Asia Pacific countries pressed Europe on Thursday to act more forcefully to quell its debt crisis, setting the tone for a summit overshadowed by growing alarm over the fallout from euro-zone upheaval.
U.S. Treasury Secretary Timothy Geithner and other APEC finance ministers agreed to shore up their own economies against Europe's troubles, warning in a statement of heightened downside risks to the global economy.
The crisis in Europe remains the central challenge to global growth, Geithner told reporters after ministerial talks ahead of a weekend gathering in Hawaii of leaders from Asia Pacific Economic Cooperation (APEC) forum members.
It is crucial that Europe move quickly to put in place a strong plan to restore financial stability, he said.
His remarks reflected mounting concern among the 21 APEC members about the spillover from Europe that already is starting to brake the pace of growth in one of the world's most economically dynamic regions. Geithner also made clear that the APEC summit would keep the heat on China to let its currency, which Washington says Beijing keeps artificially low for competitive advantage, to appreciate further. U.S. Secretary of State Hillary Clinton also lodged criticism against China, Washington's main rival in the region, on everything from trade practices to human rights.
She vowed a U.S. pivot toward the fast-growing region and asserted Washington's renewed leadership in what she called America's Pacific century. The summit, to be hosted by President Barack Obama in his native Hawaii, has been billed as an effort to make progress on forging a new free-trade area and an environmental technology pact, steps that could eventually foster global growth.
But finance ministers meeting on Thursday fretted about what they see as Europe's failure to take more decisive measures to sort out their debt problems. Italy has overtaken Greece as the epicenter of the crisis.
It is not being dealt with forcefully, Philippines Finance Minister Cesar Pursima told reporters in Honolulu, echoing the views of many of his Asia-Pacific colleagues.
GLOBAL GROWTH NEEDED
Geithner said the Pacific rim must act quickly on its own.
Asian economies will need to do more to stimulate domestic demand growth -- both so they are less vulnerable to slowdowns, such as the situation in Europe, and so they can continue to contribute to global growth, he said.
But there was no sign that the summit of countries representing more than half of global economic output would offer any direct measures to help the euro-zone cope with its crisis.
Rather, the focus was buffering themselves against the fallout.
A statement issued after the finance ministers' meeting, while making no direct mention of the euro zone, left little doubt that it was an overarching concern at the summit, as it was at last week's G20 summit in France. They pledged to take coordinated actions strengthen global recovery and said: Such risks need to be addressed decisively to restore confidence, financial stability, and sustainable growth.
The ministers also reaffirmed a G20 commitment to move more rapidly toward more market-determined exchange rate systems and enhance exchange rate flexibility -- a clear reference to China's yuan valuation.
The currency issue has been a major irritant between Washington and Beijing, which has become increasingly assertive in a region where Obama now wants to refocus U.S. attention.
U.S. Commerce Secretary John Bryson said the United States would feel the bite in lost business with Europe, but Asian trade could help fill the gap.
The ministerial talks also dealt with efforts to further open markets between Asia-Pacific members, which have almost 3 billion people and account for 54 percent of global gross domestic product.
Nine countries -- the United States, Australia, New Zealand, Vietnam, Malaysia, Singapore, Brunei, Chile and Peru -- are expected to say on Saturday they have reached the broad outlines of a proposed Transpacific Partnership (TPP) trade deal. Japan may also join, giving the pact greater heft.
Adding luster to the summit's trade agenda was the announcement in Geneva that Russia, an APEC member, had sealed its 18-year negotiation to join the World Trade Organization.
For Obama, who is winding down the costly U.S.-led wars in Iraq and Afghanistan, the APEC gathering is a chance to reassert U.S. leadership in a region where China poses a growing competitive threat. He will tout Pacific rim ties as a way to create jobs, considered crucial to his 2012 reelection chances.
The TPP pact, a possible template for an APEC-wide trade zone, would help inject the United States into the heart of Asia's regional trade architecture. China has moved ahead with a series of multi-nation trade agreements throughout Asia and has flexed its military muscle in the South China Sea.
While insisting the United States was not trying to constrain China, Clinton sent a message to regional allies that Washington would be a counterbalance to Beijing's economic and military influence and would demand it play by trade rules.
U.S. firms want fair opportunities to export to China's markets and a level playing field for competition, she said in a speech shortly after Chinese President Hu Jintao arrived.
Chinese officials have already expressed doubts about U.S. goals at APEC, including a green growth initiative that would cut tariffs on environmental goods and services, such as solar panels and wind turbines. (Additional reporting by Michael Martina, Stella Dawson; Writing by Matt Spetalnick; Editing by Anthony Boadle and Robert Birsel)