Pacific rim leaders mull ways to fend off EU woes

Associated Press
U.S. Secretary of State Hillary Clinton, right, talks with Australian Foreign Minister Kevin Rudd during a dinner with APEC ministers at the Asia-Pacific Economic Cooperation summit Thursday, Nov. 10, 2011, in Honolulu. (AP Photo/Andres Leighton)
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HONOLULU (AP) — A push to build a Pacific free trade bloc gained ground Friday with Japan's decision to join negotiations, as Asia-Pacific leaders converging on Hawaii for an annual summit mulled ways to prevent Europe's crisis from derailing the global recovery.

The weekend meeting of the 21-member Asia-Pacific Economic Cooperation forum, which brings together leaders from Russia to Chile, is focused on creating jobs and business through nuts-and-bolts measures such as investment in infrastructure and reforms aimed at providing more access to financing for the poor.

Such moves are gaining urgency, with the European Union warning of a possible "deep and prolonged recession" next year as the debt crisis that has engulfed Ireland, Portugal and Greece shows signs of spiraling out of control. A European recession would be felt sharply in the U.S., where growth is already anemic, and in Asia, which relies on Europe as a big market for its cars, clothing, consumer electronics and other exports.

"In the coming 12 months there is quite a strong likelihood that things will go worse," Hong Kong's chief executive, Donald Tsang, told a gathering of business leaders on the sidelines of the APEC meetings. "Global performance will be dragged down and then there will be an awakening, I hope," he said.

U.S. Secretary of State Hillary Clinton said in opening a meeting of foreign and economic ministers that many forces outside the Pacific region will have an impact on it. "Global trends and world events have given us a full and formidable agenda," she said. "And the stakes are high for all of us."

As host of the annual summit, the U.S. has made expanding trade, promoting green growth and deepening cooperation on regulation and standards to help dismantle barriers to trade and nurture faster growth.

"We've even created an unofficial slogan: 'Get Stuff Done," Clinton said.

The U.S. also is hoping to garner support for a Pacific free trade pact that many APEC members see as a building block for a free trade area that encompasses all of Asia and the Pacific, covering half the world's commerce and two-fifths of its trade.

That goal advanced Friday with Japan's announcement that it will seek to join the bloc, called the Trans-Pacific Partnership, despite strong opposition from farmers fearful of exposure to greater foreign competition.

The Pacific trade pact, known as the TPP, currently includes Chile, New Zealand, Brunei and Singapore — all relatively small economies. The U.S., Australia, Malaysia, Vietnam and Peru are negotiating to join. The participation of Japan, the world's third-largest economy, would vastly expand its reach.

At the same time they are working toward a broader agreement, countries continue to forge separate free-trade agreements. On Friday, Vietnam and Chile were to due to sign a free trade agreement on the sidelines of the APEC meetings.

The U.S. recently clinched long-sought free trade pacts with South Korea, Colombia, and Panama — agreements that if ratified will bring to 20 the number of countries that have free trade agreements with the U.S.

In Honolulu, Washington was keeping up pressure on China to commit to faster trade liberalization and to freeing its currency, which U.S. officials say remains undervalued even though it has gained substantially against the U.S. dollar in recent years.

A statement by APEC finance ministers released Thursday included a call for exchange rate flexibility. Treasury Department officials said China's willingness to back such a commitment — both at the Group of 20 meeting in Cannes last week and in Honolulu this week — could encourage similar moves by other Asia-Pacific economies.

But Beijing's apparent openness to move faster on its currency policy was not matched by similar support for the Trans-Pacific Partnership, which earlier this week a senior official in Beijing described as "overly ambitious."

Overall, given APEC's lack of negotiating power — all decisions are by consensus — prospects for major changes are slim. But over the years the group's incremental efforts have helped build support for closer economic ties and freer trade.

Clinton said that by agreeing on something as rudimentary as shared safety standards for televisions, countries in the region saw exports of TVs jump by nearly half in three years.

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Associated Press writer Jaymes Song contributed to this report.

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