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Asia-Pacific nations pledge to boost growth, fret over economy

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Sept. 9, 2012, 11:08 a.m. | World — by Reuters

APEC Economic Leaders during an official photo session. Front row, from left: Australian Trade Minister Craig Emerson, Russian President Vladimir Putin and the Sultan of Brunei Darussalam Haji Hassanal Bolkiah Mu'izzaddin Waddaulah. Second row, from left: Peruvian President Ollanta Humala, New Zealand Prime Minister John Key and Mexican President Felipe Calderon.
© (www.apec.ru)

Reuters

VLADIVOSTOK, Russia, Sept 9 (Reuters) - Asia-Pacific nations including China, the United States and Japan promised measures to boost growth on Sunday and rejected limits on food exports to try to revive the flagging global economy.

Countries on the Pacific Rim ended a two-day summit on an island off the Russian port city of Vladivostok by expressing concern about the state of the world economy, global food security and growing signs of protectionism.

The 21 members of the Asian-Pacific Economic Cooperation (APEC) group agreed to slash import duties on "green technology", take steps to bolster growth and liberalise trade to counter problems heightened by Europe's debt crisis.

"The financial markets remain fragile, while high public deficits and debts in some advanced economies are creating strong headwinds to economic recovery globally. The events in Europe are adversely affecting growth in the region," they said.

"In such circumstances, we are resolved to work collectively to support growth and foster financial stability, and restore confidence."

APEC, which also groups Malaysia, Indonesia, Canada and South Korea, makes decisions by consensus and its moves are not binding. But its influence is growing as Europe's declines.

It accounts for 40 percent of the world's population, 54 percent of its economic output and 44 percent of its trade. In the United States, China and Japan, it has the world's three largest economies.

Despite concern about Europe's debt problems, APEC welcomed European leaders' attempts to resolve the crisis.

International Monetary Fund Managing Director Christine Lagarde, who arrived for the last day of the summit, also signalled support for a European Central Bank plan to staunch the crisis with unlimited bond purchases.

She expressed an interest in the IMF playing a role in the design and monitoring of the ECB plan, under which the central bank would stand ready to buy sovereign debt with maturities of up to three years in return for a bailout deal.

"There's a general sense that the world economy is a little fragile ... but there's confidence that we can get through this," New Zealand Prime Minister John Key told reporters.

The Pacific-Rim countries agreed this must not be done through protectionism. Despite a drought that has hit crops in the United States and Russia, which are global wheat suppliers, they ruled out limiting food exports and underlined the importance of open markets to ensure reliable food supplies.

They also endorsed a list of 54 environmental goods on which import duties will be reduced to no more than 5 percent by 2015, including equipment for renewable energy, waste treatment and environmental monitoring.

US, RUSSIA LOOK TO ASIA

Putin used the summit to grandstand four months after returning to the Kremlin and less than a month after Moscow joined the World Trade Organization (WTO). Underlining Russia's growing status as a wheat supplier, he said Russia would ramp up grain production and more than double exports by 2020.

Russia and the United States are both looking to Asia, where economic growth is relatively strong, in a pivotal turn to boost their economies following the 2008-9 global financial crisis.

"It is absolutely clear that the most important region for economic growth this decade - and probably the next decade - will be the Pacific," said Mexican President Felipe Calderon.

Hosting the summit on an island linked to the mainland by a spectacular new $1-billion bridge, a symbol of Moscow's decision to look east, Putin has advertised his vast country at the summit as a gateway for Asia to European markets.

Chinese President Hu Jintao promised that his country, Asia's dominant economic force, would rebalance its economy to secure stable and robust growth after a slowdown that has hit the entire region.

In a sign of Russia's intent, state-controlled gas monopoly Gazprom signed an agreement with Japan to develop plans for a $7 billion liquefied natural gas plant on Russia's Pacific coast.

For his part, Hu spelled out a plan to pump $157 billion into infrastructure investments in agriculture, energy, railways and roads in China.

Businessmen who met on Vladivostok's Russky Island before the summit welcomed Hu's plan. Others, such as Scott Price, CEO and president of Walmart Asia, said China still offered huge upside potential despite its slowing growth.

"When a car stops going at 100 miles an hour and only goes 69, it's still going pretty fast. A Chinese economy growing at 7.5 percent is still a very attractive market," he said.

Despite pledging to "build bridges, not walls" to trade and investment, China and Russia have also been challenged by Europe over trade practices it regards as limiting free competition. Europe is investigating whether Gazprom's pricing policies are fair but Putin ruled out any talk of a trade war with Europe.

Cooperation in APEC is hindered by territorial and other disputes among some members. Hu and Japanese Prime Minister Yoshihiko Noda met briefly on the sidelines of the summit but details of the talks were not immediately available.

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