Mon, November 16, 2009
World > Asia-Pacific > President Hu visits 2 nations, attends APEC summit

APEC leaders chart roadmap for post-crisis landscape

2009-11-16 02:10:26 GMT2009-11-16 10:10:26 (Beijing Time)  Xinhua English

SINGAPORE, Nov. 15 (Xinhua) -- Leaders of the 21-member Asia-Pacific Economic Cooperation wrapped up their two-day annual meeting here by issuing a declaration, pledging to pursue a new growth pattern in the post-crisis era.

"We cannot go back to 'growth as usual' or 'trade as usual'," the leaders said in the declaration, noting "the post-crisis landscape will be different."

The leaders said they will pursue growth that is "balanced, inclusive, and sustainable," vowing to put in place next year "a comprehensive long-term growth strategy."

"Our statement expresses our determination to implement a long-term growth strategy," Lee Hsien Loong, prime minister of Singapore, told a news briefing after the summit.

The APEC represents about 55 percent of the world's economic output, 45 percent of global trade and 40 percent of the world's population.

RESHAPE GROWTH PATTERN

The APEC leaders' meeting of this year was convened at a time when the world economy began to recover, but the outlook is uncertain.

Economists said that the worst is over, but the recovery is weak mainly due to still dampened demand in the region. A relapse or another dip is possible, they warned.

The main engine of demand in the world over the last dozen years had been consumers in the U.S., said Stephen Roach, chairman of the Morgan Stanley Asia.

"But now you have to forget about that," he said, noting that the consumption model in the U.S. is not on a sustainable basis.

"We will pursue growth which is balanced, inclusive and sustainable, supported by innovation and a knowledge-based economy, ensure a durable recovery," the leaders said in their declaration.

On balanced growth, the leaders said that strong and sustained economic growth will require structural reforms to gradually unwind global imbalances.

The leaders pledged to ensure that their fiscal, monetary, trade and structural policies are consistent with a more sustainable and balanced trajectory of growth.

They also promised to strengthen the environment for private enterprises, investment and innovation.

Inclusive growth is an approach that is anti-protectionist, fueled by market-driven growth and facilitated by government.

Ultimately, inclusive growth empowers individuals so that they are better able to reap the benefits of globalization and to withstand future economic shocks.

"To achieve inclusive growth, we must broaden access to economic opportunities and build the resilience of the most vulnerable against economic shocks," said the APEC leaders.

Sustainable growth mainly focuses on environmental issues. "Future growth must be compatible with global efforts to protect the environment and mitigate climate change," the leaders said.

At the same time, efforts to address climate change must be consistent with each member's international trade obligations, they said.

The leaders reaffirmed their commitment to tackle the threat of climate change and work towards an ambitious outcome in the world climate talks in Copenhagen in December.

"Fixing the economic situation today is like going to the dentist: It hurts a lot, but you know you are investing in the future," said Maria Olivia Recart, Chile's vice finance minister.

And her words were widely echoed by participants to the APEC meetings.

PROMOTE FREE TRADE

To promote free and open trade and investment is APEC's core agenda. Since its founding 20 years ago, much progress has been achieved in opening markets and reducing trade barriers.

Up to date, APEC economies have virtually reduced the average tariff in the region to 5 percent from 17 percent and continue to find ways to reduce trade barriers.

APEC's total trade grew five-fold between 1989 and 2007, an annualized average growth rate of 9.5 percent compared to the world average of 8.9 percent.

However, free trade in the region has faced challenges of growing protectionism after the global financial crisis broke out last year.

The APEC leaders are well aware of the danger of protectionism, fearing that it could lead to a full-scale trade war that will not only dampen the hope of recovery but also shatter the basis the APEC is built upon.

"We firmly reject all forms of protectionism and reaffirm our commitment to keep markets open and refrain from raising new barriers to investment or to trade in goods and services," said the leaders in the declaration.

They said, "the most effective means of dealing with protectionist pressures and delivering a global stimulus package to sustain and secure our recovery is an ambitious and balanced conclusion to the Doha Development Agenda (DDA) in 2010."

Despite that the road to Doha is bumpy, the leaders' statement at least gave some relief to business people in the region at the moment.

ACCELERATE REGIONAL INTEGRATION

Regional economic integration is a major goal for the APEC. And the key to achieving the vision is what are referred to as the 'Bogor Goals', adopted by APEC leaders at their 1994 meeting in Bogor, Indonesia.

According to the Bogor Goals, industrialized economies should achieve the goal of free and open trade and investment no later than 2010 and developing economies no later than 2020.

Nevertheless, no actions seem to have been taken by any developed member economy, casting a shadow on the integration process of the region.

In their declaration, the APEC leaders reaffirm their commitment to the Bogor Goals, saying that "We direct ministers and officials to report to us next year with a meaningful assessment of the industrialized APEC economies' achievement of the Bogor Goals."

The leaders also said that they will continue to explore building blocks towards a possible Free Trade Area of the Asia Pacific (FTAAP) in the future.

To further push regional integration, the leaders promise to take "a comprehensive approach that focuses our work on trade liberalization "at the border"; improving the business environment "behind the border"; and enhancing supply chain connectivity "across the border."

Analysts said that if the leaders translate their promise into concrete action, not only the Asia-Pacific region but also the whole world will benefit enormously.

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