G8 rejects protectionism, calls for "rapid" Doha deal (Roundup)

Jul 8, 2009, 19:18 GMT

L'Aquila, Italy - Group of Eight (G8) leaders on Wednesday rejected protectionism and called for a quick conclusion to the stalled Doha round of talks on world trade in an official statement.

'We reconfirm our commitment to keep markets open and free and to reject protectionism of any kind. In difficult times we must avoid past mistakes of protectionist policies,' the leaders of Britain, Canada, France, Germany, Italy, Japan, Russia, the United States and the European Union said.

The G8 leaders, who met for their annual summit in the Italian town of L'Aquila, called for a 'rapid, ambitious, balanced and comprehensive conclusion of the Doha Development Agenda on the basis of progress already made' in World Trade Organization (WTO) talks.

They hailed 'signs of stabilization' in world financial markets following the catastrophic slump that began in the autumn, and said that they 'believe that the turnaround will be reinforced as our (economic stimulus) measures reach their full effect.'

But they stressed that 'the situation remains uncertain and significant risks remain to economic and financial stability.'

To restore confidence, it is an 'urgent priority' to repair trust in the banking sector, including by dealing with so-called 'toxic' assets whose value can no longer be estimated, they said.

The summit opened amid the worst global downturn in decades, with forecasts from the WTO that global trade will drop by 10 per cent in 2009 compared with last year.

On Tuesday, WTO Director General Pascal Lamy urged the G8 to fight protectionism and complete the Doha Development Round of trade talks, launched in Qatar in 2001, by the end of next year.

The talks have stalled over differences between developed and developing nations on market access, subsidies and tariffs.

The European Union on Wednesday echoed Lamy's call for a 2010 deadline, with European Commission President Jose Manuel Barroso describing the target as 'realistic.'

'I hope we can make progress towards a balanced and successful conclusion of the Doha development agenda. A clearly defined timetable for this will be essential. For me, this means 2010,' said Barroso before attending Wednesday's talks with G8 leaders.

But the G8 statement, approved on the eve of talks with India, Brazil and other major developing economies, did not set a deadline for the conclusion of the Doha round.

Despite their call for caution, leaders also looked beyond the crisis, calling for 'appropriate strategies for unwinding the extraordinary policy measures taken to respond to the crisis once the recovery is assured.'

'These 'exit strategies' will vary from country to country depending on domestic economic conditions and public finances, and must ensure a sustainable recovery over the long term,' they said.

That wording balances the concerns of the United States, which is calling for stronger stimuli, and EU powerhouse Germany, which is eager to rein in public spending as soon as the crisis is over.

G8 leaders also called for more transparency in world oil markets, after oil prices soared by 75 per cent since the spring.

'It is in the interest of both producers and consumers to enhance transparency and to strengthen their dialogue towards reducing excessive volatility in the market,' the statement said.