KEY POINTS:
Some of the biggest names in world business met in Wellington today to warn governments around the world not to give in to pressures for short-term regulatory and protectionist solutions to financial woes.
Members of the Asia-Pacific Economic Cooperation business advisory council (Abac) strongly urged governments to successfully conclude the World Trade Organisation's (WTO) Doha Round.
They also called for the governments to meet commitments made at the last November's G20 crisis meeting in Washington - supported later that month by Apec leaders in Lima, Peru - and set up a system for monitoring compliance with those commitments.
Today's meeting, the first of the year for Abac, was the first in New Zealand for the body since 2004.
Delegates representing 21 economies again welcomed the November commitments to refrain from raising new barriers to investment or trade in goods and services over the next 12 months.
The group invited Apec to join it in monitoring the G20 undertakings to address the global financial challenges and WTO commitments despite concerns over rising protectionism.
"Despite the drastic deterioration we have seen in the global economy since then, the economic fundamentals that have underpinned the remarkable rate of economic growth in the Apec region over the past decades still hold true," said Abac's 2009 chairman, Teng Theng Dar, chief executive of Singapore's Business Federation.
"Trade must be encouraged, not restricted," said Mr Teng.
"Investment flows should not be constrained.
"We are increasingly concerned that stimulus packages contain protectionist elements and that some economies have alarmingly shown signs of reversing the course of openness, putting in place measures to protect their markets.
"More than ever, it is imperative to keep trade and capital flowing and to restore market confidence."
The Abac concerns over protectionism rang particularly loudly in New Zealand and Australia, which have railed against the European Commission (EC) for re-activating export refund subsidies for milk products on January 23, to help farmers find markets outside the European Union (EU).
Europe had already funded financial support for private storage schemes for butter on January 1.
Buying butter and skimmed milk powder into intervention will resume on March 1 and remain open until the end of August, and EC president, Jose Manuel Barroso, last week suggested an additional 500 million euros ($1.25 billion) to help dairy farmers.
In New Zealand, agriculture minister David Carter, and trade minister Tim Groser, have complained the export subsidies amount to "a major step backwards" in the direction of traditional, artificial market support.
They are also worried the subsidies may trigger similar behaviour from the United States. Tom Suber, president of the US Dairy Export Council, has said the EU subsidies will have "a major negative effect on world dairy trade".
Abac said today it would focus on three priorities: accelerating regional economic integration; championing a model of sustainable growth; and strengthening capacity building and enhancing connectivity.
The interests of small and medium enterprises (SMEs) will be addressed across all discussions.
In the medium-term Abac is also working on recommendations to achieve free and open trade and investment in the region.
"Although we are focusing on the current crisis, we cannot lose sight of Apec's long-term goals as part of efforts to grow trade and investment," Mr Teng said.
Abac members also discussed with senior Apec officials trade and investment liberalisation, physical connectivity and ease of doing business.
Other issues discussed during the Wellington meeting included trade financing, regional financial cooperation, strengthening banking systems and promoting lending to SMEs, financial inclusion, public-private partnership in infrastructure, strengthening intellectual property rights, investment facilitation, labour mobility, energy security, and the Apec food system.
Recommendations will be presented to Apec leaders at their annual meeting in Singapore during November.
Abac comprises three members from each of the 21 Apec economies, appointed by leaders in each economy.
The New Zealand delegates are John Blackham, chief executive of XSOL Ltd, former Zespri chief executive Tony Nowell, and Gary Judd, chairman of ASB Bank.
The other delegates included Oleg Deripaska, one of the richest oligarchs in Russia, and Alexander Medvedev, deputy chairman of Russian energy giant Gazprom, which had the standoff with the Ukraine over gas supply, Jack Ma, the boss of Alibaba Group, the world's largest online business-to-business marketplace, and Anthony Nightingale, managing director of Hong Kong's largest private employer Jardine Matheson.
- NZPA
