Daily Lessons from Life 14 November 2010 0 APEC leaders pledge to turn free-trade dreams into reality

Channel NewsAsia: "APEC leaders pledge to turn free-trade dreams into reality - 14 November 2010

YOKOHAMA, Japan : Pacific Rim leaders, including the US and China, on Sunday pledged to turn their dreams of a vast free-trade zone into reality, setting aside conflicts that marred the G20 summit in Seoul.

The 21-member Asia Pacific Economic Cooperation (APEC) group vowed to resist the forces of protectionism as the world recovers from a painful downturn, and maintain the region's role as a key growth engine.

'We remain committed to maintaining open markets and fighting protectionism. We reaffirm our common resolve to support the recovery in a collaborative and coordinated way,' they said in a statement.

Echoing the language of the Group of 20 summit on Friday, they pledged to refrain from competitive currency devaluations and emphasised the need to establish more balanced and sustainable growth."

The ideal is logical. The countries that are most efficient and effective in producing certain type of goods or services or solutions should be the ones producing that same for ALL other countries to use and consume. The trouble is: over time, every country wants to be like the 'industrialised or developed' countries or the countries that supplied to these 'consumption-centered' countries! e.g. Singapore, Malaysia, Thailand looking to attract and developed certain industries that South Korea, Hong Kong, and Taiwan believed are essential for their development too. This does not even take into account countries in the South America and Africa or the new Europe. So, the ideal of free trade is not going to happen as citizens of each country cannot be easily moved to another country with a snap of the finger!

Lessons for me are:

1. grow in qualitative term if we must pursue growth. Low wages, low cost, low prices, low profit (but no losses) is the way to go;

2. the high consumption countries like USA and UK etc should STOP thinking about growth at this time except growth that reduce unemployment. This can only be done with low wages, low costs, low prices, and low profit!;

3. unfortunately, the actions by the brightest economists and financial advisers of the 'powerful' countries are still trying to promote consumption with loose money. It is understandable that they wanted to 'revitalize' or keep the momentum of the growth of their economies but the money created ended up, supposedly, around the globe by the smart financial types to create inflation and assets inflation! The money did not stay in the USA! Perplexing.

Free trade is a dream. A good dream to pursue. It will NOT be a reality as long as the 'smart' people continued to hold on to an out-dated theories! Plus, national interests driven by the citizens of each country involved!