WASHINGTON – U.S. President Barack Obama Tuesday urged Japan and China to spur domestic demand to help engineer a global economic recovery.
Obama and Aso also agreed in their meeting at the White House to fight protectionism and help maintain confidence in the dollar as a key global currency, Japanese officials said.
Obama’s call comes as the world economy is in its worst tailspin in decades due to fallout from the U.S. subprime mortgage meltdown.
During the meeting, Obama told Aso that the United States is trying hard to repair the ailing economy and wants countries around the globe, particularly economic powers like Japan and China, to do their part to help achieve a global recovery, the officials said.
Aso briefed Obama on the measures Tokyo has taken to support the Japanese economy, which contracted an annualized real 12.7 percent in the October-December quarter, the fastest pace in about 35 years, they said, adding Obama made no mention of specific stimulus measures Japan has to take.
Finance Minister Kaoru Yosano has indicated he supports formulating a new economic stimulus package once the state budget for fiscal 2009, totaling a record ¥88.5 trillion, is enacted.
Aimed at sending a message of close cooperation between the world’s two largest economies, Obama and Aso agreed to coordinate measures and work together to prepare for the Group of 20 financial summit in London on April 2.
Aso and Obama stood firm against protectionism, which appears to be creeping up as some countries move to shield their domestic industries from the detrimental impact of the global recession, the officials said.
No reference was made to the “Buy American” provision of a recently enacted $787 billion U.S. stimulus plan, which requires the use of U.S.-made steel and goods for public infrastructure projects.
Washington has said it has no intention of violating or acting inconsistently with any of its World Trade Organization obligations. Despite this, many countries view the provision as protectionist because some countries fall outside the WTO government procurement rules.
Aso was quoted as pointing to the need to bring the stalemated Doha Round of multilateral trade liberalization negotiations under the WTO to a successful conclusion.
Obama and Aso also agreed it is essential to maintain confidence in the dollar’s position as a key global currency, but fell short of discussing how to do so, the officials said.
On other topics, Aso proposed creating a new bilateral dialogue framework to discuss economic issues, which would replace the sub-Cabinet-level bilateral economic forum that existed during the administration of President George W. Bush, the officials said.
The two leaders agreed that both sides will study the proposal, they said.
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