Nov 15, 2010

APEC leaders pledges for free trade area at Yokohama summit

Leaders of the 21-member Asia-Pacific Co-operation (APEC) forum have pledged to establish  a regional free-trade area.

The agreement was announced on Sunday at the end of a two-day summit held in Yokohama of Japan.

The initiative would link the world's three biggest economies - the United States, Japan and China.

However, deep differences remain - chiefly between the US and China - over trade imbalances and currency distortions.

The USA aims to increase their exports to the region and considers China's cheap currency is a barrier to that goal.

Chinese President Hu Jintao has said any change will only be made at Beijing's own pace.

In their final declaration, APEC leaders reaffirmed their "unwavering commitment to achieving free and open trade and investment in the region".

They also pledged to take "concrete steps toward realising a Free Trade Area of the Asia-Pacific", but gave no timetable.

The declaration - entitled Yokohama Vision - also rejected any fresh barriers to trade and investment.

"We commit to take steps to roll back trade distorting measures introduced during the (financial) crisis."

The document included a commitment to move toward more "market-determined exchange rate systems".

However, no major specific attempts were set forward on how these targets will be achieved.

Observers think that the APEC meeting may help to cool down the hot retaliations what happened between Japan and China earlier.

Relations have been tense since early September, when a Chinese trawler and Japanese patrol ships collided near disputed islands in the East China Sea.

President Hu held talks with Japanese Prime Minister Naoto Kan on the sidelines of the summit - their first formal meeting since the row.

"I recognise that ties between Japan and China have taken a big step towards improvement," Japanese Deputy Chief Cabinet Secretary Tetsuro Fukuyama told reporters.

Tokyo's ties with Russia have also been coming under strain recently, after Russian President Dmitry Medvedev visited one of four islands in the Pacific claimed by both countries.

The dispute was discussed by Mr Medvedev and Mr Kan, also on the sidelines of the meeting.

Mr Kan said the Russian president's visit had inflamed the feelings of the Japanese people, and the two nations must build mutual trust.

Speaking afterwards, Russian Foreign Minister Sergei Lavrov told reporters that his country's position was unchanged - and that Mr Medvedev would "decide for himself which region of Russia to visit".

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