The Organisation for Economic Co-operation and Development (OECD), World Trade Organisation and the UN’s Conference of Trade and Development have called on the leaders of the G20 countries to make a stronger commitment to open trade and investment as the global economy begins its recovery from the crisis.
In a combined report on G20 Trade and Investment Measures, Angel Gurría, Secretary-General of the OECD, Pascal Lamy, Director-General of the WTO and Supachai Panitchpakdi, Secretary-General of UNCTAD said G20 leaders must remain vigilant against protectionism. “It is the responsibility of all world leaders, in particular those of the G20 members, to take the appropriate policy actions so that trade and international investment can help economies recover from the global crisis on a sustained basis,” they said.
WTO and OECD rules have acted as a safety harness preventing the adoption of wide-scale protectionist policies. The heads of the three organisations said they were encouraged by investment policies in the G20 countries as they had, on the whole, increased openness and clarity for foreign investors. At the same time, some governments have established support schemes that can discriminate against foreign-controlled companies or raise barriers to outward investment flows.
The OECD, WTO and UNCTAD heads also warned that some of the fiscal stimulus packages introduced to tackle the crisis contain elements that favour domestic goods and services at the expenses of imports.
“It is urgent that governments start planning a coordinated exit strategy that will eliminate these elements as soon as possible,” they said.
The report sees the volume of world merchandise trade falling by 10% in 2009 and foreign direct investment plummeting by 30% to 40% this year, due largely to a sharp collapse of investment flows in OECD countries.