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Asia-Pacific ministers eye huge free trade area

YOKOHAMA - Asia-Pacific trade and foreign ministers wrap up talks on Thursday, expected to promise to avoid protectionism and work toward creating a vast free trade area in the world’s fastest growing economic region.

But the meeting of ministers of the 21-member Asia-Pacific Economic Cooperation (APEC) forum is overshadowed by a Group of 20 summit of major economies in neighbouring South Korea where deep divisions have emerged over currencies, monetary policy and global trade imbalances.

Nine of APEC’s members are also in the G20, including the world’s biggest economies — China, Japan and the United States. APEC leaders meet in Yokohama at the weekend, immediately after the Seoul G20 summit.

On Wednesday, the APEC ministers agreed to avoid taking any new protectionist measures for the next three years, and urged a conclusion of the Doha round of trade liberalisation talks in 2011, Japanese officials said.

China, however, said some countries were asking too much.

“APEC members must show confidence and determination in responding to the financial crisis, grasping the opportunity to together promote an early conclusion to the Doha round,” a ministry website (www.mofcom.gov.cn) quoted Chinese Vice Commerce Minister Yi Xiaozhun as telling the trade officials in Yokohama.

“At the same time, a small number of major members must set aside their unrealistically high demands,” Yi said, apparently referring to the United States and other advanced countries.

Regional rivalries

The APEC ministers said they would also build on the 43 bilateral and mini-free trade pacts with each other to create to free a trade area in the region, home to 40 percent of the world’s population and 53 percent of global economic output.

Businesses have long urged a single pact for the Pacific rim to simplify a plethora of standards and rules.

The 10-member Association of Southeast Asian Nations (ASEAN) — most of whom are APEC members — has its own free trade area and is building an EU-style economic community.

ASEAN also has various pacts with APEC members China, Korea, Japan, Australia and New Zealand.

Those agreements, and a U.S.-led one called the Trans-Pacific Partnership (TPP) that is being negotiated among nine nations, will be the main building blocks of the Free Trade Area of the Asia-Pacific (FTAAP).

Host Japan has said it wants to start talks with other countries on the TPP, but the government has run into fierce opposition from the politically powerful farm lobby.

An Asia-Pacific free trade area would link the world’s top economies with some of its fastest-growing ones such as Indonesia, Thailand and Mexico.

Despite the expected warm words on free trade, regional security rivalries as the region adjusts to an increasingly assertive China are simmering in the background.

The security tensions could spill over into trade and investment, while rivalry over resources from oil and gas to rare earth metals risks fuelling strategic conflicts in turn.

Japanese Prime Minister Naoto Kan, his ratings tumbling over his handling of a row with China, is hoping to meet Chinese President Hu Jintao on the sidelines of the APEC summit.

Sino-Japanese relations took a sharp dive due to a feud over claims to isles in the East China Sea near potentially huge maritime gas and oil reserves.

Japan’s ties with Russia also chilled after Russian President Dmitry Medvedev visited another disputed island.

Washington’s ties with Asia are also facing scrutiny as US President Barack Obama, who will arrive in Yokohama following the G20 summit, seeks to boost exports and promote domestic jobs in the wake of his Democratic Party’s devastating election defeat.