[Several officials acknowledged that the gathering, held in the luxurious confines of the beach resort of Nusa Dua on the Indonesian island of Bali, produced even fewer substantive accomplishments than last year’s meeting, where the group approved an environmental goods and services accord that called for the tariffs on 54 products, like solar panels, to be reduced to 5 percent or less.]
By Jane Perlez And Joe
Cochrane
NUSA
DUA, Indonesia — Leaders at the Pacific Rim economic summit
declared at the end of their two-day meeting here Tuesday that the global trade
talks, known as the Doha round, were at an “impasse” and urged trade ministers,
due to meet here in December, to get negotiations back on track.
In an unusually strongly worded statement, the
leaders of the Asia-Pacific Economic Cooperation forum, suggested the talks,
run by the World Trade Organization and designed to reduce tariffs,
particularly for the least developed countries, risked collapse.
“We are now at the 11th hour to put the
negotiating function of the World Trade organization back on track,” said the
statement, which was read by the host of the summit, President Susilo Bambang
Yudhoyono of Indonesia.
The summit was clouded by the absence of
President Obama, who stayed in Washington to try to resolve the fiscal crisis.
Without Mr. Obama, who was represented by Secretary of State John Kerry, a
brighter spotlight fell on China’s new president, Xi Jinping.
There was relatively little to show for the two
days of meetings, dinners and lunches attended by the leaders of 21 economies
in the Pacific Rim region, Taiwan and Hong Kong.
Several officials acknowledged that the
gathering, held in the luxurious confines of the beach resort of Nusa Dua on
the Indonesian island of Bali, produced even fewer substantive accomplishments
than last year’s meeting, where the group approved an environmental goods and
services accord that called for the tariffs on 54 products, like solar panels,
to be reduced to 5 percent or less.
Still, the urgency of rescuing the Doha round
from collapse caught the summit’s attention, said Allan Bollard, executive
director of the APEC Secretariat, which is based in Singapore.
“There’s a strong message they really want Doha
to work, but there’s also at the same time quite a high expectation with real
big problems around it and something of a sense of frustration about that,” he
said.
“In realistic terms, they are feeling that there
has to be some deliverables out of Doha – an expectation that there could be a
‘Doha Light.’ They could go in a number of different ways in the next couple of
months.”
But in fact, Mr. Bollard added, an agreement has
to be reached by early November, a month before a gathering of 159 trade
ministers in Bali in early December. These ministers rarely engage in the
nitty-gritty negotiations, he said.
The logjam over the Doha round has allowed
efforts at regional trade agreements like the Trans-Pacific Partnership
promoted by the Obama administration to gain steam instead.
But that proposed partnership, a group of 12
countries led by the United States in negotiations designed to lower tariffs
across a broad range of items, has run into problems.
At the APEC gathering here, the U.S. trade
representative, Michael Froman, urged all the parties – including some of the
biggest economies in the region like Japan, Australia, and Canada – to finalize
the pact by the end of the year. This goal seemed almost impossible,, officials
from several of the participating countries said.
China has not been invited to join the
Trans-Pacific Partnership, and has proposed its own trade grouping, the
Regional Comprehensive Economic Partnership.
In its account of the APEC summit, the China
Daily, an English language newspaper in China, slammed the Trans-Pacific
Partnership. It said the negotiations over it were “confidential talks” and the
pact was “widely considered a new step for the United States to dominate the
economies in the Asia-Pacific region.”
At the APEC gala dinner Monday night, the
leaders wore Indonesian shirts specially tailored for the occasion. Mr. Kerry
was given a purple shirt made of a silk-like Balinese fabric called “endek”
with a design that represented nine deities of Hinduism. Bali is a Hindu island
in the Muslim-majority country of Indonesia.
Mr. Xi wore a red batik shirt, and the Russian
leader, Vladimir V. Putin, was dressed in a green one. Before the leaders sat
down to the banquet, Mr. Yudhoyono played “Happy Birthday” on a guitar for Mr.
Putin, who celebrated his 61st birthday Monday.
The custom of wearing local garb at the
gathering started in 1993 when President Clinton distributed bomber jackets to
be worn for the group photo at the summit that year in Seattle. In 2011, President
Obama, the host of the summit in Honolulu, tried to end the tradition, calling
the local garb – which each year seemed to become more awkward – “silly
shirts.” That year, the leaders posed for their photo in business wear.
Next year’s APEC summit will be held in Beijing.
At a news conference called by the Chinese to discuss their facilities for the
summit in the Chinese capital, journalists asked about the severe air pollution
that prompts many residents to wear face masks.
Zhao Huimin, the director general of the foreign
affairs office of Beijing’s municipal government, did not say what specific
measures would be taken to reduce the pollution levels.
But, he said, there was little to worry about
because the leaders would meet at a conference center at Yangi Lake in the
Hairou district of Beijing, about an hour outside the city. The center, which
was the site of the World Conference on Women in 1995, was in the suburbs, he
said.
*
[There is plenty of evidence that the United States remains engaged globally on many levels, with the dual commando raids on targets in Africa this weekend the most recent. But the partial shutdown of the United States government has shown again that Washington’s problems extend beyond American borders. Effectively grounded by the political crisis at home, President Obama was absent from a summit meeting of Pacific Rim leaders in Indonesia on Monday, giving China greater opportunity to highlight its role in the region.]
