November 11, 2014 / 3:03 AM / in 3 years

Xi urges faster APEC talks on China-backed free trade area

BEIJING (Reuters) - The global economic recovery is unstable and nations in the Asia Pacific Economic Cooperation (APEC) bloc should speed up free trade talks to spur growth, Chinese President Xi Jinping said on Tuesday.

China's President Xi Jinping bows after speaking at a news conference for the Asia Pacific Economic Cooperation (APEC) Summit at the International Conference Center in Yanqi Lake, north of Beijing, November 11, 2014. REUTERS/Goh Chai Hin/Pool

Speaking at this year’s APEC summit in Beijing, Xi said the 21-member forum had agreed that economic integration was the “driving force” behind sustained strong growth and APEC “should continue to play a leading and coordinating role in pushing forward this process”.

APEC, which includes the United States, China, Japan, South Korea, Indonesia and Canada, groups countries which account for 40 percent of the world’s population, 54 percent of its economic output and 44 percent of trade.

Xi urged members to speed up talks on a trade liberalization framework called the Free Trade Area of the Asia Pacific (FTAAP) that is being pushed by Beijing. APEC had approved work towards the establishment of FTAAP, which Xi said was a “historic step”.

“Currently, the global economic recovery still faces many unstable and uncertain factors. Facing the new situation, we should further promote regional economic integration and create a pattern of opening up that is conducive to long-term development,” Xi said.

“We should vigorously promote the Asia-Pacific free trade zone, setting the goal, direction and roadmap and turn the vision into reality as soon as possible.”

Some see a proposed study on the FTAAP plan, which will eventually be presented to APEC leaders for approval, as a way to divert attention from the 12-nation Trans-Pacific Partnership (TPP) trade agreement backed by the United States.

China is not part of the TPP and has not been enthusiastic about the initiative. Beijing fears that the TPP is being used by Washington to either force it to open markets by signing up or else isolate it from other regional economies as trade is diverted to TPP signatories.

The TPP is widely seen as the economic backbone of U.S. President Barack Obama’s “pivot” to Asia, what some experts view as an attempt to balance China’s rise by establishing a larger U.S. presence in the region.

U.S. Trade Representative Michael Froman told reporters there was significant momentum toward building the TPP.

“All the countries are very focused on doing that, but we want to make sure that we get it right,” he said.

Business leaders attending the APEC forum have been looking for signs of progress on the TPP, which had been stalled since September, especially as China continues to push for the FTAAP.

Xi was quoted by state news agency Xinhua on Monday as saying that FTAAP “does not go against existing free trade arrangements which are potential pathways to realise FTAAP’s goals”.

Japanese Prime Minister Shinzo Abe welcomed China’s efforts this year on crafting a roadmap for the FTAAP scheme.

“Looking beyond TPP, we also have in sight the realisation of FTAAP that will create an even bigger market,” Abe told a news conference. “At this APEC summit, we were able to create a roadmap for that.”

Efforts must also be made to regain trust in World Trade Organisation talks, which are “endangered due to opposition from a small number of members,” Abe told a morning session of the APEC forum, according to Japan’s foreign ministry.

Additional reporting by Sui-Lee Wee, Koh Gui Qing, Leika Kihara, Matt Spetalnick and Megha Rajagopalan; Editing by Raju Gopalakrishnan and Nick Macfie

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