4um: Leaders see financial crisis over in 18 months

updated 18 minutes ago function UpdateTimeStamp(pdt) { var n = document.getElementById("udtD"); if(pdt != '' && n && window.DateTime) { var dt = new DateTime(); pdt = dt.T2D(pdt); if(dt.GetTZ(pdt)) {n.innerHTML = dt.D2S(pdt,((''.toLowerCase()=='false')?false:true));} } } UpdateTimeStamp('633630712889600000');

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.

Story continues below [5;

advertisement | your ad here

dap('&PG=NBCMSB&AP=1089','300','250');

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.

getCSS("3053751")
  Economy in Turmoil
Wall Street braces for another pivotal week
  Wall Street faces another pivotal week, with investors enmeshed in a stock market knocked to 11-year lows amid growing fears about the fate of automakers and banks.
Newsvine: Discuss the crisis
FHA-backed loans: the next subprime crisis?
  Bernanke: I underestimated housing problem
  Obama focuses with economy in free fall

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)

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