Toronto summit disappoints on trade issues
ICC, which believes that trade has a vital role to play in the global economic recovery, is disappointed by the Toronto G20 Summit’s inadequate approaches to two key trade issues: trade finance and the Doha Round of trade negotiations.
ICC has been championing a better treatment of trade finance since the onset of the financial crisis. We applauded the G20’s recognition at previous summits of the major role of trade finance in keeping trade flowing. Since then, the business community has strongly criticized proposals from the Basel Committee on Banking Supervision to increase the risk weighting of trade finance under a new framework to limit bank leverage.
ICC regrets that the Toronto summit does not appear to have heeded these warnings.
Low-risk trade instruments are being lumped together with higher-risk, off-balance sheet instruments apparently without appreciation of the potentially very adverse effect on the supply of cost-effective trade credit,” said ICC Secretary General Jean Rozwadowski.
At their summit in Pittsburgh, G20 leaders pledged to conclude the Doha Round of multilateral trade negotiations by the end of 2010. With this deadline fast approaching, the G20 leaders now seem to have backed away from it, saying the round should be concluded “as soon as possible”.
“Trade is the lifeblood of the global economy and the world needs more of it at this critical moment, not less,” said Mr Rozwadowski. “If we do not succeed in restoring trade finance to pre-crisis levels quickly, we risk jeopardizing the economic recovery, which is still fragile.”
“The multilateral trading system has spurred the phenomenal economic growth of recent years and pulled hundreds of millions of people out of extreme poverty,” Mr Rozwadowski continued. “Finally concluding the World Trade Organization’s Doha Round would help restore business confidence across the globe. We call on the G20 leaders to uphold their previous commitment to reach agreement on Doha by the end of this year.”