APEC vows united front to battle global slowdown

APEC vows united front to battle global slowdown

SUZHOU, China (Reuters): Asia-Pacific finance ministers pledged on Sunday to press on with trade liberalization and financial reforms to combat a global economic slowdown that has sent markets reeling, but came up with no concrete measures.

A two-day meeting of Asia-Pacific Economic Cooperation finance ministers in China -- one of the few nations that has managed to insulate itself from the economic chill -- ended with expressions of optimism despite the gloom.

"We're confident that the leaders of APEC member economies can link hands and mutually face the current economic slowdown," Chinese Finance Minister Xiang Huaicheng told reporters.

"We can already roughly estimate when the slowdown will reach a bottom and then recover, so our confidence is strengthening. I feel that this APEC meeting was very helpful in allowing us to exchange viewpoints and in strengthening confidence."

In a joint declaration at the end of the meeting, ministers stressed the importance of timely action to deal with the deteriorating world economy.

"We reaffirm our commitment to enhanced macroeconomic policy dialogue and cooperation to tackle the current economic difficulties, and to build a strong foundation for sustained and broad-based growth in the APEC region and the rest of the world," it said.

"Trade and investment liberalization and facilitation will increase investor confidence, attract capital to the region, stimulate growth and reduce poverty," it said.

But the five-page declaration contained no concrete measures to tackle the crisis and was void of details of how APEC countries would work together to turn their economies around.

New Zealand Finance Minister Michael Cullen said there were hopes of an upturn by the end of the year and that the current gloom was a temporary slowdown rather than a crisis like the economic collapse that hit Southeast Asia in 1997.

"I think there's a general feeling around the table that while there are still significant risks, it was important to send the message that we are not looking at any kind of systemic failure like the Asian financial crisis," Cullen said.

Critics of APEC -- whose members span the economic and ideological spectrum from industrial giants like the United States and Japan to impoverished Papua New Guinea and Communist Vietnam -- say the body is all talk and no action.

But Cullen said APEC's diversity was one of its strengths.

"I think it does have value, in part because it is varied," he said. "It covers a significant cross-section of the world."

Cullen said one of the main benefits of APEC was that it gave the opportunity for ministers to talk informally.

"There is the capacity for ministers to meet informally and to gain confidence in each other, to understand each other's position," he said.

APEC's relevance has declined since its early days a decade ago, when member countries thought they were witnessing the dawn of a "Pacific century" of economic success.

That dream is over, crushed by the 1997 Asian crisis, debt problems in South America and the latest world slump.

But APEC retains significant economic clout -- its members have a combined GDP of $18 trillion and account for 44 percent of global trade.

China said the meeting agreed on the need for "equitable and broad-based" growth -- a coded message to richer nations to provide support to developing countries and do more to drag the global economy out of the doldrums.

But Treasury Secretary Paul O'Neill said the U.S. could not be the sole engine of world growth and called on Japan to implement the economic reforms needed to cure its economy.

"Let's get on with it" was O'Neill's blunt advice for the Japanese. He is due to visit Tokyo this week.

The finance ministers will forward their declaration to APEC heads of government, due to meet next month in Shanghai.

Trade ministers met in June and urged that APEC kick-start its stalled trade liberalization agenda. The grouping upset business leaders in 1999 when it abandoned efforts to fast-track tariff cuts in a range of sectors.

APEC groups Australia, Brunei, Canada, China, Chile, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam.