APEC urges new growth model, climate pact progress

AP News
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Posted: Nov 15, 2009 11:50 AM

Open trade and people-centered strategies are key for sustained, stable growth, President Barack Obama and Asia-Pacific leaders said Sunday, pledging to persist with stimulus spending until a global recovery is assured.

The leaders wrapped up the annual meeting of the 21-member Asia-Pacific Economic Cooperation forum with a joint pledge to resist protectionism. They also endorsed policies to encourage more environmentally friendly growth that is "balanced, inclusive and sustainable, to ensure a durable recovery that will create jobs and benefit our people."

Growth led mainly by American consumption and borrowing and Chinese exports is not sustainable in the long term, Lee Hsien Loong, Singapore's prime minister, told reporters. Neither is relying on debt-backed stimulus spending to spur demand.

"We know that the old formulas are not going to work as well in the future because it's a different world," he said. "You have to find another balance."

But despite calls for faster progress in world trade talks and efforts to craft a worldwide global warming treaty, the leaders offered no specific, new initiatives for either one _ typical of the forum's nonbinding nature.

The World Wildlife Fund's Global Climate Initiative expressed disappointment that an earlier push for a 50 percent reduction in greenhouse gas emissions from 1990 levels by 2050 was omitted from the leaders' final statement.

"Leaders have to take the bull by the horns, and finally tackle the difficult questions, instead of constantly avoiding them," spokeswoman Diane McFadzien said in a statement.

The leaders, who met over breakfast to discuss global warming, committed only to working toward "an ambitious outcome" at climate talks in Copenhagen, Denmark, next month.

But Lee said he believed some countries were holding their cards for later. "This is not an occasion for negotiating climate change," he said.

The annual meeting of APEC, which was founded 20 years ago to promote closer economic ties in the diverse, wide-flung region, focused mainly on ways to ensure the recovery from the worst economic crisis since the 1930s takes hold and endures.

The overriding concern is to end imbalances in trade, investment and growth that are viewed as the underlying causes of the global financial meltdown.

"The intrinsic problems of the world economic system are yet to be solved at the source, and the effort to fully restore world economic growth is beset by uncertainties and destabilizing factors," Chinese President Hu Jintao said in a speech to fellow leaders Sunday.

"We should use the financial crisis as an opportunity to take a serious look at its root causes," said Hu, whose country expects growth of at least 8 percent this year and was widely credited by other APEC leaders with spearheading the global recovery.

Leaders pledged to pursue reforms that will "gradually unwind global imbalances," and also to put in place regulatory policies that will prevent credit and asset markets from becoming "forces of destabilization."

As it assessed progress on dismantling regional barriers to trade and investment, the group won backing for its long-term goal of creating a free-trade area covering all 21 APEC economies.

Underscoring the American commitment to a region increasingly dominated by China, now the world's third-largest economy and a growing political and military player, Obama announced Washington's interest in joining the Trans-Pacific free-trade partnership.

For now, the gesture is largely symbolic: the grouping now includes only four countries, and Obama's administration has put off work on free-trade pacts with South Korea, Colombia and Panama while it deals with domestic economic troubles and the war in Afghanistan, among other issues.

Washington is embroiled in disputes with China over trade in tires, steel and autos, among other products, and is pushing Beijing to loosen controls that it says keep the Chinese currency, the yuan, undervalued.

The yuan's weakness is unwelcome for many countries in the region that compete with Chinese export manufacturers. But the APEC leaders did not mention currency rates in their final statement, despite an earlier call by finance ministers for maintaining "market-oriented exchange rates."

Later Sunday, Obama headed to China, with a first stop in Shanghai, the mainland's commercial and financial capital.

Earlier, he joined a summit with all 10 leaders of the Association of Southeast Asian Nations, including military-ruled Myanmar. In the unusual face-to-face encounter, Obama told Myanmar's Prime Minister Gen. Thein Sein to free pro-democracy leader Aung San Suu Kyi.

A joint statement issued after the summit _ the first ever between a U.S. president and ASEAN _ devoted an entire paragraph to Myanmar, a major irritant in relations between the two sides.

It urged Myanmar to ensure that 2010 elections are "free, fair, inclusive and transparent," but did not call for the release of political prisoners.

Obama also announced that after next year's APEC forum in Yokohama, Japan, he will host the 2011 gathering in his native Hawaii.

"I look forward to seeing you all decked out in flowered shirts and grass skirts," he told the leaders Sunday.

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Associated Press writers Mark S. Smith, Vijay Joshi, Jim Gomez and Alex Kennedy contributed to this report.