Sunday, September 10, 2006

APEC Wraps Up Meetings

Sources: Taipei Times, CNN, Business Week,

The Asia-Pacific Economic Cooperation Forum, whose 21 members make up half of the world’s trade and 60% of the world economic output, and includes nations such as the US and Canada, wrapped up its second and final days of meetings on Friday, September 8th. These meetings are designed to set the agenda for the November leader meetings in Hanoi.

The United States had wanted to encourage APEC nations, who were integral in reviving the Uruguay round of WTO, to kick-start the Doha talks. However, the Doha talks collapsed in July, and the APEC nations have pledged to restart the Doha round. APEC has long been a proponent for free trade, and made a fresh call for the Doha round. The Doha talks collapsed in July primarily due to disagreements on how to cut farm trade barriers. The US is a strong proponent of APEC trade liberalization because 7 of the top 10 US trading partners are APEC nations.

A second major issue addressed during the APEC talks revolved around the growing trade imbalances involving China. Various nations have blamed global trade imbalances on the Chinese exchange rate policies. For example, the US have accused China of keeping the yuan artificially low to keep Chinese exports attractive, but the Chinese refuted the claim by stating that “China only occupies less than 5 percent of global GDP…by no means can China’s exchange rate (regime) affect the global imbalances.” APEC nations, however, “recognized the importance of joint action toward an orderly readjustment of global imbalances in a way that sustains strong regional and global economic growth, and the shared responsibility that APEC economies have in bringing this about.”

Finally, the APEC nations pledged greater efforts against “terrorist financing.” However, no phrase was included on how to stop money flows for WMD—which was a reference to North Korea’s overseas bank accounts—much to the chagrin of US officials. Various individual APEC officials, however, did commit to stopping WMD financing, and warned against the assumption that APEC was weak or soft on WMD. Furthermore, the APEC grouping did release a statement pledging to “combat terrorist financing, money laundering, and other abuses of our financial system.”

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