LONDON
— The bitter fiscal stalemate in Washington is producing nervous
ripples from London to Bali, with increasing anxiety that the United States
might actually default on a portion of its government debt, set off global
financial troubles and undercut fragile economic recoveries in many countries.
Five years after the financial crisis in the
United States helped spread a deep global recession, policy makers around the
world again fear collateral damage, this time with their nations becoming
victims not of Wall Street’s excesses but of a political system in Washington that
to many foreign eyes no longer seems to be able to function efficiently.
There is plenty of evidence that the United
States remains engaged globally on many levels, with the dual commando raids on targets in
Africa this weekend the most recent. But the partial shutdown of the United
States government has shown again that Washington’s problems extend beyond
American borders. Effectively grounded by the political crisis at home,
President Obama was absent from a summit meeting of Pacific Rim leaders in
Indonesia on Monday, giving China greater opportunity to highlight its role in
the region.
One of the attendees, President Vladimir V.
Putin of Russia, provided a possibly sardonic statement of sympathy for Mr.
Obama. “We see what is happening in U.S. domestic politics and this is not an
easy situation,” Mr. Putin said, adding, “If I was in his situation, I would
not come, either.”
In Europe, the effort to reach a big new trade
accord with the United States is at a standstill, with many government agencies
in Washington operating with skeletal staffs. And as worrisome as that kind of
delay is in Europe, it is only a precursor to the almost certain economic
fallout if the United States does not raise the debt limit and defaults for the
first time on government securities.
Foreigners often complain, usually with some
forbearance, that the United States is so powerful that its president is in
some important sense their president, too. In their case, however, they lack
the opportunity to cast a vote.
There is not much that any foreigner can do
about Mr. Obama’s confrontation with the House speaker, John A. Boehner, who
said Sunday that his Republican members would not accept a clean bill —
one with no conditions — that would raise the American debt limit before the
government hits its borrowing limit and risks technical default as soon as next
week. At the same time, Mr. Boehner has told colleagues privately that he would
avert a default, but whether he actually has the ability to do so remains
uncertain.
“The international community is asking, ‘Does
the U.S. still have the will to act?’ ” said Xenia Dormandy, a senior
fellow at London’s Chatham House and a former American official in the State
Department and the National Security Council under President George W. Bush.
“Both the Syria vote and the current budget
crisis are nerve-racking for the world,” she said, referring to Mr. Obama’s
sudden decision to ask Congress to authorize a strike on Syria and then
changing his mind.
Alain Frachon, a columnist and former Washington
correspondent for the French newspaper Le Monde, said, “Washington is looking
more like the Italian political system, with its permanent crises, and not a
presidential system, as before.”
“People are worried about the debt ceiling — it
could be the little drop that could trigger another crisis in financial
markets,” he said. “And it’s just when there was the perception for the first
time in the long sovereign debt crisis that there is a window of opportunity to
breathe a little bit, and to introduce a bit more suppleness into the way we’ve
managed it.”
The anxiety is all over Europe, Mr. Frachon
said, and it comes just as Greece and Spain seem to be turning around, as there
are spurts of growth that promise an end to recession, and as Germany has
gotten through its elections and Rome through another political crisis. Another
financial meltdown would hurt France, too, he said, not just Greece, Portugal
and Spain.
“People don’t want to see all this fragile
equilibrium destabilized by a possible financial crisis provoked in
Washington,” he said.
Jean-Paul Fitoussi, an economist at the Institut
d’Études Politiques de Paris, said a default would slow the American economy
and depreciate the dollar, “so it would lead to a loss of competitiveness in
Europe at the very moment when all policies in Europe are aimed at increasing
competitiveness, and that would be very bad news.”
Perhaps worse, he said, is that “the banking
system in Europe remains fragile, so more bad news could have unforeseen
consequences on the world’s financial system.”
The United States has gone through government
shutdowns before, Mr. Fitoussi noted, but this time it feels different, even if
it turns out to be short-lived.
“Perhaps we have not completely understood the American
Constitution, and the effective power of the president is not as strong as we
believed,” he said. “And maybe it’s because Obama is not using his
constitutional power very well.”
The weekend military strikes on terrorist
targets in Libya and Somalia are a perfect indication that the American
government can act when its direct interests are at stake, said Ms. Dormandy of
Chatham House. But the deeper question is whether a more insular, less globally
active United States is emerging for the longer term, or is just a function of
the Obama administration’s reaction to events.
“The jury is still out,” Ms. Dormandy said, “but
I would say it seems like a more profound transition.”
Alexander Lambsdorff, a member of the European
Parliament for the German Free Democratic Party, sees a possible benefit for
the euro and the euro zone if the United States defaults, however briefly.
Investors will seek an alternative to the dollar in German, Dutch and Finnish
bonds, he said. “If European leaders have proven one thing,” he said, “it is
their resolve to keep the euro afloat and their countries out of default.”
Mr. Lambsdorff said that he admires the United
States Constitution, but that the founders never imagined “a media democracy.”
The weakness of the American system is in the constant political campaigning
required for the House of Representatives, he said.
“In the permanent campaign mode the
representatives find themselves, there is an incentive to be more radical and
less compromising,” he said. “But no democracy works without compromise, and if
compromise starts to be elusive, then a democratic system has to rethink
itself.”
