(DT) - Pacific Rim leaders met Sunday to propel ambitions for a vast free-trade pact, concluding a summit that has been overshadowed by economic wrangles that proved a setback at the G20 summit.US President Barack Obama made an appeal to tear down trade barriers Saturday as the 21 members of the Asia Pacific Economic Cooperation (APEC) forum gathered under the cloud of tensions between its biggest economies.
Obama also pushed China on its flood of exports aided by a cheap yuan, undeterred by a knockback at the Group of 20 summit in Seoul last week, which rejected US policy proposals to rebalance the global economy.
Voicing support for an emerging treaty that would group countries on both sides of the Pacific, Obama said that "the security and prosperity of the American people is inextricably linked to the security and prosperity of Asia".
He said that the United States, which hosts next year's APEC summit in Hawaii, wants to pursue the Trans-Pacific Partnership (TPP), a proposed free trade zone that now includes Brunei, Singapore, Chile and New Zealand.
The United States, Australia and three other countries are now in talks to join the grouping, which would eliminate most tariffs and other trade barriers and is seen as a vehicle towards a much wider Pacific Rim treaty.
APEC's grand plan is for a Free Trade Area of the Asia Pacific (FTAAP) that would link economies from China to Chile and the United States, but it currently remains an undefined and long-term goal.
With WTO negotiations in limbo, and warnings rife of a return to protectionism, talks to expand the TPP seem to be the only hope of regaining momentum in global trade reform, analysts say.
Leaders of the TPP group met for the first time in Yokohama on Sunday, in an advance hailed by Chilean President Sebastian Pinera who said the summit-level talks would now become a regular event.
"We cannot lose time," he said. "We have to move fast. And for that, we need a lot of leadership and courage," he said in an interview with the Nikkei business daily Saturday.
South Korea's President Lee Myung-Bak said according to a Japanese newspaper report Sunday that his country was also eyeing the TPP.
"Every country is considering it. South Korea is one of them," Lee said in an interview with the Asahi Shimbun. "I think it has a symbolic meaning although actual effects are still unknown."
Peru's trade minister told Dow Jones Newswires that China would not attend the TPP summit but that he hoped the world's second-biggest economy would eventually become a part of the discussions.
"I would really like China to join the group," Eduardo Ferreyros told Dow Jones Newswires in an interview.
Other economies are watching closely and could also jump onto the bandwagon, but many are torn between not wanting to be left out, and reluctance to make the deep commitments TPP membership could require.
During the APEC talks, Chinese President Hu Jintao also reiterated Beijing's commitment to "peaceful development" after Beijing and Tokyo sank into a bitter territorial dispute sparked by Japan's arrest of a Chinese fishing captain in September.
In a diplomatic breakthrough Saturday, Hu and Japan's Prime Minister Naoto Kan held formal talks, their first since the row started, and emerged with warm comments that represented a major thaw.
Kan met with Obama Saturday and thanked him for US backing in the dispute with China, and a separate territorial dispute with Russia.
"I told him that the Japanese people as well as our neighbours recognised that the US military presence is all the more important for the peace and security of this region."
Many Asian nations have viewed with alarm China's newly assertive posture on territorial issues this year, and welcomed Washington's efforts to re-engage with a region where it is seen as an important counterbalance.
