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ASIA-PACIFIC ECONOMIC COOPERATION
Apec leaders stress need for reforms
Agencies

Trade deals seen as key to global recovery as economic giants struggle with internal battles

BALI, Indonesia - FIGHTING protectionism and pushing through difficult reforms are critical to global recovery as the world's biggest economies struggle with their own internal obstacles to growth, Asia-Pacific leaders gathered for an annual summit said yesterday.

National leaders at the annual summit of the Asia-Pacific Economic Cooperation forum (Apec) were watching to see how the biggest economies fare. US President Barack Obama cancelled his trip to the Apec meeting because of the budget impasse.

"Obviously we prefer a US government which is working to one which is not," said Singapore Prime Minister Lee Hsien Loong. "It's a very big disappointment to us that President Obama is unable to visit."

Lee pointed to US internal battles, Europe's lingering financial crisis, China's reform challenges and Japan's effort to emerge from more than two decades of stagnation, as key risks to global growth.

"America has to continue to be engaged in this region, because it plays a very important role that no other country can replace - not China, not Japan - nor any other power," Lee said.

Obama is adamant that Republicans agree to raise the $16.7 trillion (Bt521.87 trillion) US statutory borrowing limit - without which Washington could default on its debts for the first time ever starting on October 17.

With public discontent building, the US House of Represen-tatives held a rare meeting on Saturday and voted 407 to 0 to pass a measure to retroactively pay the hundreds of thousands of federal workers forced to stay home during the crisis. US Defence Secretary Chuck Hagel announced promptly that most of the estimated 400,000 furloughed Pentagon employees will be called back to work next week. Due to the shutdown on October 1, over 800,000 federal workers were sent home.

In Bali, Commerce Secretary Penny Pritzker warned that the impact of the shutdown was affecting the global business sector and the vital collection of economic data. One big problem was that businesses could no longer access vital data about the economy that is normally posted on the commerce department website. "The shutdown is not good for business and it's not good for the American economy - it's something that we need to get over," she said.

The US is seeking a deal by year-end on the 12-nation Trans-Pacific Partnership (TPP). The countries involved in the negotiations have reached an agreement on some of the sticking points, Pritzker said. The 12 countries involved in the TPP talks on the sidelines of the Apec meeting are the United States, Australia, New Zealand, Japan, Singapore, Malaysia, Brunei, Vietnam, Chile, Canada, Mexico and Peru.

In Bali, Indonesian President Susilo Bambang Yudhoyono urged the more than 1,200 business and political leaders to do more to counter the economic headwinds confronting developing countries by dismantling barriers to trade and investment.

Trade deficits, capital flight and weakening currencies threatened to undo progress among developing economies in the region against the backdrop of a fragile global recovery.

"Apec is in the ideal position to help the recovery of the global economy," said Yudhoyono, emphasising the importance of preventing protectionism and of opening markets further to maximise prosperity.

The 21 economies in Apec hope to reach agreement on some reforms that might help break a logjam in world trade talks ahead of a WTO meeting in Bali in December.


-- The Nation 2013-10-07