Asia-Pacific leaders warn of mounting protectionism
  • This Section
  • Latest
  • Web Wrap
Last Updated: Saturday, November 14, 2009, 10:51
  
Singapore: Singling out the United States for trends "going in the opposite sense of free trade" Mexican President Felipe Calderon said on Saturday trade protectionism is a major threat to the global economic recovery.

Many countries were moving toward protectionism in practice even as they gave lip service to free trade in principle, Calderon suggested.

That was a theme of many speakers at the meeting of the 21-member Asia Pacific Economic Cooperation forum, including the leader who followed Calderon to the podium, Russian President Dmitry Medvedev.

In Mexico's neighbour the United States, "the old wrong idea of protectionism" was emerging in Congress and among other policymakers, Calderon said, citing as an example increasing "buy American" clauses in US legislation.

In a global economy of multinational companies, such policies do more harm than good, Calderon said arguing: "protectionism is killing North American companies".

US President Barack Obama was due to arrive in Singapore on Saturday evening for the Asia Pacific Economic Cooperation summit after an overnight visit to Japan, where he also pledged support for trade liberalisation.

But Obama said he will call at the APEC summit for a new strategy to rebalance the world economy, which will mean that America will have to save more and spend less, reform its financial system, and reduce long-term deficits and borrowing.

"It will also mean a greater emphasis on exports that we can produce, and sell all over the world."

Safeguard Measures

But Obama may get an earful at Sunday's summit on the theme of protectionism.

China's Commerce Minister said pointedly at an APEC business gathering on Friday that use of so-called safeguard measures by a "a certain large country" violates international pledges against the United States.

Chen Deming did not specifically name the United States, which recently for the first time invoked safeguard measures, agreed to by China when it joined the World Trade Organization, against imports of Chinese tyres.

Chinese President Hu Jintao came to the summit earlier in the week, and on Friday urged an end to "unreasonable" trade restrictions by developed countries on developing countries.

China's policy of pegging the yuan currency to a weakening dollar, making Chinese exports comparatively cheaper, has also come under fire at the meeting.

Obama has said he will raise the currency issue on a visit next week to China.

China's central bank said earlier this week it will consider major currencies in guiding the yuan , suggesting a departure from the peg. China also signed an APEC finance ministers’ statement on Thursday that promised "monetary policies consistent with price stability in the context of market-oriented exchange rates", but other APEC members downplayed the likelihood that China would significantly change its policies anytime soon.

Continuing Stimulus Policies

Australian Prime Minister Kevin Rudd, urged leaders not to give up the quest for a global trade deal in the Doha round of negotiations.

"If we do not, then frankly we are denying ourselves globally an additional trillion dollars in economic activity," Rudd told a news conference on Saturday. "Doha has the potential to unleash a further increment of global growth."

US Special Trade Representative Ron Kirk harped on the same theme at Saturday's APEC business leaders meeting.

"APEC economies have both the trading power and the collective potential to stimulate recovery and move global trade in the right direction, away from protectionism and toward a stronger, more open rules-based system," Kirk said.

Aside from endorsing further moves toward free trade, the 21 leaders of APEC, which accounts for more than half of global output and 40 percent of world trade, will agree to stick with economic stimulus policies until "a durable economic recovery has clearly taken hold", according to a draft declaration to be issued at the end of the summit.

Much attention on Sunday, the summit's final day, will focus on Obama. Some participants feel the administration of George W Bush gave insufficient attention to the region, a point Obama addressed in Japan without mentioning his predecessor.

"I know that the United States has been disengaged from these organisations in recent years. So let me be clear: those days have passed ... the United States expects to be involved in the discussions that shape the future of this region, and to participate fully in appropriate organisations."

Bureau Report


First Published: Saturday, November 14, 2009, 10:51


comments powered by Disqus