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A Goal for G20 is to fight protectionism
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08:53, March 26, 2009

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By Li Hong, People's Daily Online

The unfathomable global economic downturn since World War II is no excuse for erecting trade barriers to counter shipments from others' shores. On the contrary, major economies in the world need to invigorate free trade so as to defeat the recession beast at an earlier date.

Stakes and expectations are high as the leaders of the globe's 20 largest economies meet in London on April 2. The battered businesses and millions of laid-off workers and their families who are struggling to make ends meet now, keep hoping for tangible results from the summit. People are longing for beefed-up stimulus fiscal spending by the participating governments, which will surely bring windfalls of precious jobs.

Among the slew of key topics on the roundtable in London, one of them facing the leaders will be their collective mandate and resolve to fight protectionism, which is on the march lately provoking some nasty trade disputes among nations. It is known to you and me, and to them too, that trade protectionism is not the answer to the global crisis. It will nevertheless exacerbate it.

As the recession's grip tightens, pressures to set up barriers against importing goods produced on other lands are likely to intensify. It is known to all that trade protectionism will not only hurt everyone but also postpone the recovery of the world economy as a whole.

But the appeal that self-protecting measures might fortify a country's economy against outside assault has often allured some countries to talk one way and act the other in the combat against protectionism. Many countries have quietly chosen to levy higher tariffs on goods made beyond their borders.

At the last such top-caliber gathering in Washington in November, the Group of 20 members agreed to commit to protecting free trade. However, it turned out to be that no sooner was the G-20 statement issued than it was breached.

The World Bank, in a report on Tuesday, said that since the Washington meeting, 17 members of the Group of 20 had adopted 47 measures aimed at restricting trade, which is very worrisome.

For an example, India announced a six-month ban on toy imports from China in January, for which Beijing has made clear that it would file a complaint at the World Trade Organization. Another example of that policy is the "Buy America" provision in the American stimulus package, which was intended to ensure that only American manufacturers will benefit from American public-spending projects.

Trade pundits have warned that 2009 could be a "very bad year" for imports and exports, because world leaders are facing increasingly louder calls for government protection measures from economically battered home constituents.

If all major economies can engage themselves in expanding trade opportunities, protectionists will find much less room to advance their claim. And, if the international community really cares about avoiding a repetition of the terrible mistake of the 1930s, every country should explicitly reject protectionism.

The unrelentingly churning financial tsunami calls for collective action from the G20 and all other big and small economies. Barriers against others' goods won't tame ferocious waves at all, and, when the barrier finally breaks down, the harm to a closed economy will be more catastrophic.

The article represents the author's view only. It does not represent opinions of People's Daily or People's Daily Online.



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