Asian and American leaders called on Saturday for a global free trade deal to offset a deepening world economic crisis but progress could be tricky with a "lame duck" president in the United States. US President George W. Bush huddled with Chinese President Hu Jintao, Japanese Prime Minister Taro Aso and other world powers for the second time in a week in a scramble to prevent a sharp global recession.
"It's important for us to continue to work together in this time of economic turmoil," Bush said at a summit meeting of the 21-nation Asia-Pacific Economic Co-operation group, or APEC. Bush, who is on his last scheduled trip abroad before handing over power to President-elect Barack Obama on January 20, called on his APEC peers to reject protectionism and make a breakthrough in the long-running Doha round of trade talks before the end of this year. The APEC group also includes Russia, Indonesia, Australia, Canada and Mexico, and accounts for more than half of global output.
While defending free trade, Canadian Prime Minister Stephen Harper and Mexican President Felipe Calderon blamed the United States for generating the crisis and called for better regulation of banks.
"Our closest neighbour and largest trading partner is the epicenter of the financial earthquake and global slowdown," Harper said in a speech to business leaders before the leaders met in private. Calderon said structural problems in the global economy were allowed to fester before spiralling out of control.
"This wasn't caused by developing countries," he said. The APEC leaders, gathered in a fortified defence compound in Peru's capital, Lima, are expected to largely echo recommendations made last week in Washington by the Group of 20 major world economies. Nine APEC members are also in the G20.
OBAMA IN THE WINGS: In Washington, the G20 endorsed the goal of reaching a deal on key farm and manufactured goods trade issues in the Doha round by the end of the year. They also pushed for government spending or tax incentives to spur economies and stronger oversight of the global financial industry.
Pascal Lamy, the World Trade Organisation's director general, will chair a meeting of senior officials and ambassadors to the WTO in Geneva on Sunday to assess the chances of reaching a deal. Bush wants to bolster his legacy on trade, although US Trade Representative Susan Schwab said that even if major progress were made in Geneva on nagging disputes, Obama's administration would still put its touches on any final deal.
A breakthrough "would lay the groundwork for the next administration to move ahead with Doha, without locking in specifics," Schwab said on Friday. The APEC leaders were slated to make a series of nonbinding declarations over the weekend urging swift responses to the global economic crisis.
South Korean President Lee Myung-bak repeated his government's mantra, drawn from the lessons of the 1997-98 Asian financial crisis, that measures to combat today's troubles must be "pre-emptive, decisive and sufficient." He said APEC members should avoid lifting trade barriers at all costs as unemployment rises, growth slows and financial bailouts pile up.
Lee and other leaders arrived early for the summit and addressed a parallel gathering of business executives from global companies, such as lender HSBC and miner Freeport McMoRan, that have been caught in the downdraft. "Nations must not make a regression to protectionism," he said. "Protectionism leads to protectionism and results in a further slowdown of the global economy."
Japan was expected to repeat a set of proposals it made at the G20, including an offer of up to $100 billion to the International Monetary Fund, to prod other countries to chip in funds.
The leaders of emerging economies are demanding better access to larger sources of emergency funding as calls grow for a fresh round of fund-raising for the IMF. "There needs to be expanded support from the major economies to emerging economies that have difficulty in procuring foreign currency liquidity," Lee said.
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