4um: Leaders see financial crisis over in 18 months

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LIMA, Peru - Pacific Rim nations assured the world Sunday that the global financial crisis can be quelled in 18 months, but provided few details of how they expect that to happen — or how their governments can help.

The 21 economies, which represent more than half of the world’s productive power, also pledged during a two-day summit not to erect new protectionist barriers for the next year, and to jump-start stalled World Trade Organization talks.

The main accomplishment of the Asia-Pacific Economic Cooperation forum was a widening of support for the Washington Declaration made last weekend by major economies that pledged to maintain free trade despite pressures to protect domestic industries.

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The leaders voiced confidence that the crisis could be resolved by mid-2010, though they did not go much beyond the steps outlined in the Group of 20 summit in Washington.

“We are convinced that we can overcome this crisis in a period of 18 months,” the leaders said in a statement. “We have already taken urgent and extraordinary steps to stabilize our financial sectors and strengthen economic growth.”

The reassuring words were added early Sunday to a declaration the leaders had signed off on the previous day. Delegates from several countries said the changes were made overnight at the request of the summit’s host, Peruvian President Alan Garcia.

“We have agreed that this meeting produce a clear and firm statement that breaks the vicious cycle of anguish and uncertainty,” Garcia said Sunday. “We — united as the world’s peoples, governments and businesses — are going to beat the crisis.”

The 18-month timeline fits with a calculation by the International Monetary Fund, which forecast developed economies would grow barely 0.1 percent in 2009, and that the world would emerge from the crisis the following year.

But some delegates and analysts were skeptical that the timetable was much more than wishful thinking, and some leaders distanced themselves from the language. Mexican President Felipe Calderon described the date as more of an estimate than a prediction.

Canadian Prime Minister Stephen Harper went a step further.

“I think it would be speculative to commit to that kind of timeline,” he said.

And Dan Price, an aide to George W. Bush, said the U.S. president thinks the global economy can be fixed even faster.

“That particular sentence was added by the president of Peru as the chair,” Price said aboard Air Force One. “Certainly, some in the region may think that recovery may take 18 months. President Bush believes that the actions we are taking now will begin to produce results in the much nearer term.”

Vinod Aggarwal, director of the APEC Study Center at the University of California-Berkeley, said the timeline was useful in sending a signal to markets.

“I don’t think it will make that much difference, but I don’t think it hurts,” he said.

More important, he said, was the leaders’ agreement to send ministers to Geneva next month to jump-start the so-called Doha round of World Trade Organization talks. Concern over the global financial crisis has injected new urgency into the negotiations, which collapsed in July.

In their final declaration, the APEC leaders said they were deeply concerned about instability in food prices, were committed to battling corruption and piracy, and supported “decisive and effective long-term cooperation” to combat climate change.

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The leaders called for greater APEC participation in the IMF and other multilateral lenders. Japan said last week it was ready to lend up to $100 billion to the Washington-based organization, but China has so far resisted entreaties to dig into its $1.9 trillion in reserves.

The summit could be the final foreign trip for George W. Bush as U.S. president. Barack Obama replaces him on Jan. 20, and delegates in Lima said there was little incentive to propose more concrete action without Obama’s presence.

Obama, who did not send representatives to Lima, pressed forward back home, announcing a plan to save or create 2.5 million jobs by the end of 2010 and preparing to introduce leaders of his economic team on Monday.

Harper said he expects Canada to officially enter recession by the New Year and is studying a financial stimulus package.

“If it is necessary for there to be government spending to bolster domestic consumption and stimulate investment markets, we will undertake those measures,” he said.

LIMA (Reuters) - U.S. President George W. Bush preached a message of "free markets, free trade and free people" on Saturday at his last international summit, pledging to use his remaining time in office to work toward a successful conclusion of a global trade deal.

"I recognize that I'm leaving office in two months but nevertheless this administration will push hard to put the modalities in place so that Doha can be completed and so we send a message we refuse to accept protectionism in the 21st century," Bush said in a speech to business executives at a summit of the Asia Pacific Economic Cooperation forum.

In a joint statement issued hours later, APEC heads of state said they were committed to reaching a breakthrough "next month" on difficult farm and manufacturing trade issues that have long blocked a deal in the seven-year-old Doha round of trade talks.

APEC leaders from 21 countries in Asia and the Americas, all around the Pacific Rim, also pledged not to raise new trade barriers for the next year.

The United States, China, Japan and other major APEC members also belong to the Group of 20 nations, which agreed last week in Washington to push for a breakthrough in the long-frustrated Doha round by the end of 2008 and to keep markets open.

"Now we've got to put those words into action," Bush told the executives before heading into closed-door meetings with APEC heads of state.

White House spokeswoman Dana Perino said Doha came up in Bush's bilateral meetings during the day with the leaders of South Korea and Japan.

"Doha has come up in every meeting," she said. "There is a path to get Doha done. The president wants to walk it and make everyone walk it with him so that we can get this done in the next couple of months."

Japanese Prime Minister Taro Aso told Bush countries should push to finish the Doha round, a Japanese official said.

