APEC Pushes Free Trade

Echoes split with U.S. on economic policy

A second summit meeting, that of the Asia-Pacific Economic Cooperation (APEC) group of 21 nations, held in the wake of the G20 meetings that ended Friday saw a similar tone: the current economic policies of the U.S. were not popular with China. Although President Barack Obama tried to prevail upon China’s leader Hu Jintao to introduce changes into the Chinese economy that would allow more imports from the U.S., his efforts were largely unsuccessful. China is wary of slowing its economic growth by taking actions such as those recommended by Obama.

Reuters reported that Hu told APEC members, "Advanced economies have to cope with serious unemployment problems, while emerging market economies are confronted with asset price bubbles and inflationary pressure." He also said that protectionism was on the rise, and that it was a threat to the region because of its dependence on trade.

This summit differed from the G20 in that it made some real progress, continuing an agreement not to put new trade barriers in place and settling plans for a free trade region to link nations in the region. The plans for the Free Trade Area of the Asia-Pacific (FTAAP) would link the U.S., China, and Japan, the world’s three largest economies, with Asian and Latin American economies that are growing quickly.

China and the U.S. seem at a stalemate, with Obama characterizing China’s monetary policy as hindering U.S. exports, and China accusing the Fed’s QE2 of weakening the dollar not just in the quest of greater export trade but also contributing to the destabilization of other economies. China says that any monetary policy adjustments it may make will be gradual.

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