Leaders debate free trade versus regulation dichotomy (2nd Roundup)

By Veronica Sardon Nov 22, 2008, 7:59 GMT

Lima - The annual meeting of the Asia-Pacific Economic Cooperation (APEC) forum is to start formally on Saturday, but several heads of state had already warmed up to face their peers at the APEC CEO Summit Friday.

World leaders warned against protectionism and called for seizing opportunities amid the widening financial crisis.

Peruvian President Alan Garcia, a staunch advocate of free trade, stressed that the current pains 'should not be treated with ... protectionism.'

'The explosion of the financial and real estate crisis that now threatens to move onto the real and material sector of the economy is forcing governments into rushed meetings and economic officials into thinking up initiatives to face the situation,' he said, adding that the world should stay away from over-regulation.

Chinese President Hu Jintao noted that nations must draw 'lessons from the current setting and that 'governments must strengthen guidance and oversight.'

Leaders of the 21 economies that make up APEC will have to address these problems when they meet Saturday and Sunday to discuss the economic crisis and other issues: How to promote growth while fixing what is broken and how to establish stricter rules while giving markets room to flourish.

'We are all in this together,' said Australian Prime Minister Kevin Rudd.

Indonesian President Susilo Bambang Yudhoyono agreed that the crisis has made it painfully obvious that what happens at one end of the world impacts everyone.

The crisis has spread 'from some areas of the world to the entire globe, from developed countries to emerging countries and from the financial sector to the real economy,' Hu said.

In this context, whatever the nature of regulation that each APEC economy advocates, the forum will have to arrive at an agreement this weekend for the sake of stability and growth that benefits all.

APEC should make the most of its diversity, interdependence and complementarity at the economic level to get through the crisis, Hu stressed.

Earlier, the Chinese leader met with former Taiwanese vice president Lien Chan in a historic meeting that was the first high-level encounter between both parties outside China or Taiwan.

The two met at the Los Delfines Hotel in the Peruvian capital ahead of the APEC, to which member economy Taiwan has for the first time been able to send a high-level representative.

In a press conference after meeting with Hu, Lien refused to provide too many details and said simply that the two parties exchanged 'views on APEC's agenda' and that 'cross-strait relations have moved forward in the direction of peace.'

Also on Friday, United States President George W Bush arrived in Peru for his last international gathering as leader of the largest economy in the world.

Bush, who will hand over power to president-elect Barack Obama in January, landed in Lima as a lame-duck president amid tight security but mild protests.

The US president's Air Force One landed at a military base near Lima's international airport, where he was met by Peruvian Defence Minister Antero Flores Araoz. Bush made no comments and got into a black limousine that was escorted by a score of SUVs.

Hundreds of activists from various indigenous, student and workers' groups gathered in different areas of Lima to protest his presence in the Peruvian capital. About 1,500 police officers were deployed to keep the situation under control, said police commander Carlos Paz.

Earlier Friday, five university students were arrested in Trujillo, about 550 kilometres north of Lima, as they attempted to paint anti-Bush slogans on walls, Peruvian radio station RPP reported.