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Chile's President Sebastian Pinera, China's President Xi Jinping, Papua New Guinea's Prime Minister Peter O'Neill, Japan's Prime Minister Shinzo Abe and US Vice President Mike Pence wave with (back row L to R) Peru's Foreign Minister Nestor Popolizio, Philippine President Rodrigo Duterte, Russia's Prime Minister Dmitry Medvedev, Singapore's Prime Minister Lee Hsien Loong, South Korea's President Moon Jae-in and Thailand's Prime Minister Prayut Chan-O-Cha as they pose for a "family photo" during the Asia-Pacific Economic Cooperation (APEC) Summit in Port Moresby on November 18, 2018.
SAEED KHAN, AFP/Getty Images

World leaders meeting for Asia-Pacific trade talks in Papua New Guinea wrapped up a divisive, two-day summit Sunday after failing to agree on a group statement amid a widening rift in U.S.-China relations.

Papua New Guinea Prime Minister Peter O’Neill said he will release a "chairman's statement" in the next few days on behalf of the 21-nation gathering. O'Neill acknowledged that "the entire world is worried" about tensions between the two superpowers.

The struggle to find common ground did not bode well for a crucial meeting between President Donald Trump and Chinese President Xi Jinping scheduled for the G-20 meeting in Argentina at month's end. 

Trump was conspicuously absent from the Asia gathering, sending Vice President Mike Pence in his stead. Pence and Xi swapped barbs, setting a contentious tone for trade talks involving 60 percent of the world economy.  

O'Neill said the talks broke down over language about the World Trade Organization. The U.S. has adamantly opposed the way WTO treats China as a market-driven economy rather than one dominated by state-supported industries.

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The same, sharp differences that have crippled trade between the two nations also made working out common language for a communique impossible, O'Neill concluded.

"There were two big giants in the room, what can I say," O'Neill said.

In his speech to the group, Xi urged the business and political leaders to promote free trade.

"The world today is going through major development, transformation and change," Xi told the group. "While economic globalization surges forward, global growth is shadowed by protectionism and unilateralism."

Pence pitched that the United States offered nations in the region a better option for economic partnership and criticized Chinese “authoritarianism and aggression.” He said the U.S. seeks "collaboration and not control" and blasted a Chinese road-building program as forcing debt on poorer neighbors.

“We don't drown our partners in a sea of debt, we don't coerce or compromise your independence," Pence said. "The United States deals openly and fairly. We do not offer a constricting belt or a one-way road.”

China’s foreign ministry denied leading developing nations into debt bondage.

“The assistance provided by China has been warmly welcomed by our partners in this region and beyond,” responded Wang Xiaolong, a foreign ministry official.

After the summit, Pence tweeted that "The United States’ commitment to the Indo-Pacific has never been stronger – and while we will always advance our interests, we will also respect your own."

The Trump administration has slapped tariffs on $250 billion in Chinese goods. The administration also has warned that duties on another $267 billion in goods could be coming, which would subject to tariff virtually all Chinese-made products shipped into the U.S.

China retaliated by levying tariffs on $110 billion worth of a wide variety of U.S. products, including farm equipment, soybeans, electric cars, orange juice, whiskey, salmon and cigars.

"The entire world is worried about the debate about trade relations between China and, of course, the United States," O'Neill said. "This is a situation that both countries need to sit down and resolve. And I believe that the G20 meeting that is going to be held very shortly will be an opportune time."

Contributing: Thomas Maresca; The Associated Press