APEC leaders wade into trade and North Korea

HANOI, Nov 19 (Reuters) Asia-Pacific leaders are expected to promise progress on freeing up global trade as they end a summit in the Vietnamese capital today that has been dominated by diplomacy over North Korea.

The 21 leaders of the Asia Pacific Economic Cooperation forum will don traditional Vietnamese ao dai tunics for the annual family photo that is meant to show their solidarity.

After that, APEC chairman Vietnam will issue a ''Leaders Declaration'' that will show they reached agreement on a variety of issues, ranging from climate change and customs procedures to economic security threats and free trade.

But none of the agreements are legally binding in a group that prides itself on operating by consensus. And behind the warmth and smiles questions have risen over the group's direction and relevance.

''Its assumption of some security role following the September. 11 attacks in the United States has compromised its original purpose and blurred its focus,'' Malaysian Prime Minister Abdullah Badawi told business executives at a parallel ''CEO summit'' yesterday.

Leaders needed to ''make the APEC agenda more relevant to the needs and aspirations of all member economies and not just a few,'' Abdullah said.

FARM SUBSIDIES The leaders of APEC, which accounts for nearly half of global trade, pledged to make compromises on farm subsidies and industrial tariffs in an ''urgent effort'' to jumpstart the Doha Round of global trade talks.

''Each of us is committed to moving beyond our current positions,'' they said in a statement at the start of the summit that is being attended by US President George W Bush, and the leaders of other key trading nations including Japan, China, Russia and Australia.

But it was North Korea that dominated a swirl of meetings on the sidelines as Bush tried to line up a united response to the North's nuclear ambitions.

White House national security adviser Stephen Hadley said APEC leaders had largely agreed on a statement to be issued today that is meant to ratchet up the pressure on North Korea.

It was not clear if it would be a written or an oral statement; part of the Leaders' Declaration or a separate statement.

All the countries involved in six-party talks to end North Korea's nuclear programmes are in Hanoi except for the North itself, and the five leaders spent much of the day in meetings on what should be expected out of the next round.

No date has been set for the next round.

The need for talks, stalled since last year, became all the more pressing after North Korea conducted a nuclear test on October.

9, drawing UN sanctions. North Korea has since agreed to return but no date has been set.

The week-long APEC extravaganza, which has attracted 10,000 officials, businessmen and journalists to Vietnam's new 270 million dollar convention centre, is also an opportunity for informal diplomacy.

Bush and Japanese Prime Minister Shinzo Abe talked baseball yesterday and Abe gave Bush a photograph of their two grandfathers playing golf with Dwight Eisenhower.

REUTERS DKS PM0448