The G-20 Response To The Global Economic Crisis-Part V

This is the fifth in a series of articles on the outcome of the G-20 Meeting held in London, on the 2nd of April to deliberate on the effects of the global economic crisis, and the appropriate response to it.

Promoting Global Trade and Investments and Rejecting Protectionism:

The G-20 expressed its concern at the declining trend in international trade and investments, that is bound to have serious repercussions for the world at large.   This fall in international trade and investment, accompanied with increasing protectionist sentiment, including in the United States, where the “Buy American” slogan is gaining currency.   Coupled with this, the falling demand for goods and services is only making things worse.  

The G-20 resolved to give a filip to world trade and investment, to ensure that global growth is on track once again.   One important admission on part of the G-20 was the mistakes committed by them in the past, and the resolve not to repeat them.

In order to achieve the objective of defeating protectionism, and promoting world trade and investment, the G-20 resolved to take all the necessary steps like:

1. Refraining from putting up new barriers to trade in goods and services, and investment, to ensure free movement of the same.
2. Not to place any new restrictions on exports.
3. Not to go against the WTO recommended measures in relation to exports promotion.
4. Further, to rectify any such mistakes made in the past.
5. To streamline domestic economic policies in such a way as to reduce their negative impact on international trade and investments.   To avoid falling back on negative measures like protectionist policies which would only beget similar response from the other countries.
6. To ensure flow of capital, especially to developing countries, and rejecting measures that might stem the free flow of capital worldwide.   Ensuring free movement of capital between countries is a priority for the G-20 now.
7. To give the WTO a greater role to play in monitoring and reporting the adherence, or lack of it, of countries to their committment for a free and fair world trade and investment regime.  
8. To involve other international bodies concerned with international trade, investment, and development in this process.   To promote more transparency and accountability in dealing with economic issues including trade and investment.
9. To take all possible steps to stimulate and boost trade and investment, throughout the world ,which alone can keep the wheels of economic development running.
10. To provide new funding in the order of USD 250.00 billion to promote trade finance through agencies engaged in promoting export credit and investment, and also through the MDBs(Multilateral Development Banks).
11. To empower regulatory agencies in member countries to use their discretion in providing capital requirements for trade finance.
12. The Doha Development Round concerned with lowering trade barriers around the world to give a filip to global trade to be speeded up.   Presently the talks are stalled on account of differences between members on the issue of agriculture, industrial tarrifs, non tarrif barriers, services and trade remedies.
13. In general, the G-20 would do everything in its power to boost world trade and investment.   Through practical actions like allocation of funds.   Through proper monitoring and reporting of these activities, throughout the world.   And through prompt measures to rectify any mistakes made along the way.
14. The G-20 resolved to pay adequate attention to the above issues, not only through various economic fora, but also garner the necessary political will to push legislation in member countries that was consistent with the goals set forth at the 2nd April meeting.

Protectionist tendencies are already visible in various countries, including the United States, that threatens to dampen the political will necessary to stimulate growth and development.   Of special concern is the rising demand to keep exports going, but cutting down on imports-to ensure the survival of local industry.   This, in turn, has a domino effect, with other countries following suit, thereby making a mockery of the very concept of free trade.

The G-20 resolved to seriously address all these issues, and to come up with a credible and transparent response to it.

                                                                                              To be concluded