Financial crisis steers APEC back to basics

Agence France-Presse

Posted at Nov 24 2008 10:57 AM | Updated as of Nov 24 2008 06:57 PM

LIMA - The global financial crisis has unwittingly restored the pursuit of trade and investment as a core goal of the APEC forum as security issues were confined to the periphery at its latest summit in Lima.

The leaders of the 21 economies of the Asia-Pacific Economic Cooperation (APEC) grouping at the weekend grappled with the financial turmoil that is threatening to plunge the world into a recession.

The North Korean nuclear crisis and the US-Russia dispute over Georgia were relegated to a low profile on the sidelines of the summit.

The terrorism issue was mentioned by leaders only in passing although they underlined the importance of the issue in their closing statement.

APEC began in 1989 as a forum to forge open trade and investment across the Pacific Rim but security became a prominent topic, especially after the September 11, 2001 attacks.

A survey of nearly 500 Asia-Pacific opinion-leaders on the major issues confronting the region ahead of the Lima summit showed terrorism dropping to 18th out of 19 priority issues.

The US financial crisis and its global impact was given top priority followed closely by moves to forge a free trade zone stratching from Chile to China, and the need to complete the Doha trade liberalization talks, according to the poll by the independent Pacific Economic Cooperation Council.

"Resolving the current crisis is going to take a lot of sustained regional and global cooperation," said Charles Morrison, the Council's chairman and president of the East-West Center in Hawaii.

Along with the Group of 20 developing and industrialized nations, APEC "is a part of this process and helps to build consensus at the Asia-Pacific level on the next critical steps," he said.

With the troubled global economy expected to dominate the scene at least over the next two years, trade and investment would regain its rightful place in the APEC group, officials said as US President George W. Bush bowed out of the latest summit after eight annual appearances.

Bush's successor Barack Obama may also steer the APEC grouping to its central focus of trade and investment liberalization.

"Perhaps APEC could be recommitted to trade liberalization and trade integration as its central focus -- rather the security," an Obama advisor said.

"We have pretended to use it for security partly because we weren't in other organizations that might afford a good opportunity," he said, speaking on condition of anonymity.

Obama may seek a seat in a key East Asian summit comprising leaders of the 10 ASEAN states -- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam -- as well as Australia, China, India, Japan, New Zealand and South Korea, his advisors said.

Economic and trade priorities are also expected to be the focus when Singapore takes the mantle from Peru as the 2009 APEC chairman.

Aside from the financial crisis and economic slowdown, Singapore will give attention to APEC's ambitious bid to forge a regionwide free trade zone.

The trade-driven island state will seek to put in place "building blocks" to realize the long-term vision of a Free Trade Area of the Asia Pacific, said Trade and Industry Minister Lim Hng Kiang.

As the focus becomes sharper on trade and investment, APEC leaders want to beef up the forum's permanent secretariat in Singapore to tackle rising challenges.

Plans are afoot to establish a policy support unit in the secretariat and appoint an executive director of APEC for a fixed term.

At present, APEC chairing economies second one of their officials to be executive director for a year on a rotation basis.