APEC leaders vow new economic model

SINGAPORE (AFP) - Asia-Pacific powers including the United States and China Sunday vowed to overhaul the crisis-stricken world economy, rejecting protectionism and touting plans for a gargantuan free market.
Leaders of the Asia-Pacific Economic Cooperation (APEC) forum, who together steer more than half the global economy, also said they would maintain hefty stimulus spending until a durable economic recovery has clearly taken hold.
US President Barack Obama pressed Asian leaders at the weekend APEC summit to retool their export-led economies and rebalance world growth, or risk drifting from crisis to crisis.
In a concluding declaration, the leaders said: We firmly reject all forms of protectionism and reaffirm our commitment to keep markets open and refrain from raising new barriers to investment or to trade in goods and services.
We cannot go back to 'growth as usual, they added, calling for a fresh model of economic integration.
We will pursue growth which is balanced, inclusive and sustainable, supported by innovation and a knowledge-based economy, to ensure a durable recovery that will create jobs and benefit our people. The summits chairman, Singapore Prime Minister Lee Hsien Loong, explained that sustainable growth meant working for an ambitious outcome at Copenhagen climate talks next month.
If thin on specifics, the APEC declaration was a nod to Obamas demand that US consumers must no longer bear the brunt of stoking world demand, and that Asians must start to spend and not hoard their export earnings.
Obama said voracious US consumerism had long fuelled the growth of regional economies. But when crisis struck last year, Asian goods lost their most important market and the global recession deepened.
We cannot follow the same policies that led to such imbalanced growth, he told the summit, highlighting the sky-high deficits run up by the US during the boom years.
If we do, we will continue to drift from crisis to crisis, a failed path that has already had devastating consequences for our citizens, our businesses and our governments.
The APEC leaders instructed their officials to start exploratory work on the so-called Free Trade Area of the Asia Pacific, although analysts warn that the giant undertaking is years if not decades from fruition.
Noting that APEC is marking its 20th anniversary this year, Prime Minister Lee said the group must complement the G20 and articulate the Asia-Pacific perspective on global economic issues.
But a hastily convened climate discussion in Singapore among key leaders - including Obama and Chinese President Hu Jintao, representing the worlds two biggest emitters of greenhouse gases - failed to yield any breakthrough.
The leaders buried hopes a key UN meeting next month would forge a binding pact to combat climate change, saying talks would drag on well past the Copenhagen meeting.
Instead they backed a face-saving proposal from Danish Prime Minister Lars Loekke Rasmussen - who jetted in for hastily arranged talks in Singapore - aimed at forging a political statement of intent at the December meeting.
Complex negotiations towards a legally enforceable successor to the Kyoto Protocol on climate change, which expires in 2012, would then continue to work out differences between rich nations and developing countries including China. At Sundays talks attended by leaders including US President Barack Obama and Chinas Hu Jintao on the sidelines of an Asia-Pacific summit, there was broad consensus this was the best option for the climate negotiations, officials said.