Asia-Pacific finance ministers, increasingly alarmed by Europe’s failure to stem its debt crisis, were to seek to forge a united front yesterday and call for more decisive action as they shore up their own economies against the fallout.
Talks paving the way for a weekend summit of the Pacific Rim — one of the world’s fastest-growing regions — are expected to be overshadowed by Europe’s escalating debt troubles, which are sending shockwaves across the globe.
The annual gathering of the 21-member APEC — hosted this year by US President Barack Obama in his native Hawaii — was being billed as an effort to make progress on building a new free-trade area and advancing a “green” technology pact, steps that could foster global growth.
However, a summit agenda that promises trade benefits that could take years to materialize will offer small comfort to global markets, reeling over the crisis in the eurozone, where Italy has overtaken Greece as the prime threat to stability.
Senior officials laying the groundwork for talks among APEC finance and foreign ministers yesterday and a leaders’ summit tomorrow expressed growing concern about Europe’s debt woes and agreed on the need to strengthen their economies against the -potential spillover, a US Treasury official said.
Finance ministers from the APEC group are also expected to keep pressure on China over its currency, the official said, signaling acquiescence to a US push for appreciation of the yuan.
The issue has been a major source of tension between Washington and Beijing, which has become increasingly assertive in the region.
However, the overarching concern at the summit will be getting Europe to put its fiscal house in order.
Australian Treasurer Wayne Swan urged unity among Asia-Pacific countries, saying every APEC economy had felt the “chill wind” of economic events in Europe as well as the US, where the recovery has moved in fits and starts.
“This is a challenge for Europe, but we’ve all got a stake in the outcome,” he told reporters in Honolulu.
Just as last week’s G20 summit was overshadowed by the eurozone contagion, that crisis will also loom large over high-level meetings in Honolulu — and the chances are low for any immediate steps that will reinvigorate the world economy.
Yesterday’s round of ministerial talks among finance and foreign ministers were to focus mainly on opening markets between Asia-Pacific countries, which have almost 3 billion people and account for 54 percent of global output.
Nine countries — the US, Australia, New Zealand, Vietnam, -Malaysia, Singapore, Brunei, Chile and Peru — are expected to say tomorrow they have reached the broad outlines of a proposed Trans-Pacific Partnership (TPP) trade deal. Japan may also join, giving the pact greater heft.
The TPP pact, a possible template for an APEC-wide trade zone, would help inject the US into the heart of Asia’s regional trade architecture.
While that could cause friction, the overarching concern among summiteers could well be what happens thousands of kilometers away in Europe, where debt-laden Italy appears on the verge of needing a bailout its euro partners cannot afford.
IMF Managing Director Christine Lagarde told a financial forum in Beijing that Europe’s crisis risked plunging the global economy into a Japan-style “lost decade.”
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