Bill English

By Ian Llewellyn of NZPA

Wellington, Nov 12 NZPA - The United States will be very cautious towards attempts by Pacific rim nations to liberalise trade in the region, Finance Minister Bill English said today.

Finance ministers of the 21-member Asia-Pacific Economic Cooperation (Apec) forum met in Singapore today ahead of their leaders this weekend.

President Barack Obama, Chinese President Hu Jintao and Japanese Prime Minister Yukio Hatoyama and Prime Minister John Key will be at the summit among others.

Mr English said his international colleagues had mostly been positive about their economies and moves towards trade liberalisation.

"The general mood was reasonably positive with the meeting dominated by Asian countries which are growing. So they are positive about the trade opportunities and that is good news for us," Mr English told NZPA.

New Zealand has trade deals with the numerous Asian countries in the region and they remained buoyant about expanding markets within those existing deals.

The United States though had been a ray of gloom at the finance ministers' meeting.

"The US clearly has a number of problems to work through domestically yet. They are cautious about progress on becoming part of the liberalisation of trade or any more trade agreements, but you get the sense that other Apec countries are going to push ahead anyway."

Associated Press reported a joint statement due to be released by the finance ministers says the key challenges facing the world economy in the post-crisis period include restoring growth potential, withdrawing stimulus packages and meeting the region's massive infrastructure needs.

"We are committed to supporting open trade and investment to advance Asia-Pacific and global prosperity and growth ... and (we) will actively resist projectionist measures," said the proposed statement.

Mr English told NZPA that the discussion over financial institutions was mainly about future policy.

"Because even in the countries where the banking systems have been stable such as New Zealand and Australia, there remains the question of what happens next time, whether they should have free access to guarantees or as some are suggesting that the banking system pays for any bail-outs."

Politicians had found it very difficult to defend bank bail-outs around the globe and some of the banking sector hadn't handled it well by quickly going back to big bonuses and salaries, he said.

There had also been a lot of discussion among ministers about getting on top of spending.

"In a way we have been through the easy bit politically just pumping money into economies to keep them afloat. That has pretty broad support, but there is a need to look ahead and getting on top of debt and spending," Mr English said.

Apec was founded 20 years ago to promote greater trade and integration around the Pacific Rim. Its scope has since expanded to encompass a wide range of issues, including climate change, energy security and food security for the millions of vulnerable poor in the region.

In a significant breakthrough, Apec government officials have agreed that the leaders should discuss a plan to abolish all trade restrictions on food.

The plan was recommended by the Apec Business Advisory Council, or Abac, a council of regional business leaders.

Abac says free trade in food would allow Apec members to use each other's strengths to produce the best and cheapest food for all.

Mr Key arrives in Singapore overnight New Zealand time.