The APEC summit comes as world leaders are struggling to restore global economic health in the midst of the worst financial crisis since the 1930s.

"I think we ought to focus our efforts on three great forces for economic growth: free markets, free trade and free people," Bush told the business leaders.

He welcomed Peru and Australia's decision to join the United States, Singapore, Chile and Brunei in negotiating a regional free-trade pact. He lashed out at the U.S. Congress for failing to approve three free-trade agreements with Colombia, South Korea and Panama before adjourning this week.

Bush told South Korean President Lee Myung-bak that he thought Congress had delayed the agreement with South Korea because "there's a backlash against free trade and ... he thinks we need to overcome it if we're going to overcome our economic challenges," Perino said.

The APEC leaders are expected to focus on common actions that countries can take to address the financial crisis and prevent another one from happening.

Bush acknowledged the world economic order was rapidly reshaping itself, and said the United States supported the demands of developing countries for a greater role in international institutions such as the World Bank and the International Monetary Fund.

"We're witnessing a dramatic shift of history as the center of the world's economic stage moves from West to East, from the Atlantic to the Pacific," Bush said. "Some view the rise of the Asia Pacific with suspicion and fear. America doesn't. The United States welcomes this success of emerging economies throughout the region."

The crisis has crippled U.S. economic growth and already cost the government hundreds of billions of dollars to prop up ailing banks. Other industries are also in trouble.

Bush and Canadian Prime Minister Stephen Harper discussed the auto industry during a bilateral meeting on Saturday, Perino said. Executives of the big three U.S. automakers are seeking $25 billion in emergency loans from the government to avoid collapse.

While the auto crisis is affecting both countries, Perino said Bush and Harper did not discuss a coordinated approach in dealing with it.

(Additional reporting by Chisa Fujioko, Dana Ford and Paul Eckert; editing by Fiona Ortiz and Mohammad Zargham)

LIMA (Reuters) - The United States, China, Japan and 18 other economies in Asia and the Americas pledged quick and decisive action on Sunday to prevent a severe global economic downturn.

With recession gripping parts of the world and financial markets in chaos, leaders at the 21-member Asia-Pacific Economic Cooperation forum, or APEC, said the slowdown is "one of the most serious economic challenges we have ever faced."

They said free trade and higher government spending were key to resolving the crisis and supported a big push to revive long-stalled global trade talks by seeking agreements on contentious farming and manufactured goods.

The leaders promised to "take all necessary economic and financial measures to resolve this crisis."

Their declaration at the end of a two-day summit in Peru echoed the measures called for by the "Group of 20" major economies at a meeting in Washington a week earlier, and widened the support for drastic action to stimulate lending and spending.

APEC members account for more than half of the world's economic output and also include Canada, Indonesia, Mexico, Chile, New Zealand, Singapore, South Korea and Hong Kong. Nine of them belong to the G20.

They pledged at the summit to work together to ease the turmoil, agreed not to adopt new trade barriers for a year and called for better regulation of the financial industry.

They also supported overhauls of the International Monetary Fund and World Bank at a time when more countries need emergency bailouts to avert economic disaster.

"The global political and economic architecture is undergoing the deepest and most complicated changes since the Cold War," Chinese President Hu Jintao told Russia's Dmitry Medvedev at the summit.

Japan reiterated an offer of $100 billion in funding for the IMF, but its peers did not follow the example.

APEC, which groups some of the most open economies in the world, warned that countries should not be tempted to use protectionist measures even if job losses mount.

"We are convinced that we can overcome this crisis in a period of 18 months," the leaders said at the summit.

But seven years of global trade negotiations have been hampered by disputes between the United States, China, India and other major players, and it is not clear what concessions they are prepared to make now.

U.S. President George W. Bush, on his last scheduled international trip before leaving office in January, held bilateral meetings with the leaders of China, Japan and Russia during the summit.

He tried to use the meeting to revive global trade talks before handing off to President-elect Barack Obama, who has expressed more caution about free trade than Bush.

A senior U.S. official told reporters in Geneva he saw a "very high probability" that trade ministers would return to Geneva next month to try to get a breakthrough in the so-called Doha round of trade talks.

Major economies have slashed interest rates and spent hundreds of billions of dollars to help struggling banks after the meltdown in the U.S. housing market sparked a worldwide credit crisis.

Now countries are looking at stimulus plans that include government spending increases and tax cuts.

Obama said on Saturday he was crafting an aggressive two-year stimulus plan to revive the troubled economy.

Canada could dip into a technical recession later this year or early next year, and will use fiscal stimulus if needed and if it does not cause a long-term budget deficit, Canadian Prime Minister Stephen Harper said.

APEC meetings over the last eight years have often been marked by anti-Bush protests and demonstrations against free trade, but protests were muted in Peru, perhaps because Bush is so close to leaving office.

