G20 agree to cooperate in reducing trade imbalances, shun protectionism

17:19, November 12, 2010      

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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 reaffirms commitment to free trade and investment recognizing its central importance for global recovery.

"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," said the communique.

The G20 members said they 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.



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