APEC ministers agree global economic crisis far from over

Finance and foreign ministers meeting in Singapore for this week’s annual APEC meeting are mulling ways to keep economic recovery going once lavish stimulus spending ebbs, while tackling other regional security and political issues.

The forum culminates in a weekend summit of heads of state from APEC’s 21 economies, including President Barack Obama.

The economic crisis is “by no means over,” warned Singapore’s foreign minister, George Yeo, urging nations to persist in opening markets wider. “There is creeping protectionism now; that is very dangerous. It is a slippery slope, and if we’re not careful, before we know it, all of us will be in a much direr situation,” he told reporters after hosting a breakfast meeting with foreign ministers.

The ministers agreed the economic crisis is in a respite, Yeo said, but recovery remains fragile.

APEC was founded 20 years ago to promote greater trade and integration around the Pacific Rim. Its scope has since expanded to encompass a wide range of issues, and ministers Wednesday stressed the need for action on climate change, energy security and ensuring food security for the millions of vulnerable poor in the region.

Boosting exports is the “best ticket” to creating jobs, ending the recession and bringing massive deficits under control, said Thomas J. Donohue, president of the US Chamber of Commerce. “Expanding free trade across the Pacific can drive the global economic recovery, create badly needed jobs and advance economic and social progress in developing and developed countries alike,” he told business leaders on the sidelines of the APEC meeting.

While Asia has 168 free-trade agreements, work on US pacts with South Korea, Colombia, and Panama languish in Washington.

The Pacific Economic Cooperation Council, an APEC-affiliated think tank, urged in a report issued Wednesday for fundamental reforms to shift growth away from a dependence on exports to the US. “US consumers are not likely to drive world demand in the medium term, and the slack will have to be taken up in part by Asian consumption and investment,” Peter Petri, a Brandeis University professor who coordinated a regional task force on the economic crisis, said in the report.

The think tank’s survey of 400 business, government and expert leaders in the region found many convinced that the engines of growth are changing -- a trend long anticipated but accelerated by the relatively strong recent performances of developing Asian nations, especially China and India. “They are very conscious that the US is not going to be the growth engine for the foreseeable future, and they are thinking very hard of how to find other ways to generate growth,” said Yuen Pau Woo, who coordinated the report.

“The engines of growth are shifting from the US to Asia; from exports to domestic spending, especially on social priorities and from production of goods to production of services,” Woo said.

Higher spending on social needs such as education, health care, services for the aging and welfare networks; freer trade in services, and policies to promote green technologies -- all can contribute, he said.

Devoting more to those resources would help rebalance the wide gap in US-China trade, among other distortions, that helped bring on the crisis.

By boosting social spending, China and other Asian nations could help reduce the need among their citizens to scrimp and save to cover such costs, freeing them to improve living standards and spend more.

The report estimates that $300 billion of the $28.8 trillion in regional economic activity represents trade and other imbalances that need to be redressed.

Geithner encouraged by moves in Japan, China

US Treasury Secretary Timothy Geithner said Wednesday he’s encouraged by efforts in Japan and China to spur domestic demand instead of relying so heavily on American consumers - - a shift that will contribute to more stable global growth. Geithner said he sees broad recognition among governments to create policies that will lead to more balanced, sustainable growth and avoid the kind of dangerous imbalances that contributed to the world recession. “We’re very, very encouraged to see what’s happening here in terms of a broad reform agenda ... to try to produce an economy more dependent on domestic sources of growth,” Geithner said in Tokyo on his way to joining Pacific Rim finance ministers meeting in Singapore for the annual APEC summit. Tokyo AP