Filing tonight from The Prince Hotel in Lima Peru:

Prime Minister Stephen Harper, speaking here on the eve of the APEC leaders' summit, said markets "remain in a state of fear" and vowed to take "unprecedented fiscal actions if they are necessary" to stimulate economic growth and ease tightened credit conditions.

Harper was to have a one-on-one meeting with U.S. President George Bush on Saturday morning before giving a speech to CEOs and leaders from the 20 countries that make up the Asia Pacific Economic Cooperation (APEC) forum. He will also have a private meeting with the president of South Korea on Saturday.

Both South Korea and Canada have been trying for nearly a decade to forge a new trade agreement.

Following the G20 leaders summit last weekend in Washington, stock markets in Canada and around the world suffered one of their worst weeks ever.

"The markets remain in a state of fear," Harper said at a news conference here after he and Colombian President Alvaro Uribe signed a free trade deal between the two countries. "Those fears aren't always rational, but they're very real."

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