PHUKET, Thailand, 6 September 2003 — Finance ministers from 21 Asia Pacific economies refused to bow to US pressure yesterday to forge a common front on supporting flexible exchange rate regimes as they were told by the United States that they needed to boost growth and trade liberalization.

A joint statement released at the conclusion of a two-day economic powwow of the Asia-Pacific Economic Cooperation forum stressed the importance of regional structural reform rather than pinning down members to commitments on the “flexible” exchange rate management sought by Washington.

“We emphasized the importance of accelerating structural reform, adopting macroeconomic policies that promote sustainable growth, supported by appropriate exchange rate policies that facilitate orderly and balanced external adjustment,” the APEC ministers said in a statement.

At the same time, the ministers acknowledged the point made on the need for currency flexibility. “While recognizing that there is no single exchange rate regime that suits all economies at all time, we noted a view expressed at the meeting that more flexible exchange rate management, in some cases, would promote this objective.”

US Treasury Secretary John Snow said he was “encouraged” by the outcome despite the statement serving as a reminder that APEC had not forged a consensus on the issue. “Let me say I’m encouraged. It’s the US view that the best regime is a market-based currency regime, where demand and supply are allowed to play the predominant role, where interventions are kept to a minimum,” he told reporters.

“The statement is an important step in the right direction, recognizing as it does the role (that) greater flexibility can contribute to a more orderly set of adjustments in the economies in question and can help relieve pressures that create imbalances that can be troubling.”

Chinese Vice Finance Minister Lou Jiwei, whose government has been under fire from Washington and Tokyo to agree to revalue its currency, the yuan, said he was “very satisfied with the joint ministerial statement”. “There are correct views (in the statement) with regard to the exchange rate regime,” he said. “There is no single exchange rate regime which will suit all at all times.”

Delegates told AFP that Washington had failed to sway the ministers with its argument that it was time for all countries in the region to adhere to more market-driven exchange rate policies. “There is no consensus and it’s wrong to imply that there is. Obviously there are some differences of views on the exchange rate matter,” said one delegate who asked not to be named.

Snow arrived here after two days of talks in Beijing, where the authorities had refused to budge on their currency peg position. The ministers focused much of their Phuket discussion on expanding regional economic cooperation, boosting small- and medium-sized enterprises and clamping down on terrorism-related financial networks, Thai Finance Minister Suchart Jaovisidha said.

The aim of the meeting was “fostering linkages and closer economic ties in the Asia-Pacific region,” he told a closing press conference. Snow said that despite some rosy growth forecasts in APEC, Asia and especially Japan, must do more to boost growth, along with Europe. “I reported that the US economy is returning to higher levels of growth but that the global economy requires Europe and Asia — and Japan in particular - to attain higher levels of growth as well.”

APEC economies showed strong growth of 3.8 percent in 2002 compared with 2.4 percent in 2001 and expect an even stronger showing in the second half of 2003 despite a weak international environment brought on by the SARS crisis and the war in Iraq in the first six months.

Japanese business leaders, meanwhile, stepped up pressure on China to ease its currency peg and introduce global business standards, including the protection of intellectual property rights. The Japan Business Federation (Nippon Keidanren), the nation’s most powerful business lobby, made the requests when its members had a lunch meeting with Wu Bangguo, chairman of China’s Parliament, now on a weeklong visit to Japan.

“We would like your country to take appropriate steps for (achieving) proper foreign exchange rates” reflecting the strength of the Chinese economy, the federation’s chairman Hiroshi Okuda said in his speech. Okuda, who is also chairman of Toyota Motor, called on Beijing to adjust local business regulations in line with international rules based on agreements under the World Trade Organization.