Thursday May 28, 09:53 AM
British PM warns global trade at risk
WASHINGTON (AFP) - British Prime Minister Gordon Brown on Thursday warned that global trade was in dire straits due to the economic crisis and called for urgent action against protectionism and trade barriers.
In an opinion article in the Wall Street Journal, Brown also said world economies may need to commit more than the 250 billion dollars of trade financing that was pledged at last month's G20 summit in London.
The fall in trade has reduced about 100 million people to poverty and hit both rich and poor nations alike, he argued.
"The simple truth is that trade is the most serious casualty of the global financial crisis, with a vicious circle emerging of falls in exports leading to falls in production and rising job losses leading to further falls in consumer demand, exports, etc.," said Brown.
Noting governments' agreement in April to hundreds of billions in trade financing over the next two years, Brown said "our second step must be to ensure that governments and international organizations honor the commitments they made.
"Indeed, we may need to go further and provide even more money to finance international trade."
The British prime minister said that the countries most affected by the global economic downturn were countries most dependent on exports, such as Japan, China, Germany and the United States.
He also warned of the financial crisis's effects on the poor.
"Some 100 million more people are in poverty as a result of the crisis. All the progress we have made to reduce poverty is in danger of being wiped out," Brown said.
Recalling that "trade was the driver of postwar recovery in Japan, Germany, the rest of Europe and the US, and the engine of growth in Asia in recent decades," Brown said "there can be no recovery in the global economy without a revival of world trade."
He called on the world's major economies to "do whatever is necessary to support growth this year and next, managing their economic policies to maintain global demand as we make the necessary adjustments toward achieving balanced global growth.
"But stimulating demand may not be enough. There remains a critical problem with the funding necessary to finance trade flows, the lifeblood of the global economy. If banks cannot provide the financing, the international community must step in to fill this gap," he said.
Brown, who hosted the London meeting in April on the global economic crisis, hailed the G20 summit as the start of a "new world order."
World leaders from the Group of 20 developed and developing nations pledged a total package of more than one trillion dollars to the International Monetary Fund and other finance and trade institutions helping struggling countries through the turmoil over the next five years.
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