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G-8 promises trade deal, rejects protectionism

G-8 promises trade deal, rejects protectionism
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First Published: Fri, Jul 10 2009. 01 15 AM IST

Time to talk: Prime Minister Manmohan Singh with US President Barack Obama at the G-8 summit in Italy on Thursday. Jason Reed / Reuters
Time to talk: Prime Minister Manmohan Singh with US President Barack Obama at the G-8 summit in Italy on Thursday. Jason Reed / Reuters
Updated: Fri, Jul 10 2009. 10 39 AM IST
L’Aquila, Italy: The world’s biggest economies meeting in Italy agreed Thursday to reject protectionism and to work towards a global trade deal in 2010, according to their final statement.
“We confirm our commitment to maintain and promote open markets and reject all protectionist measures in trade in investment,” the statement said.
Time to talk: Prime Minister Manmohan Singh with US President Barack Obama at the G-8 summit in Italy on Thursday. Jason Reed / Reuters
The group also said it was “committed to seek an ambitious and balanced conclusion to the Doha developmental round in 2010”, referring to World Trade Organisation-sponsored talks that began in the Qatari capital Doha in 2001.
“In order to fill in the remaining gaps in the negotiations as soon as possible we instruct our ministers in charge of trade to explore immediately all possible avenues for direct engagement within the WTO,” it said.
These measures should be taken before the next summit of the G-20 group of nations in Pittsburg in September, it said.
The declaration came after some confusion prevailed over India’s stand on the issue. Foreign secretary Shivshankar Menon, who has accompanied prime minister Manmohan Singh, earlier denied media reports that India, along with China had made a commitment to a timeline on the talks.
“We have not even discussed it. So far we have discussed only within the G-5 and G-8 themselves are willing to put a timeline for concluding the talks. But the general expectations are that 2010 will be the year people will try and finalise it,” Menon told reporters after the meeting of the Group of Five nations. “Nobody seemed to be ready to put a deadline though.”
The G-5 nations include Mexico, Brazil, China, South Africa and India. The G-8 countries are Germany, Canada, the US, France, Italy, Japan, the UK and Russia.
The trade talks, launched in 2001 in the Qatari capital, aimed at helping poor nations prosper through trade, had stumbled on proposed tariffs and subsidies that protect poor farmers during price fluctuations. The poor nations have also had problems with farm subsidies in the US and the European Union.
Commerce minister Anand Sharma, who took charge last month, had recently claimed that the “impasse” over the Doha talks was “broken.” In an interview with Reuters, Sharma had said: “There is much happening now. The impasse has been broken.”
Now, the G-8 meeting seems to have taken this process forward, especially since a reason the trade talks had broken down last time was because the US and India could not agree on key issues.
While briefing the media, Menon also said G-5 countries, in their meeting on Wednesday, discussed the usage of alternative currencies. Brazilian President Luiz Inacio Lula da Silva has suggested that G-5 should consider using its own currency to settle its trade accounts, Menon said, adding that it would be different from an alternative currency on the lines of what Beijing had proposed. “Even China agreed that it is a long-term issue,” he said.
According to Menon, Manmohan Singh, who met British Premier Gordon Brown at the summit, pointed out that the state of global economy is still fragile. “The Prime Minister mentioned to him that the green shoots of recovery are fragile and most of the indications are still negative…if stimulus is not given to the developing countries, recovery must be delayed,” Menon said.
In the political declaration, the G-5 countries have pledged to “devote appropriate efforts to fundamentally resolve the issue of under representation and inadequate voice of developing countries in international financial institutions, which is urgently needed”.
On Wednesday night, the G-8 issued a statement committing that the group will strive to limit warming global temperature to 2 degrees Celsius above pre-industrial levels, but did not specify individual emission reduction targets nor any clear numbers on how the developed world would support developing countries in tackling adverse effects of climate change.
The statement fell short of expectations for a meaningful climate deal this year after India and China declined to commit to any emission-reduction target.
At the earlier meeting of the major economies forum (MEF) at Mexico, India and China had refused to negotiate an agreement, which included emission cuts on the part of emerging economies, Mint had reported on 27 June.
“For any long-term goals there have to be credible mid-term goals in the range of 25-40% (of emissions at 1990 levels),” Dinesh Patnaik, a top Indian negotiator had said.
G-8 nations have promised cuts in emissions in the range of 10-14% below 1990 levels.
The MEF process, which is held parallel to the United Nations process on climate change, brings together the top greenhouse gas emitters of the world responsible for about 80% of the world’s emissions in an effort to break the gridlock in global climate talks.
Reuters, AFP and Mint’s Padmaparna Ghosh and Asit Ranjan Mishra in New Delhi contributed to this story.
liz.m@livemint.com
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First Published: Fri, Jul 10 2009. 01 15 AM IST