APEC to Maintain Stimulus Until 'Durable' Recovery
Nov. 15 (Bloomberg) -- Asia-Pacific leaders said theeconomic recovery isn’t on a “solid footing” yet, pledging tomaintain stimulus measures until there is “durable” growth.
Economies must shift toward a more balanced expansionstrategy in the aftermath of the global crisis and cannotreturn to “growth as usual,” the leaders from the 21-memberAsia-Pacific Economic Cooperation group said today in astatement. APEC will also take steps and determine ways torealize its vision of a regional free trade area, they said.
“Our robust policy responses have helped to set the stagefor recovery,” the leaders said. “But economic recovery isnot yet on a solid footing. We will maintain stimulus policiesuntil a durable economic recovery has clearly taken hold.”
Policy makers are moving to unwind some of the emergencysteps they took to counter the world recession after cuttinginterest rates and outlaying more than $2 trillion ingovernment expenditure. APEC leaders this week said fiscal andmonetary stimulus measures need separate exit strategies andtiming, as countries seek a balance between protecting nascentgrowth and preventing asset bubbles.
The statement did not mention currencies. APEC financeministers earlier this week called for market-oriented exchangerates. The call comes as pressure rises on China, the world’sthird-largest economy, to abandon its currency’s fix to thedollar maintained since July 2008.
‘Not Yet Solid’
“The profound impact of the international financialcrisis still persists,” China’s President Hu Jintao told APECleaders in Singapore today. “The foundation is not yet solidfor 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 visionto form a region-wide free trade area, Singapore Prime MinisterLee Hsien Loong said yesterday.
The U.S. said yesterday it will enter into discussionswith the four countries that are part of the Trans-PacificStrategic Economic Partnership Agreement, an accord aimed atremoving trade barriers among its members.
APEC is already falling behind on some goals even as itstrives for other agreements. Members in 1994 signed the so-called Bogor Declaration, pledging to create free and opentrade in the group’s developed economies by 2010 and in itsemerging economies by 2020.
Bogor Goals
“We reaffirm our commitment to the Bogor Goals of freeand open trade and investment,” the leaders said. “We directministers and officials to report to us next year with ameaningful assessment of the industrialised APEC economies’achievement of the Bogor Goals.”
APEC’s developed members should adhere to the group’s goalfor free trade by next year, Chinese Commerce Minister ChenDeming said Nov. 13. Singapore’s Lee has said that next year’starget is not likely to be met.
Leaders also pledged to “exercise all possibleflexibility” to accelerate negotiations and complete theeight-year-old World Trade Organization’s Doha Round of talksin 2010.
“We strongly reaffirm that the most effective means ofdealing with protectionist pressures and delivering a globalstimulus package to sustain and secure our recovery is anambitious 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 nextmonth.
An earlier draft of the statement said global emissionswill need to peak over the next few years and be reduced to 50percent below 1990 levels by 2050, with a later timeframe forpeaking in developing countries. The final statement excludedthat reference.
APEC’s biggest economies are the U.S., 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.
To contact the reporters on this story:Shamim Adam in Singapore at sadam2@bloomberg.net
Last Updated: November 15, 2009 00:25 ESTSource: Bloomberg
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