Days after the 20 largest economies pledged action to withstand financial turmoil during crisis talks in Washington, world leaders gathered in the Peruvian capital of Lima this week for the Asia-Pacific Economic Cooperation Summit, or APEC, are expected to build on and broaden the G20 strategy.
“APEC is the best anti-crisis tool the world has,” Peru President Alan García told a conference of small business owners on Monday.
“Economists will remember that the European Union’s saturation and slowness is reflected in its closed, protected and subsidized markets,” said García.
“APEC will be the basic motor,” that will enable us to pull through the global financial crisis,” added García. “The only way out is via less protectionism and more individual liberty.”
A week of APEC meetings kicked off Wednesday with senior officials meeting behind closed doors to lay out the agenda for the Nov. 21-23 Leaders’ Summit. U.S. President George W. Bush, as well as Chinese and South Korean Presidents Hu Jintao and Lee Myung-bak and Canadian Prime Minister Stephen Harper are scheduled to attend.
On Saturday, brushing aside criticism of globalization, G20 leaders revealed a series of measures designed to stabilize the international financial system, and fuel economic growth. They also agreed not to impose any new trade or investment barriers for the next year.
Despite criticizing the G20 leaders for “not understanding the crisis that lies ahead,” García is expected to push for free trade and investment, as well as working on modalities that could lead to a successful Doha Round. International cooperation and multilateral initiatives, as well as public-private partnerships, are also considered a complement to domestic policy actions taken ahead of the crisis.
Rejecting protectionism, a key objective of the APEC forum, will also be a major issue, said Peru Deputy Foreign Minister Gonzalo Gutierrez.
But APEC members are hoping that “APEC will have a much broader approach that is not only limited to the financial markets and the G20 declaration,” said Vice Minister of Commerce, Diego Llosa.
A draft document, similar to the G20 communiqué and to be adopted at the close of this year’s APEC, is expected to address key issues such as free trade and trade liberalization, corruption, technical and economic cooperation, corporate responsibility, APEC reform, the stagnated Doha Round and, according to Environment Minister Antonio Brack Egg, climate change.
On Thursday, APEC’s Business Advisory Council, or ABAC, concluded its 2nd Small and Medium Enterprises Summit, held in Lima’s Real Felipe fortress, built in the 18th century to guard against pirates.
Some 800 Summit participants considered ways to improve their business performance in order to survive in increasingly competitive and challenging markets.
These were reinforced by recommendations to be presented by ABAC, calling upon APEC Leaders to implement three support programs including technological infrastructure, financing capacity building and training to overcome the shortage of advanced management knowledge and skills.
“Countries (economically) sustained by large companies will suffer greatly because it’s very difficult to transform a pachyderm,” said García, during the Summit.
According to Lima’s Chamber of Commerce, direct foreign investment, via Peru’s small and medium-sized businesses, is expected to total $1 billion by 2011.
APEC is Peru’s number one trade partner and Singapore is the Andean country’s key destination in Southeast Asia for manufactured exports to the region. In 2006, total bilateral trade increased 55% from 2005 to total $45.2 million.
In Lima, where the APEC Leaders’ Summit is being held, 40,000 police are on a maximum state of alert.
Roadblocks have been set up and increased in number after a 23 year-old man, identified as Edwin Javier Valladolid Chunga, was arrested Sunday, hauling 36 war grenades in his backpack. Valladolid was “planning to carry out an attack in order to discredit (Peru),” said APEC Police Chief, Julio Vergara.
The arrest comes on the heels of a series of attacks by remnants of the Maoist Shining Path insurgency, who are now in the employ of drug traffickers. Three police officers were killed in the highland town of Ayacucho on Sunday, and guerrillas blew up an army convoy last month in the department of Huancavelica.
A total of $15 million have been invested by Peru to implement a Comprehensive Security Plan, integrated by the National Police, the Air Force, the Navy and the Peruvian Army. Last year, Australia spent $320 million on security for the 2007 APEC Leaders’ Summit.
Founded as an informal 12-member Ministerial-level dialogue Group forum in 1989, APEC has since become the premier forum for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region. The 21-member APEC trade bloc accounts for 60 percent of the world’s gross domestic product.
APEC and the WTO are complementary in that both are working towards the same goals of free and open trade and investment across borders. But APEC, unlike the WTO, is the only inter governmental grouping in the world operating on the basis of non-binding commitments. Decisions made within APEC are reached by consensus and commitments are undertaken on a voluntary basis.
Key to achieving APEC’s vision are what are referred to as the “Bogor goals” of free and open trade and investment in the Asia-Pacific by 2010 for developed economies and 2020 for developing economies. These goals were agreed by APEC Economic Leaders in Bogor, Indonesia in 1994.
APEC’s 21 Member Economies are: Australia; Brunei Darussalam; Canada; Chile; People’s Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; The Republic of the Philippines; The Russian Federation; Singapore; Chinese Taipei; Thailand; United States of America; Viet Nam.
