Protectionism warned as threat to fragile global recovery
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World politicians and entrepreneurs attending the annual Boao Forum for Asia (BFA) Saturday called to prevent trade protectionism from posing a real threat to the fragile global economic recovery.
The worst financial crisis since 1930s plunged the world economy into downturn last year, the first time since the Second World War. But many economies are recovering at unexpectedly quicker rates as massive fiscal stimulus has paid off.
The world economy was in a recovery, but the global demand was still worryingly weak, Yi Xiaozhun, China's deputy commerce minister, said at the BFA meeting in Boao in south China's island province of Hainan.
Many signs also showed a rise of trade protectionism as more and more countries took protectionist measures, Yi said.
Former Chinese Vice Premier Zeng Peiyan said the once strong support for international cooperation appeared to be eroding as the financial crisis subsides, which is "even more worrying."
Some nations were verbally against protectionism, but they in fact imposed anti-dumping or anti-subsidy measures and made a fuss about exchange rate problems, Zeng wrote in the BFA official publication.
Up to 250 anti-dumping complaints were raised last year, 20 percent more than a year earlier, and 41 anti-subsidies complaints, up 193 percent year-on-year, according to the World Trade Organization (WTO).
China has become the biggest victim of trade protectionism, according to the U.K.-based Center for Economic Policy Research. A total of 61 trading partners had taken 160 trade protectionist measures against the world's third-largest economy between November 2008 and January 2010, Further 111 protectionist measures are in the pipeline.
But China organized buying sprees to Europe and the United States amid the financial crisis, quite a stark contrast to the rising trade protectionism.
Furthermore, China posted 7.24 billion U.S. dollars of trade deficit in March, the first monthly deficit in six years, the General Administration of Customs said Saturday.
Long Yongtu, BFA's secretary-general, told Xinhua that the post-crisis period needed more unity and cooperation, but trade protectionism damaged the basis for unity and sent a wrong signal.
Victor Fung, Chairman of the International Chamber of Commerce, said that if the countries resort to protectionism, the economic recovery, already weak due to relatively high unemployment, would be further left in peril.
The Group of 20 would continue to stay vigilant against trade protectionism as the global economy faced uncertainties on the road to recovery with high unemployment rate this year, according to a WTO report released in early March.
Fung said most importantly nation leaders should be told not to abuse protectionism and to avoid trade frictions.
"The global economy would record solid recovery if no more protectionist measures were taken in the coming 12 months," he said.
The promotion of Doha round of trade talks, stalled for years over differences in agricultural and services sectors, was an effective tool to curb all kinds of protectionism, Fung said.
"Free trade is very important to global economic recovery," said Yi. He added that the Doha round, if completed, would help create a large number of jobs and guarantee global economic recovery.
Goh Chok Tong, Senior Minister and former Prime Minister of Singapore,also called to guard against trade protectionism under the green and environmental protection labels.
The developed countries should help developing countries to upgrade technology rather than abusing protectionism, Goh said.
"We should work together to resist all kinds of trade protectionism, otherwise there will be no economic recovery and growth," Yi said.
The three-day conference, under the theme of "Green Recovery: Asia's Realistic Choice for Sustainable Growth," will conclude on Sunday.
The forum is committed to promoting regional economic integration and bringing Asian countries even closer to their development goals. It attracted around 2,000 political and business heavyweights and experts from Asia and around the world.
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