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APEC: Will free trade see the light of day?

Analysis: Low expectations for APEC, but summit allows leaders to address bilateral disputes.

Yet as the G20 neared its conclusion on Friday, reports from Seoul indicated significant differences of opinion had delayed agreement on the leaders’ joint statement. The sticking point: China and the United States’ failure to address accusations that the other is devaluing its currency, in moves that some have warned could be opening salvoes in a global trade war, with protectionism the weapon of choice.

There was cause for muted celebration, then, that in their “Seoul Action Plan,” the G20 leaders eventually agreed to avoid “competitive devaluation" and instead “strengthen multilateral cooperation to promote external sustainability and pursue the full range of policies conducive to reducing excessive imbalances and maintaining current account imbalances at sustainable levels."

In other words, no escalation in the currency wars … for now.

Yet U.S. unease about China’s refusal to let the yuan rise is certain to continue. As Gary Locke, the U.S. secretary of commerce, said in a speech in Tokyo this week: "U.S. businesses still have concerns about policies that inhibit their ability to compete in Asia-Pacific. They want to ensure that their access to raw materials and exposure to currency risk is dictated by market, and not political forces."

If expectations are low for APEC, the summit will at least offer leaders another chance to address pressing bilateral disputes. A quick resolution to the U.S.-China currency row looks unlikely, but there is the potential for Japan’s leader, Naoto Kan, to begin repairing the damage that territorial disputes have inflicted on his country’s relations with China and Russia.

No firm plans have been made for Kan to meet his Chinese counterpart, Hu Jintao — weeks after the east Asian rivals fell out over a collision near disputed islands — but he is expected to meet the Russian president, Dmitry Medvedev, who raised Japanese hackles with a recent visit to another group of contested islands in Japan’s far north.

It isn’t often that an APEC summit gets the political juices flowing in the United States, but pressure is mounting on Obama, fresh from a battering in the midterm elections, to take a stand on behalf of anxious U.S. exporters. He could do worse than evoke the spirit of Commodore Perry … minus the firepower.