Bridges Weekly Trade News Digest • Volume 13 • Number 27 • 22nd July 2009
APEC Trade Ministers Condemn Protectionism
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Asia-Pacific trade ministers vowed this week to resist protectionist policies, even those that may not violate world trade rules, and to conclude the WTO’s Doha Round of trade talks in 2010.
The biggest gathering of trade ministers so far this year, the meeting, held on 21 and 22 July in Singapore, brought together officials from countries around the Pacific Rim, ranging from Thailand, Chile and Papua New Guinea to Australia, China and the United States. WTO Director-General Pascal Lamy also attended the summit.
Echoing calls from recent summits of the G20 and the G8, the APEC trade ministers - whose countries account for nearly half of both the global population and world commerce - vowed to keep trade lines open as their countries continue to struggle through the global economic slump.
“We acknowledge that there are growing protectionist pressures worldwide…We are very conscious that if protectionism is not controlled, this could be a severe setback to our growth prospects,” said Singaporean Trade Minister Lim Hng Kiang, who chaired the meeting, according to a report from Agence-France Presse.
“It will invite tit-for-tat retaliation and all the gains of trade liberalisation over the last few years could be unravelled,” Lim added. “In this spirit, we will avoid implementing any measures that have protectionist effects even if they are compatible with WTO rules.”
The ministers also agreed to push for a conclusion of the Doha talks next year. Securing a global deal to cut tariffs and subsidies would be “the most effective way” to guard against protectionism, the ministers said in a joint statement, Xinhua reported.
‘Buy local’ provisions that were written into many rich-country stimulus packages attracted criticism from the ministers.
“We are saying ‘please don’t impose any more protectionist measures’, as they have been hurting our exports,” Thai Commerce Minister Pornthiva Nakasai told journalists on Tuesday, Reuters reported.
But United States Trade Representative Ron Kirk, whose country’s ‘Buy American’ policies have come under fire recently (see related story, this issue), defended the domestic-sourcing measures, saying that they were in line with the commitment to resist protectionism that US President Barack Obama made at the G20 summit in April (see Bridges Weekly, 8 April 2009, http://ictsd.net/i/news/bridgesweekly/44813/).
Other trade-related issues were also on the ministers’ agenda. A survey issued in conjunction with the summit concluded that trade finance - the loans and other forms of credit that oil the wheels of global commerce - is “an area of concern for most APEC economies.”
Many countries rely on trade finance to ship their goods overseas. But with many banks hesitant to lend out cash, such loans have become hard to come by and some nations have struggled to get their products to market.
“The most commonly cited reasons for tightness in trade financing were increased risk aversion of financial institutions towards companies, higher perceived counterparty risks, and general liquidity shortage in the economy,” the report concluded.
ICTSD reporting;”Protectionism issue to rule APEC meeting,” THE JAKARTA POST, 21 July 2009; “APEC decries protectionism, commits to Doha by 2010,” REUTERS, 21 July 2009; “APEC trade ministers warn against protectionism,” AGENCE-FRANCE PRESSE, 22 July 2009; “Completing Doha Round talks most effective to resist protectionism: APEC trade ministers,” XINHUA, 22 July 2009.
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