G20 leaders agree on protectionism
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LEADERS of the G20 nations, the world’s biggest developed and emerging economies, have agreed to oppose protectionism, President Xi Jinping said yesterday.
“We have agreed ... to support the multilateral trade system and oppose protectionism,” he said after hosting the G20 summit in Hangzhou.
Freer trade poses a dilemma for the leaders of several countries, who have to contend with rising populism and a perception that the global economic order exemplified by the G20 is not working for ordinary people.
Xi said that relying only on fiscal and monetary policy for growth would not work.
“We need to reignite the engine of growth via innovation,” he said, adding that the G20 had adopted “guiding principles” for investment policy management.
“It is the world’s first framework of multilateral investment rules,” he said without giving details.
Leaders at the G20 summit have tried to walk a fine line — acknowledge anti-globalization anger while arguing that ever more liberal trade is the cure for sluggish economies.
“The feeling of the G20 is that if we do not address the question of fairness, it will endanger global governance as we know it,” a senior European diplomat told reporters.
G20 leaders sought to put a gentler face on global trade, touting its benefits in lifting millions out of poverty, while acknowledging that too many had been left behind.
Germany’s Angela Merkel best illustrated the delicate approach, calling for the system to be made fairer but also speaking out against the temptation to look inward, with “protectionist measures that put the brakes on growth.”
“The fight against inequality is an important theme, to firmly connect growth and social justice,” Merkel said.
French President Francois Hollande said: “France is for globalization but on condition that it is regulated, that there are principles, standards, particularly for the environment, for society.”
US President Obama came to the summit to advocate his two signature trade deals for the European Union and Asia-Pacific. But at home his party’s nominee Hillary Clinton has disowned the policies, which stand to lose her votes.
For opponents of free trade, there is no bigger target than the Transatlantic Trade and Investment Partnership which Washington wants to finalize before Obama steps down in January.
Activists have criticized it since negotiations began in 2013, believing it will give big business unfair benefits and allow multinationals to escape regulation through the backdoor.
Obama admitted before the G20 summit that there was a “reaction” to globalization and that people were “absolutely right” to worry about inequality, but insisted: “The answer is not to pull up the drawbridge.”
With a note of regret echoed by other leaders at the summit, he said governments should provide better benefits and protections for workers, as “unfortunately we haven’t done enough of that.”
Many working class citizens in developed countries believe the benefits from globalization have flowed disproportionately to the wealthy, educated and mobile, while their own incomes have stagnated.
Canadian Prime Minister Justin Trudeau set the pace when he arrived in Hangzhou, saying leaders must push back against a tide of protectionism and nationalism.
Trudeau did not explicitly reference Donald Trump’s populist campaign for the US presidency, but alluded to the Republican nominee’s platform as he argued for the benefits of free trade.
“We know that building walls ... does not create opportunity, growth, or benefits for the middle class.”
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