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Pacific Rim leaders mull ways to buoy growth

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VLADIVOSTOK, Russia — Asia-Pacific leaders discussed ways to energize growth by opening markets wider to trade on Saturday, in talks overshadowed by longstanding territorial disputes.

Revitalizing growth is an urgent priority for the Asia Pacific Economic Cooperation forum, whose aim is to dismantle barriers and bottlenecks that slow trade and business while nurturing closer economic ties.

Both China and host Russia pledged to do what they can to support those aims at a time when the global recovery is appears to be faltering. As usual at the consensus-led APEC summit, where most of the action was in various bilateral talks on the sidelines of the forum, leaders agreed to push ahead with long-term strategies to support sustainable growth.

Russian President Vladimir Putin and his South Korean counterpart Lee Myung-bak agreed to collaborate on resolving the standoff over North Korea's nuclear program, a key obstacle for developing a gas pipeline and rail links those two countries would like to build from Russia to Korea's Pacific coast, South Korea's presidential office said in a statement.

"Russia is ready to actively push forward with three-party collaboration for railroads, gas pipelines and power cables," the statement quoted Putin as telling Lee. He also said Russia could increase fishing quotas in exchange for more investment in its far eastern region.

Moscow aims to build the region around Vladivostok, a long-neglected seaport, into a hub that would tap into Asia's dynamic growth.

Asia remains the brightest spot in the global economy but is facing challenges, and trade is the solution, Putin told fellow leaders as they began their annual "informal retreat."

"The recovery of the global economy is faltering. We can only overcome negative trends by enhancing the volume of trade ... enhancing the flow of capital. It is important to follow the fundamental principles of open markets and free trade," Putin said.

"The priority goal is to fight protectionism in all its forms," Putin said. "It is important to build bridges not walls."

With President Barack Obama absent from the APEC summit this election season — Secretary of State Hillary Rodham Clinton is attending in his place — the Russian leader has showcased his country's aspirations to play a more active role in the Pacific Rim region.

Clinton welcomed Russia's recent admittance to the World Trade Organization. America's exports to Russia could double or even triple as the country implements its commitments to open its markets further, while Russia itself could raise its GDP by about 11 percent in the long run, she said, citing World Bank estimates.

"Fostering a balanced and stable economy is a challenge too sweeping and complex for countries to approach in isolation," Clinton said. "If we do this right, globalization can become a race to the top, with rising standards of living and more broadly shared prosperity."

Australian Prime Minister Julia Gillard, whose father died Saturday while she was in Vladivostok for the APEC summit, missed the talks as she was preparing to return home.

Putin announced the news in explaining Gillard's absence as he convened the group's first session.

"A sad event has occurred in the family of one of our colleagues, the prime minister of Australia. Her father has passed away," Putin said as the leaders gathered around a large round table. "Therefore I allow myself to express condolences from all of us."

Russia's hosting of the APEC summit highlights a renewed focus on developing its neglected but resource-rich Far East, where it plans to develop modern railroads, seaports and airports to help build a bridge between Asia and Europe.

Earlier, Putin promised regional business leaders that they can count on Russia, which has long focused mainly on supplying oil and gas to Europe, to be a reliable energy supplier.

APEC can play a role, business leaders attending the conference said, in forging regional networks, especially in energy and transport.

But lingering territorial disputes and other legacies of the Cold War era are keeping the region from its full potential: North Korea, in particular, remains relatively isolated from the rest of Asia, its own infrastructure in shambles.

Officials attending the talks insisted that the APEC agenda of economic and trade issues had no room for discussion of recent flare-ups in territorial disputes among Japan and South Korea, China and various neighbors, and Russia and Japan.

But hard feelings were nonetheless apparent: untypically, Japanese Prime Minister Yoshihiko Noda had no plans to meet with Chinese President Hu Jintao or with South Korea's Lee, Japanese and Chinese officials said.

Recent animosity has been harsh enough that Japan's Kyodo News agency reported the news that Noda and Lee shook hands when they sat beside each other at the leaders' meeting.

While briefing reporters, both the Chinese and Japanese officials reiterated their own claims regarding disputed islands.

"The Japanese side should face squarely to the strong reserve and determination of the Chinese government and the people to safeguard national sovereignty and territorial integrity," Chinese spokesman Qin Gang said.

He urged the Japanese to "meet the Chinese side halfway."

Japan and Russia, meanwhile, appeared to be making at least some headway on their own tussle over islands north of Japan claimed by both sides. Deputy ministers are to meet later this fall to discuss the issue with the aim of eventually signing a peace treaty, officials said.

The two sides agreed to ban crab poaching in the Sea of Okhotsk and signed an agreement on building a timber processing factory in Siberia. Meanwhile, Noda and Putin agreed to arrange a visit by the Japanese leader to Russia by December, said a senior Japanese official who briefed journalists about the talks.

The two sides want to resolve their differences in a "quiet and constructive atmosphere," the official cited Noda as saying.

Given APEC's lack of negotiating power, its annual summit is not known for major policy breakthroughs, though its activities affect trade and business accounting for about half of world economic activity.

During their meetings, the APEC leaders are expected to approve various initiatives, including one that will cut tariffs on environmental-related goods — such as waste-water treatment technologies — to 5 percent by 2015.

They also are expected to endorse measures for ensuring food security, protecting supply chains and beefing up emergency preparedness.

Associated Press writer Lynn Berry contributed to this report.