The role of the Asia-Pacific Economic Cooperation forum can be expanded to deal with social and economic matters stemming from financial crises in Asia, Leonard Edwards, Canada's new ambassador to Japan, said Tuesday.

"I believe that APEC can and should be used by its members to come to grips with some of the social and economic aspects of the current difficulty, and assist governments to come to grips with social dislocation" such as unemployment and labor movements, Edwards Edwards told a press conference at the Foreign Correspondents' Club of Japan.

Although the current agenda for APEC is trade and investment liberalization and facilitation, the new ambassador said that whatever happens in the financial sector impacts other sectors, such as trade, as well as society. "These things have to be dealt with in a comprehensive way," Edwards said.

Edwards was a member of the Canadian Foreign Ministry's APEC and Group of Seven Summit teams before taking the ambassadorial post in Tokyo. Solving the problems of social dislocation will help "not only to avoid political fallout and risks of instability, but also to establish stronger and more broadly based economies for the long term," Edwards said.

The ambassador warned of a rise in protectionist sentiment, which often arises in some countries, especially in periods of economic difficulty. Protectionist policies are often instinctive reactions made when turbulence threatens the normal flow of trade and investment, according to Edwards. "From the perspective of trade policy, making the right decisions in this period of turbulence will be critical for supporting whatever financial measures are deemed necessary to restore stability," he said.

Wrong decisions, however, will damage international trade and dampen financial recovery, he added. On relations with Japan, Edwards said Canada's trade with Japan is relatively balanced and that Canada takes its trading relationship with Japan very seriously.

However, Canada has trade access issues with Japan that he says demand further deregulation. "We see deregulation not only as being to the benefit of Japanese consumers, but also as being necessary for rejuvenating the Japanese economy and providing the open markets that can serve as an economic locomotive for the region's trading nations," he said.