Clinton to take growth plan to APEC summit

Clinton to take growth plan to APEC summit

SINGAPORE (Reuters): U.S. President Bill Clinton will bring his plan for world growth to the APEC summit in Kuala Lumpur later this month, a senior U.S. official said on Thursday.

John Wolf, U.S. coordinator for the Asia-Pacific Economic Cooperation (APEC) forum, said the summit would also focus on broadening trade liberalization and study the role of short-term capital.

"President Clinton would discuss with his colleagues the economic strategy he first set up in his September 14 speech," Wolf said in a satellite news conference.

Clinton's broad plan to tackle the spreading global crisis included working with Japan and Europe to spur growth, seeking ways to help viable Asian companies cope with heavy debts and asking the World Bank to double its support for social safety nets in Asia.

Wolf said since Clinton's speech, several key events had taken place, including U.S. interest rate cuts, the passage by the U.S. Congress of a $18 billion contribution to the International Monetary Fund and new Japanese banking laws.

These changes, Wolf said, had helped set the scene for a global economic recovery but countries needed to affirm their commitment to free trade, which he said was crucial for growth.

"This is the time, this is the place to signal that Asia- Pacific economies are going to continue to be open to trade and investment," he said.

The APEC summit, to be held on November 17 and 18, brings together leaders of 18 Pacific Rim countries including the United States, China, Japan and Peru.

Wolf said one of the yardsticks against which the success of the summit would be measured was the Early Voluntary Sectoral Liberalization (EVSL) initiative.

This would open up trade in nine "fast track" industry sectors -- environmental goods and services, fish and fish products, forest products, medical equipment and instruments, telecommunications mutual recognition agreement, energy, toys, gems and jewelry and chemicals.

One of the stumbling blocks was Japan's reluctance to join the forestry and fishing sectors, he said.

"If Japan stays outside of fish and forest, we find it difficult to see how there can be success," Wolf said.

For success, he said, there must be critical mass and "critical mass includes the world's second largest economy".

Turning to calls by some countries -- most particularly by host nation Malaysia -- to rein in financial speculators, Wolf said the issue needed to be studied closely before any decisions were made.

He said it was a complex matter in which one person's speculation was another's hedge and it was important that any measures taken did not shrink the capital pool and lead to an increase in the cost of funds to struggling emerging economies.

"Clearly the volatility of short-term capital is an important issue," he said.

There was a need for greater transparency in the movement of capital, but said it still too early to come up with rules, he said.