G20 agree to cooperate in reducing trade imbalances, shun protectionism
The G20 members said they would enhance cooperation to promote external sustainability and pursue policies conducive to reducing trade imbalances and maintaining imbalances at sustainable level, said the joint communique issued Friday afternoon at the end of the Seoul Summit.
The G20 countries agreed to develop indicative guidelines composed of a range of indicators, which would serve as a mechanism to facilitate identification of large imbalances that required preventive and corrective actions, it said.
The communique said the Framework Working Group, under the G20 leadership, would be responsible for developing these indicative guidelines, with progress to be discussed by G20 finance ministers and central bank governors in the first half of 2011.
The G20 also agreed to implement "structural reforms" to contribute to global rebalancing.
Structural reforms would be conducted to reduce the reliance on external demand and focus on domestic sources of growth in surplus countries, while deficit countries would reform to promote higher national savings and enhance export competitiveness, it said.
In the meantime, the G20 affirmed commitment to free trade and investment recognizing its central importance for global recovery, and "unwavering commitment to resist protectionism in all forms".
"We are committed to keeping markets open and liberating trade and investment as a means to promote economic progress for all and narrow the development gap," the G20 said.
"We will refrain from introducing, and oppose protectionist trade actions in all forms and recognize the importance of a prompt conclusion of the Doha negotiations."
The G20 said in the communique that the year 2011 was a critical window of opportunity, though narrow, and the world need to complete the end game.
Members of the World Trade Organizations started the Doha Round of global trade talks in 2001, with a mandate to help poor countries prosper through more trade, but the negotiations have long been stalled because of sharp differences among major members over agricultural trade and industrial market access. Deadlines previously set for conclusion of the round had been repeatedly missed.
The G20 also said its members would also avoid financial protectionism and were mindful of the risks of proliferation of measures that would damage investment and harm global recovery, according to it.
The two-day G20 Seoul Summit, which had brought together leaders of world's major countries, including the U.S., China, Russia, France, Britain, Brazil and Germany, was held amid increasing worries over trade disputes and protectionism.
On Thursday, British Prime Minister David Cameron issued a stern warning on increasing protectionism globally and called on the G20 members to keep the world trade open.
"The fear we should all have is a return to what happened in the 1930s -- protectionism, trade barriers, currency wars, countries pursuing beggar my neighbor policies -- trying to do well for themselves but not caring about the rest of the world," Cameron told corporate leaders at the G20 Business Summit.
Collectively, the G-20 economies comprise 85 percent of global gross national product and 80 percent of world trade, including EU intra-trade.
Leaders of the world's major developed and developing countries as well as international institutions wrapped up the two-day G20 Seoul Summit on Friday afternoon with the joint communique.
Attending the Seoul Summit were leaders from the G20 member countries, the European Union, the IMF, the World Bank, the UN, the World Trade Organization, the OECD, the African Union, the ASEAN, and the International Labor Organization, as well as from five non-G20 countries -- Ethiopia, Malawi, Singapore, Spain, Vietnam.
[Source: Xinhua, Seoul, 12Nov10]
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