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APEC countries agree to launch massive new free-trade zone

The 21 members of the Asia-Pacific Economic Cooperation (APEC) agreed Sunday to 'take concrete steps toward realizing a Free Trade Area of the Asia-Pacific' in coming years.

By Correspondent / November 14, 2010

Russian President Dmitry Medvedev meets with US President Obama on the sidelines of the the APEC summit in Yokohama, Japan, Sunday.

Dmitry Astakhov/RIA Novosti/AP

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Yokohama, Japan

Asia-Pacific leaders today agreed to press ahead with plans to create an expansive regional free-trade zone in coming years.

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After two days of talks in the Japanese port city of Yokohama, the 21 members of the Asia-Pacific Economic Cooperation (APEC) agreed to "take concrete steps toward realizing a Free Trade Area of the Asia-Pacific [FTAAP]," which will link fast-growing economies in the region with the world’s three biggest in the United States, China, and Japan.

The free-trade zone, which Japanese Prime Minister Naoto Kan said may start by 2020, would slash tariffs on imports of everything from automobile parts to food in an area encompassing more than half the world’s economic production and two-fifths of its trade.

The agreement on trade contrasted with a failure to agree on how to resolve longstanding territorial disputes that have recently soured relations between Japan and its neighbors. But those disputes were not enough to overpower common economic interests.

“Although they are different subjects, it is still possible to see progress on the territorial issue as our economic relations deepen,” said Mr. Kan, despite growing domestic pressure to take a tougher line on territorial claims.

'Yokohama Vision'

In their “Yokohama Vision,” APEC leaders said, “[T]rade and investment liberalization and facilitation will continue to be APEC’s core objective. We have agreed that now is the time for APEC to translate FTAAP from an aspirational to a more concrete vision.” But that consensus – in fact a reaffirmation of an agreement reached by the body’s finance and foreign ministers last week – could not hide serious differences over economic policy and territorial claims.

President Obama returned to Washington Sunday after a 10-day, Asia-wide trip that culminated in a failure to close the gap with China over exchange rates.

Beijing has resisted pressure to allow its currency, the yuan, to rise and to make other adjustments that would help US exporters gain a foothold in the world’s second-biggest economy.

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