Asia-Pacific leaders said the economic recovery isn’t on a “solid footing” yet, pledging to maintain stimulus measures until there is “durable” growth.
Economies must shift toward a more balanced expansion strategy in the aftermath of the global crisis and cannot return to “growth as usual,” the leaders from the 21-member Asia-Pacific Economic Cooperation group said Sunday in a statement. APEC will also take steps and determine ways to realize its vision of a regional free trade area, they said.
“Our robust policy responses have helped to set the stage for recovery,” the leaders said. “But economic recovery is not yet on a solid footing. We will maintain stimulus policies until a durable economic recovery has clearly taken hold.”
Policy makers are moving to unwind some of the emergency steps they took to counter the world recession after cutting interest rates and outlaying more than US$2 trillion in government expenditure. APEC leaders this week said fiscal and monetary stimulus measures need separate exit strategies and timing, as countries seek a balance between protecting nascent growth and preventing asset bubbles.
The statement did not mention currencies. APEC finance ministers earlier this week called for market-oriented exchange rates. The call comes as pressure rises on China, the world’s third-largest economy, to abandon its currency’s fix to the dollar maintained since July 2008.
‘Not yet solid’
“The profound impact of the international financial crisis still persists,” China’s President Hu Jintao told APEC leaders in Singapore Sunday. “The foundation is not yet solid for the world economic upturn.”
APEC was set up in 1989 to advance trade in the region. The group faces “political” hurdles in its long-term vision to form a region-wide free trade area, Singapore Prime Minister Lee Hsien Loong said Saturday.
The US said Saturday it will enter into discussions with the four countries that are part of the Trans-Pacific Strategic Economic Partnership Agreement, an accord aimed at removing trade barriers among its members.
APEC is already falling behind on some goals even as it strives for other agreements. Members in 1994 signed the so-called Bogor Declaration, pledging to create free and open trade in the group’s developed economies by 2010 and in its emerging economies by 2020.
Bogor goals
“We reaffirm our commitment to the Bogor Goals of free and open trade and investment,” the leaders said. “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.”
APEC’s developed members should adhere to the group’s goal for free trade by next year, Chinese Commerce Minister Chen Deming said Nov. 13. Singapore’s Lee has said that next year’s target is not likely to be met.
Leaders also pledged to “exercise all possible flexibility” to accelerate negotiations and complete the eight-year-old World Trade Organization’s Doha Round of talks in 2010.
“We strongly reaffirm that 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 Doha in 2010,” they said.
Climate change
APEC leaders reaffirmed their commitment to reaching an “ambitious outcome” on climate change in Copenhagen next month.
An earlier draft of the statement said global emissions will need to peak over the next few years and be reduced to 50 percent below 1990 levels by 2050, with a later timeframe for peaking in developing countries. The final statement excluded that reference.
APEC’s biggest economies are the US, Japan and China. Other members are Australia, Brunei, Canada, Chile, Hong Kong, Indonesia, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, and Vietnam.
Source: Bloomberg