Obama makes free trade push at Pacific Rim summit

 US President Barack Obama made a push for free trade across Asia and the Pacific, at a regional summit clouded by tensions between its biggest economies.

Pitching a free-trade pact that would group countries on both sides of the Pacific, Obama on Saturday said that "the security and prosperity of the American people is inextricably linked to the security and prosperity of Asia".

The US president said that seven of America?s 15 top trading partners were members of the Asia Pacific Economic Cooperation (APEC) forum, whose 21 member economies are meeting in the Japanese port city of Yokohama near Tokyo.

With an eye to his domestic audience, which this month delivered him a mid-term electoral drubbing, Obama added that "with every one billion dollars we sell in exports, 5,000 jobs are supported at home".

While a key aim of APEC is to liberalise the flow of goods, sharp divisions over trade have created tensions that surfaced at an earlier G20 summit in South Korea, especially between the United States and China.

Both economies accuse each other of undervaluing their currencies in order to make their goods more competitive abroad, and China has rejected a US proposal to take steps to reduce its huge trade surplus.

Stressing the point again, Obama said that "countries with large surpluses must shift away from an unhealthy dependence on exports and take steps to boost domestic demand. No nation should assume that their path to prosperity is simply paved with exports to America."

China's President Hu Jintao pledged gradual currency reform and efforts to promote free and balanced trade, but also said that other countries must not ask too much of emerging economies such as China.

"To ask them to take on responsibilities and obligations beyond their capabilities and development stage will do no good to international cooperation and world economic development," Hu told a business forum in Yokohama.

Obama said that the United States, which hosts next year's APEC summit in Hawaii, wants to pursue the Trans-Pacific Partnership (TPP), a proposed free trade zone that now includes Brunei, Singapore, Chile and New Zealand.

The United States, Australia and three other countries are now in talks to join the group, and other nations are eyeing the pact, which is seen as a vehicle towards a much wider Pacific Rim treaty.

While the United States and China, the world's number one and two economies, have sparred over currencies and trade, other lingering disputes between them and other key players also threaten to overshadow the APEC summit.

Without mentioning communist-ruled China, Obama stressed that democracy is "the most effective form of government the world has ever known".

"It will always be true that when leaders are accountable to their people, their people are more likely to prosper," he said.

Host Japan has been embroiled in a bitter row with China for two months, since its arrest of a Chinese fishing trawler captain in disputed waters sparked a barrage of protests and retaliation from Beijing.

Amid the spat, officials have announced no plans for a meeting in Yokohama between Kan and Hu, who had only an informal chat at the G20 meeting.

The row has however helped to reaffirm a 50-year-old US-Japan alliance that has been badly strained by a dispute over a controversial US airbase.

The premier of Japan, who has also been sparring with Russia in a separate territorial row, told reporters after meeting Obama: "I thanked him for continued US support while there are some issues over China and Russia".

"I told him that the Japanese people as well as our neighbours recognised that the US military presence is all the more important for the peace and security of this region," Kan said as he stood alongside Obama.

The US president called the US-Japan relationship "the foundation of our security and our prosperity".


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