Obama under fire on trade as APEC leaders meet
Posted: 14 November 2009 1629 hrs

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SINGAPORE: US President Barack Obama came under fire Saturday from Asia-Pacific leaders for backsliding on free trade as a regional summit devoted to driving the world economy out of crisis opened in Singapore.

"President Obama is facing severe political constraints that run counter to free trade," Mexican President Felipe Calderon said, complaining about US foot-dragging on full implementation of the NAFTA pact for North America.

"The cruel paradox is that within a global economy, what really kills companies is inefficiency and lack of competition. Therefore protectionism is killing North American companies," he said at a pre-summit business forum.

"So I think this has to do with the fact that the US government is under strong political pressure that really is not being counteracted from the political perspective" of the Obama administration.

The US Congress has turned even more sour on free trade after the worst economic crisis since World War II. One landmark pact with South Korea is languishing and critics say the White House has done little to revive it.

The US economy is perking up but unemployment has breached 10 per cent and economic leaders, including the heads of the International Monetary Fund and World Bank, warned in Singapore that protectionism could choke off recovery.

The warnings came as a two-day summit of the Asia-Pacific Economic Cooperation (APEC) forum began. Obama was due to arrive later in Singapore, where he will join the 20 other leaders, after concluding a visit to Tokyo.

In a speech in Tokyo, Obama reaffirmed a US commitment to finally concluding the World Trade Organisation's Doha round of talks - a long-running bid to tear down barriers to global commerce.

"In this new era, opening other markets around the globe will be critical not just to America's prosperity, but to the world's," the US president said.

"We must strengthen our economic recovery, and pursue growth that is both balanced and sustained," he said, in a call to Asian exporters including China to wean themselves off US consumers and build up their own demand.

"Now that we are on the brink of economic recovery, we must also ensure that it can be sustained."

Obama's comments underlined a central theme of the APEC summit - that the world economy must be rebalanced so that the United States is no longer the sole cylinder firing global growth.

In their closing declaration, the APEC leaders are expected to vow to explore a Pacific-wide free-trade area covering 2.6 billion people and more than half of the world's economic output.

But citing the stalled South Korean FTA, Singapore's Minister Mentor Lee Kuan Yew said Friday there was "little chance" of US lawmakers agreeing to a far more ambitious trade pact any time soon.

Speaking alongside Calderon, Australian Prime Minister Kevin Rudd touted his idea for a broader Pacific-wide community embracing security issues as well as economic integration, with US involvement at its heart.

Thai Prime Minister Abhisit Vejjajiva said "we all recognise the importance of the United States for the region on all issues", including trade and security.

"And I hope that in the next couple of days, we can encourage the United States to take an active and leading role also to make sure that Copenhagen and Doha are successfully completed," he said.

The Danish capital will next month host a pivotal meeting aimed at securing a new treaty to combat climate change. Leadership from both the United States and China is considered crucial for progress on the climate and trade fronts.

But heading into the APEC summit, China lashed out at a series of US trade measures against Chinese goods.

"These measures have bad and profound implications for free international trade," Commerce Minister Chen Deming told reporters Friday, setting a feisty tone as Obama prepares to head from Singapore to China next week.

"In my view, these trade protectionist measures will impede the recovery of international trade and will put the world economy in a more difficult situation," he said.

- AFP/yb