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Cut the protectionism: tycoons urge G20 leaders

(Xinhua)
Updated: 2010-11-11 13:50

SEOUL - Chairmen and CEOs of major multinationals called on G20 summit to revitalize world trade and facilitate foreign investment on Thursday, as G20 leaders were gathering in the South Korean capital Seoul for a key summit.

Nearly 30 chairmen and CEOs of major multinationals, such as Barclays Capital, Hyundai Motor, A.P. Moller-Maersk Group and J.P. Morgan, joined in the Trade & Investment roundtable session, one of the four sessions of the Business Summit.

The Business Summit was the prelude to the G20 Seoul Summit, which would gather leaders of world's major economies, including the US, China, Japan, Russia, France, Britain, Brazil and Germany. The Seoul summit would start later on Thursday.

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Collectively, the G20 economies comprise 85 percent of global gross national product and 80 percent of world trade, including EU intra-trade.

Hong Kong-based Li & Fung Group Chairman Victor Fung, which convened the roundtable session, said that trade was the lifeblood of the global economy and the world needed more of it at this critical moment, not less.

It was imperative for G20 countries to curb rising trade protectionism and make efforts to reduce current protectionism practices to pre-crisis level, he said.

"We must ensure that trade volumes continue to grow by creating additional opportunities through trade liberalization, while nurturing a supportive environment for trade finance, and improving the governance of trade," he told reporters earlier.

"We are calling on G20 leaders to personally engage in completing the Doha Round of multilateral trade negotiations and to resist protectionism and trade-restrictive practices that impede the flow of goods and services," he said.

According to working report, produced by Fung and some 120 other corporate leaders at the Business Summit, the World Trade Organization (WTO) recently raised its forecast for trade growth in 2010 to 13.5 percent, based on strong demand for goods and services, particularly from developing countries.

Following a drop of 12 percent in trade volumes in 2009, this was encouraging and could support the global economic recovery.

The report gave fours recommendations for the G20 to take - completing the Doha Development Round by the end of 2011, rolling back protectionism to at least where it was at the start of the global financial crisis, providing continuing support for trade finance both multilaterally and by favorably regulating trade finance, and putting trade and investment permanently on the agenda of the G20 as a high-priority item.

About the investment, the report said foreign direct investment had started to slowly recover in the first quarter 2010, but then suffered again a significant reduction in the second quarter.

"If long-term-oriented FDI flows are to accelerate sustainably in the years to come, governments must continue to avoid impediments to FDI flows and find ways that FDI can move even more freely across all borders and in all directions," it said.

The report also gave recommendations in facilitating foreign investment - ensuring a clear and enforceable regulatory framework, avoiding new impediments and stimulating further opening, and building a better understanding of the mainly positive impact of FDI.

Apart from the Trade & Investment session, the Business Summit had the other three sessions, which were under the theme of finance, green economy, and corporate social responsibility, respectively.