Obama Pacific trade bid gathers steam

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Front row (L-R), Australian Prime Minister Julie Gillard, Russian President Dmitry Medvedev, US President Barack Obama, Prime Minister of Japan Yoshihiko Noda; second row from left Malaysia Prime Minister Najib Razak, Republic of Korea President Lee Myung-bak, Mexican Trade Minister Bruno Ferrari and Papua New Guinea Prime Minister Peter O'Neill on November 13, 2011 in Honolulu, Hawaii.

US President Barack Obama's bid to create the world's largest free trade zone across the Pacific gained momentum as Canada and Mexico followed Japan into accession talks.

At a regional summit in his native Hawaii, Obama said harnessing the huge trade potential of the dynamic region was vital as he wooed countries from across the Pacific Rim into the US-led Trans-Pacific Partnership (TPP).

"Today we have got a chance to make progress towards our ultimate goal which is a seamless regional economy," Obama told the Asia-Pacific Economic Cooperation (APEC) forum, which accounts for more than half the world's GDP.

"I want to emphasize that the Asia-Pacific region is absolutely critical to America's economic growth," Obama said.

"We consider it a top priority. And we consider it a top priority because we're not going to be able to put our folks back to work and grow our economy and expand opportunity unless the Asia-Pacific region is also successful."

In another key priority for Obama, APEC -- which has 21 members including China, Japan and Russia -- pledged to remove barriers to green trade by limiting tariffs on environmental goods to five percent by the end of 2015.

Despite protests by China that the US agenda was overly ambitious, APEC members also made a non-binding promise to cut energy intensity -- the power used compared with the economy -- by 45 percent by 2035.

The Trans-Pacific Partnership was once an obscure pact among four APEC members -- Brunei, Chile, New Zealand and Singapore. But Obama transformed it into the cornerstone of a US free trade drive with Australia, Malaysia, Peru, the United States and Vietnam now also in the talks.

Japan, the world's third-largest economy, committed to joining the negotiations on the eve of the summit. Mexico and Canada followed suit on Sunday with Canadian Prime Minister Stephen Harper telling reporters: "We are expressing our formal intention to join the Trans-Pacific Partnership."

The TPP, whose 12 interested parties account for almost 40 percent of the global economy and some 800 million consumers, would strike down tariffs and trade barriers and inject momentum to liberalization hopes bogged down by inconclusive talks on the Doha round.

The notable absentee is China, the world's second largest economy, and tensions over economic policy threatened to bubble over as Obama and Chinese President Hu Jintao held talks in Hawaii on the sidelines of APEC.

The United States has not explicitly ruled out China's entrance into the TPP, but Secretary of State Hillary Clinton has linked the "21st century" trade agreement to fundamental values including openness and labor standards.

Obama, seeking re-election next year as many heartland Americans think they lost their jobs to lower-wage China, told Hu on Saturday that Americans were "impatient" for a change in Beijing's economic policy.

Washington says that China keeps its yuan currency artificially low to boost its exports and complains that Beijing is lax on intellectual property standards, penalizing US innovation.

Despite swirling optimism about the TPP, Obama has acknowledged major obstacles must be overcome before a deal can be reached. Experts are skeptical that a US timeframe for concluding a concrete pact in 2012 is realistic.

Some farm groups in Japan and the United States have both voiced alarm that they would be swamped by global competition.

Obama and First Lady Michelle hosted a Hawaiian reception on Saturday evening on Waikiki Beach, in a rare informal opportunity for top world leaders.

But even with smothering security along the beach, one demonstrator managed to get through -- a popular Hawaiian recording artist who was enlisted to perform but, in a subtle protest, sang in support of the "Occupy" movement.

Makana, who goes by one name, told AFP that he pulled open his jacket to reveal a T-shirt that read "Occupy with Aloha," using the Hawaiian word whose various meanings include love and peace.

He then sang his new song "We Are The Many," playing it repeatedly for 40 minutes.

Obama disappointed those hoping to see Japanese Prime Minister Yoshihiko Noda in a Hawaiian shirt or Australian Prime Minister Julia Gillard in a grass skirt as he scrapped the tradition of kitting out APEC leaders in local garb for the obligatory end of summit "family photo."

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