 summit, seeks to boost exports and promote domestic jobs in the wake of his Democratic Party’s devastating election defeat. (Reuters)