Chinese Goods Arrive in Port of Los Angeles (Photo Mary Slosson)

The free trade zone would encompass over half of the world's economic activity, making the reduced tariffs and easing of trade a hugely significant move.  Close to 40 percent of the world's population lives in the area to be included in the zone, which is expected to be implemented by 2020.

The announcement by APEC comes at the end of American President Obama's 10-day Asian tour, which failed to ease economic tension between the U.S. and China over the artificially suppressed value of the Chinese currency, the yuan.

President Obama has been encouraging China, the world's second-largest economy behind the United States, to allow their currency value to rise in order to bring the currency exchange rate between the two countries closer together.  Such a revaluation would potentially allow the United States to close the huge trade deficit it runs with China.

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