Sunday, November 23, 2008

Governments must resist protectionism and conclude the Doha Round

Governments must resist protectionism and conclude the Doha Round, say EU Trade Commissioner Ashton, OECD’s Gurria
Brussels, 12 November 2008

The world’s developed nations must do all they can to resist the threat of a return to protectionist policies affecting trade and investment, as these would merely worsen the current gloomy economic outlook, EU Trade Commissioner Catherine Ashton and OECD Secretary-General Angel Gurría said, following a meeting in Brussels. Concluding the Doha Round would be a major contribution and governments should commit to urgent efforts to immediately finalise the Doha Round negotiations, which are so close to completion following the progress made in Geneva in July of this year.

In a joint statement, they committed the European Commission and OECD to working with member countries to strengthen the regulatory framework within which the world economy operates. They also urged governments to resist pressures that would further depress business activity.

EU Trade Commissioner Catherine Ashton said: “Trade and investment create the dynamism that enables communities around the world to share their skills, experience and opportunities. Rather than resorting to protectionism, we need to manage globalization better.”

OECD Secretary General Angel Gurria added: “As recession looms, governments must resist pressures to reduce aid or restrict trade and cross-border investment.”

On the trade front, a successful conclusion of the stalled Doha Development Round of trade talks would help restore business confidence and boost flagging economies, the two sides stressed. They underlined how little remains to be agreed for the Doha "modalities" on agriculture and industrial goods to be concluded. Concluding modalities would pave the way for the full and early conclusion of the Doha Round.

On the investment front, they noted that governments need to stick to their pledges in favour of freedom of investment flows. Investments by sovereign wealth funds, in particular, can play an important role in providing financial liquidity in the current slowdown. Governments have publicly agreed that they should not impose discriminatory measures against sovereign wealth funds, and this agreement needs to be upheld.