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Obama expects plan for Pacific free trade bloc by 2012, seeks to boost growth, create jobs
HONOLULU (AP) ' Pacific Rim leaders gathered for an annual summit in Hawaii pledged Saturday to work together to keep world growth on track, as President Barack Obama announced the broad outlines of a plan he said could serve as a model for a trans-Pacific free trade zone.
"There are still plenty of details to work out, but we are confident that we can do so. So we've directed our teams to finalize this agreement in the coming year," Obama said while seated beside leaders of eight other nations involved in the negotiations toward setting up what has been dubbed the Trans-Pacific Partnership.
"It is an ambitious goal, but we are optimistic that we can get it done," he said.
The trade zone can serve as a model for the region and for other trade pacts, increasing U.S. exports and helping to create jobs, a top priority, in the fastest growing region in the world, said Obama, who made promoting the so-called TPP a priority in hosting this week's summit in his hometown, Honolulu.
Much of the work by Obama and other leaders at the summit of the 21-member Asia-Pacific Economic Cooperation forum is aimed at fostering freer trade and closer cooperation to help fend off recession as Europe struggles to resolve its debt crisis.
"We have an enormous responsibility for supporting the wider world, a responsibility that no one nation could seek to carry alone ' it can only be borne if we stand shoulder-to-shoulder," Malaysian Prime Minister Najib Razak said in remarks to be delivered later Saturday at the East West Center, a Honolulu think tank.
By removing barriers and bottlenecks that slow business, APEC members hope to re-energize growth at a time when the world economy most needs dynamism in the Asia-Pacific region to offset the malaise spreading from crisis-stricken Europe. At the same time they are working toward a broader agreement, countries are continuing to forge separate free-trade deals.
The U.S. recently clinched long-sought free trade pacts with South Korea, Colombia, and Panama ' agreements that if ratified will bring to 20 the number of countries that have free trade agreements with the U.S.
On Friday, Vietnam and Chile signed a free trade agreement on the sidelines of the APEC meetings that will further boost the already thriving trade between the two in Chilean copper and steel and Vietnamese garments, rice and coffee.
The outline for the free trade pact announced by Obama and other leaders pledges to work toward eliminating tariffs and other barriers to trade and investment, facilitating trade and other business, harmonizing regulatory standards, aiding small and medium-size companies and contributing to development and poverty relief.
Japan, the world's third-largest economy, has also signaled it wants to join the negotiations on the Trans-Pacific Partnership, and the Obama administration hopes other nations will be wooed as well. But China, which some economists say is on course to overtake the U.S. as the world's biggest economy this decade, has appeared lukewarm about the Pacific trade pact, describing it as "overly ambitious."
China's reluctance to endorse such a plan likely reflects its wariness of being drawn into what has become a U.S.-led initiative, even though the current TPP membership includes only Chile, New Zealand, Brunei and Singapore. The U.S., Australia, Malaysia, Vietnam and Peru are negotiating to join.
Chinese President Hu Jintao, in a speech to business leaders on the sidelines of the summit, reiterated China's support for an earlier-proposed APEC-wide free trade zone. On Friday, the country's trade minister, nonetheless, said Beijing would seriously consider joining the TPP if invited.
Hu also expressed concern about the potential fallout from the debt crisis in Europe.
"There are obvious problems resulting from the sovereign debt crisis, causing volatility in global financial markets amid growing pressure from inflation on emerging markets," Hu said, calling the instability of the global economic recovery "a great source of uncertainty."
Warnings from the European Union that its debt crisis threatens to unleash a "deep and prolonged" recession has added urgency to the Asia-Pacific Economic Cooperation agenda.
Such a recession would be felt sharply in the U.S., where growth is already anemic, and in Asia, which relies on Europe as a big market for its cars, clothing, consumer electronics and other exports.
APEC's lack of negotiating power ' all decisions are by consensus ' means prospects for major changes are slim. But over the years the group's incremental efforts have helped build support for closer economic ties and freer trade.
There is a regional consensus on avoiding protectionism, and members from Russia to Chile are focusing on concrete ways to foster more dynamic, stabler growth through closer economic integration.
Such strategies include better food security, increased trade and investment in environmental products and services, better access to financing for smaller companies and faster customs clearances.
The aim is to make it "cheaper, faster, and easier to do business in the APEC region," said a statement released by APEC trade ministers on Friday.
Associated Press writers Ben Feller, Erica Werner and Jaymes Song contributed to this report.