Lima  - Canadian Prime Minister Stephen Harper made a staunch, unqualified defence of free trace Saturday in Lima, as he adressed business leaders ahead of the annual Leaders' Meeting of the Asia-Pacific Economic Cooperation (APEC) forum.

"Now is a time to open doors, not to erect walls," Harper said.

Although he acknowledged that the current setting is marked by a "colossal crisis," he called upon world leaders to "improve regulation, not necessarily increase regulation." He also stressed that governments should engage in "commercial operations in the financial sector," but stop short of subsidizing those activities.

According to Harper, the world needs "better regulation of financial institutions, not financial institutions that are run by the government."

In the same context, he called upon leaders to have a broad perspective. Notwithstanding what he defined as "current difficulties," the world should not forget that recent decades have seen an "unprecedented" rise in prosperity.

"We cannot allow ourselves to turn back," Harper said.

On the same platform, US President George W Bush stressed minutes earlier that "government intervention is essential," although he said nations should avoid protectionism and "the temptation to overcorrect" market functions.

Harper underlined the need for "sound foundations and open doors."

In this context, he called upon the world to approach the crisis with long-term thinking, so that the budgetary deficits that may now be necessary do not become structural and so that avoiding deflation in the immediate future does not pave the way for inflation when the economy recovers from the slump. (dpa)