Economic Recovery, Resisting Trade Protectionism Top APEC Agenda

President Obama, right, met with Singapore’s Minister Mentor Lee Kuan Yew October 29 at the White House.

By Merle David Kellerhals Jr.
Staff Writer
November 4, 2009

Washington — Enhancing global economic recovery and resisting trade protectionism will be significant themes at the Asia-Pacific Economic Cooperation forum in Singapore, a senior U.S. diplomat says.

“Clearly, given where the global macroeconomy stands in these days, it’s a very pressing issue for everyone to discuss the ways that we can achieve economic recovery and growth,” said Kurt Tong, the U.S. senior official for Asia-Pacific Economic Cooperation (APEC).

The United States and many major western economies have begun a slow recovery process from one of the most severe economic recessions since the Great Depression of the 1930s, but many East Asian nations are still not showing signs of recovery. The global recovery is not a uniform process, reflecting the unevenness of national measures to spur growth and also the severity of the recession in some regions, economists say.

The U.S. gross domestic product (GDP) expanded at an annualized rate of 3.5 percent in this year’s third quarter (July-September), which matches its average growth rate of the last 80 years, according to an October 29 U.S. Commerce Department report. The GDP, which is the government’s broadest measure of total goods and services produced in the United States, had declined for a year before recovering in the latest quarter. This recession has been the longest for the United States since the end of World War II, government economists said.

Avoiding trade protectionism is second only to economic recovery for the APEC economies, Tong told reporters in a briefing November 3 at the Washington Foreign Press Center.

“This is something that’s been discussed throughout the year intensively. The track record, we believe, is quite good,” Tong said. “That’s in large part because of the intense discussions which the major economies of the world have had over the past year, to make sure that we don’t slip down into the road of protectionism in a negative macroeconomic environment.”

The Doha Development Round — the World Trade Organization’s trade-liberalization talks started in Doha, Qatar, in 2001 — will be on this year’s agenda for the APEC forum. “I expect that discussion to be intensive and, hopefully, productive,” Tong said. The Obama administration has made successful conclusion of the Doha trade talks a central focus of U.S. trade policy, says U.S. Trade Representative Ron Kirk.

U.S. exports to the Asia-Pacific region trend toward value-added goods and services such as electrical machinery; aircraft and parts; medical equipment; chemicals; and knowledge-based business, professional and technical services.

Tong said he expects regional economic integration to be at the core of the APEC agenda this year.

“What that refers to is the work that is done within APEC to try and accelerate trade and investment liberalization among the APEC economies so that the economies will have fewer barriers between them as they trade with each other and invest in each other,” he said.

“We’re hoping for some progress in the area of environmental goods and services,” he added.

Tong said three conceptual themes that will be discussed include balanced growth, sustainable growth and inclusive growth.

Singapore Prime Minister Lee Hsien Loong told reporters November 3 that APEC members have a long-term vision of creating a free trade area in the Asia-Pacific and will use existing trade accords to reach that goal.

“We will be discussing how to advance APEC’s core mission, which is to advance free trade and open markets in Asia-Pacific,” Lee said in Singapore. “The idea is to consolidate a network of free trade agreements which have sprung up and to reduce the administrative complexities and overheads of businesses.”

STRATEGICALLY IMPORTANT

“APEC is strategically important to the United States because it is a primary venue for multilateral engagement with the Asia-Pacific on economic and other key interests,” Tong said at a recent congressional hearing.

The 21 APEC members account for 55 percent of the world gross domestic product; 45 percent of global trade; and 40 percent of the world’s population, about 2.7 billion consumers. In addition, 60 percent of U.S. goods exports go to APEC economies and five of America’s top seven trading partners are APEC members.

Nine of the APEC economies are also represented in the Group of 20 (G20) major and advancing global economies, which will help in reaching agreement on the direction needed to spur recovery and trade across the Asia-Pacific region, Tong said.

During three recent summits, G20 leaders have created a framework designed to shrink surpluses in export-rich countries such as China and boost savings in debt-laden nations including the United States to develop a balanced global economy. Most leading economists believe that one of the contributing factors to the rapid spread and depth of the current recession was a significant imbalance in the global economy as nations pursued often conflicting economic policies.

President Obama will be making his first trip to East Asia since taking office and will attend his first APEC leaders meeting. Tong said the president’s attendance signals a strong U.S. commitment to the Asia-Pacific region.

In addition to attending APEC in Singapore, Obama will travel to Japan, China and South Korea November 11–19, White House press secretary Robert Gibbs said. Obama will be in Tokyo November 12–13 to deepen coordination with the Japanese on a range of economic, security and other issues, he said, and will include a second meeting with Japanese Prime Minister Yukio Hatoyama before heading to the two-day APEC meeting November 14–15. Obama will travel to Beijing and to South Korea before returning to Washington.

While at the APEC forum, Obama will hold his first meeting with the leaders of the 10 countries that comprise the Association of Southeast Asian Nations (ASEAN). The ASEAN nations are seeking to establish a European Union-style economic community by 2015, and they are also pushing for a free-trade zone with Japan, China and South Korea.