Timothy Heritage and Douglas Busvine
Asia-Pacific nations including China, the US and Russia were expected to promise measures to boost growth yesterday and reject limits on food exports to try to revive the flagging global economy.
Leaders of countries on the Pacific rim were expected to end a two-day summit on an island off the Russian port of Vladivostok by expressing concern about the fragile state of the world economy, global food security and growing signs of protectionism.
The 21 members of the Asia-Pacific Economic Cooperation (Apec) group agreed to slash import duties on “green technology”, take steps to bolster growth and liberalise trade to counter problems heightened by Europe’s debt crisis.
“There’s a general sense that the world economy is a little fragile… but there’s confidence that we can get through this,” New Zealand Prime Minister John Key said before talks began on the final day of their summit.
Several countries were worried that moves to crack down on protectionism were “going backwards”, Key said, adding: “The risk is that people will return to a fortress mentality.”
Apec, which also includes Japan, Malaysia, Indonesia, Canada and South Korea, makes decisions by consensus and its moves are not binding. But its influence is growing as Europe declines.
Its members account for 40 percent of the world’s population, 54 percent of its economic output and 44 percent of its trade.
Despite a drought that has hit crops in the US and Russia, which are global wheat suppliers, the leaders agreed not to limit food exports and underlined the importance of open markets to ensure reliable food supplies.
They also endorsed a list of 54 environmental goods on which import duties would be reduced to no more than 5 percent by 2015, including equipment for renewable energy, waste treatment and environmental monitoring.
The 21 Apec members were also expected to confirm a commitment to a 10 percent improvement by 2015 in the efficiency of industrial supply chains, by clearing transport bottlenecks and streamlining customs procedures.
Asked about a call by Russia’s President Vladimir Putin to reserve the right to protect some goods during times of crisis, Key said: “I can’t see that being accepted at all.”
Putin used the summit to grandstand four months after returning to the Kremlin and less than a month after Moscow joined the World Trade Organisation. Underlining Russia’s growing status as a wheat supplier, he said Russia would ramp up grain production and more than double exports by 2020.
Russia and the US are both looking to Asia, where economic growth is relatively strong, in a pivotal turn to boost their economies following the 2008/09 global crisis.
“It is absolutely clear that the most important region for economic growth this decade – and probably the next decade – will be the Pacific,” Mexican President Felipe Calderon said.
Hosting the summit on an island linked to the mainland by a spectacular new $1 billion (R8bn) bridge, a symbol of Moscow’s decision to look East, Putin has advertised his vast country at the summit as a gateway for Asia to European markets.
Chinese President Hu Jintao promised that his country, the world’s second-largest economy and Asia’s biggest, would rebalance its economy to secure stable and robust growth after a slowdown that has hit the entire region.
In a sign of Russia’s intent, state-controlled gas monopoly Gazprom signed a deal with Japan to develop plans for a $7bn liquefied natural gas plant on Russia’s Pacific coast. For his part, Hu spelled out a plan to pump $157bn into infrastructure investments in agriculture, energy, railways and roads in China.
Businessmen who met on Vladivostok’s Russky Island before the summit welcomed Hu’s plan. Others, such as Scott Price, the chief executive and president of Walmart Asia, said China still offered huge upside potential despite its slowing growth.
“When a car stops going at 100 miles an hour and only goes 69, it’s still going pretty fast. A Chinese economy growing at 7.5 percent is still a very attractive market,” Price said.
Russian tycoon Oleg Deripaska, whose business ranges from aluminium production to construction, welcomed Hu’s infrastructure plan.
“We have a discussion on many different projects with Chinese companies on developing of ports, developing of new mines, increasing production at existing facilities,” Deripaska said.
Despite pledging to “build bridges, not walls” to trade and investment, China and Russia have been challenged by Europe over trade practices it regards as limiting free competition, and a gas-pricing war is brewing between Brussels and Moscow.
Co-operation in Apec is hindered by territorial and other disputes among some members, and US officials said part of Secretary of State Hillary Clinton’s mission at the summit had been to assess former Cold War foe Russia’s eastward drive.
She was standing in for US President Barack Obama and had only a brief meeting with Putin. The summit’s impact may also be watered down by the fact that the terms of some of the other leaders, such as Hu, will end soon. – Reuters