(Additional reporting by Marco Aquino, Doug Palmer and Paul Eckert; Writing by Fiona Ortiz; Editing by Terry Wade and Kieran Murray)

LIMA, Nov. 22 (Xinhua) -- Chinese President Hu Jintao put forward proposals for dealing with major issues in international economic and social development and tackling the ongoing global financial crisis at the 16th APEC economic leaders' meeting here on Saturday.

Hu presented five proposals for addressing the prominent issues in international economic and social development.

First, APEC member economies should build consensus and promote sound development of the multilateral trading regime, Hu said.

"A fair and open multilateral trading regime is conducive to the steady growth of regional and global trade, to the sound growth of the world economy and to the benefits of all parties," he said.

"We should have strong confidence in the multilateral trading regime and give strong support to the Doha Round negotiations," he added.

Second, APEC member economies should take up responsibilities and jointly tackle climate change, he stressed.

All parties should, in keeping with the requirement of the UN Framework Convention on Climate Change and its Kyoto Protocol and the principle of "common but differentiated responsibilities," actively conduct negotiations for the implementation of the "Bali Roadmap" and take effective policy measures in light of their respective conditions to mitigate climate change.

Third, exchanges and cooperation should be conducted and efforts joined to combat natural disasters, Hu said.

In order to increase exchanges and cooperation in disaster response in the Asia-Pacific region, China has put forward the APEC Principles on Disaster Response and Cooperation this year, he said.

"It is also our hope that APEC members will consider carrying out long-term cooperation projects in post-disaster recovery and reconstruction so as to deepen APEC cooperation in disaster prevention and relief," he added.

Fourth, regulation and guidance should be enhanced and corporate social responsibility strengthened, he said.

"An important lesson we have learned from the ongoing financial crisis is that while trying to maximize economic returns, enterprises should follow a prudent, well-thought-out and responsible approach in market operations," he added.

Fifth, APEC members should take coordinated actions and ensure world food and energy security, Hu emphasized.

"We should, following the principle of common development, actively and effectively coordinate our policies and resort to a variety of joint measures to safeguard world food and energy security," he said.

"We should establish and act on a new energy security concept that calls for mutually beneficial cooperation, diverse forms of development and common energy security through coordination," he added.

"The rapidly-spreading international financial crisis, with its extensive impact, constitutes the most severe challenge confronting world economic growth," Hu said.

It is a major and urgent task for all countries and regions to deal effectively with financial risks, maintain international financial stability and promote world economic development, he added, lodging three proposals.

First, to curb the worsening financial crisis, all countries should take prompt and effective measures, enhance macroeconomic policy coordination, improve information sharing, help each other as much as possible, and employ all necessary fiscal and monetary means to stop the spread and development of the financial crisis, bring stability to global financial markets, stimulate economic growth, minimize the damage of the financial crisis on the real economy and avoid a global economic recession.

Second, the international community should earnestly draw lessons from the ongoing financial crisis and, based on full consultations among all stakeholders, undertake necessary reform of the international financial system in a comprehensive, balanced, incremental and result-oriented way, with a view to establishing anew international financial order that is fair, just, inclusive and orderly and fostering an institutional environment conducive to sound global economic development.

"The reform of the international financial system should both reflect the general law and principles of financial regulation and take into account the specific development stage and unique features of different economies," he said.

It should seek a balance among the interests of all parties and reflects, in particular, the interests of emerging markets and developing countries, he added.

Third, from a long-term perspective, it is necessary to change those models of economic growth that are not sustainable and to address the underlying problems in member economies.

"We should also pay adequate attention to the impact of the financial crisis on the developing world and provide necessary support to relevant countries to help them maintain growth momentum," he pointed out.

On APEC's development, President Hu said China is ready to work with other APEC members to promote its further development.

Since its launch almost 20 years ago, APEC has done a great deal in promoting trade and investment liberalization and facilitation and economic and technical cooperation, thus making positive contribution to regional economic integration and the building of an Asia-Pacific family, President Hu said.

The host of major reform measures adopted within the APEC framework in recent years have improved APEC's organizing and coordinating capabilities and significantly enhanced the dynamism and efficiency of APEC cooperation, Hu said.

To promote the further development of APEC, "we should maintain the nature of APEC as a forum for economic cooperation and its approach of conducting cooperation on a non-binding basis, as this best suits the diversity prevailing in the Asia-Pacific," the Chinese president said.

He said that the APEC members should continue to promote balanced progress in economic and technical cooperation and trade and investment liberalization.

"In particular, we should increase input in economic and technical cooperation to enhance capacity-building in developing members and narrow the development gap."

Hu arrived here on Wednesday for a state visit to Peru and the Economic Leaders' Informal Meeting of the Asia-Pacific Economic Cooperation (APEC).

The APEC economic leaders' meeting opened in Lima on Saturday to discuss such issues as the ongoing global financial crisis, the Doha Round trade talks and food security.

The two-day meeting would also discuss the APEC regional economic integration, corporate social responsibility, human security, APEC institutional reform, trade and investment, structural reform, anti-corruption and transparency, economic and technical cooperation, and climate change.

At Asia-Pacific conference, Bush makes final push to expand free trade