Toronto summit disappoints on trade issues

The Toronto G20 Summit has ignored warnings over trade finance and taken an inadequate approach to the Doha Round of trade negotiations, threatening the global economic recovery.

In a statement issued today, the International Chamber of Commerce (ICC) secretary-general Jean Rozwadowski said despite the G20's recognition at previous summits of the major role of trade finance in keeping trade flowing, warning signs were being ignored in Toronto.

"The business community has strongly criticised proposals from the Basel Committee on Banking Supervision to increase the risk weighting of trade finance under a new framework to limit bank leverage. The ICC regrets that the Toronto summit does not appear to have heeded these warnings," Rozwadowski said.

He pointed to low-risk trade instruments that were being lumped together with higher-risk, off-balance sheet instruments without appreciation of the potentially adverse effect on the supply of cost-effective trade credit.

At their summit in Pittsburgh, G20 leaders pledged to conclude the Doha Round of multilateral trade negotiations by the end of 2010. But with this deadline fast approaching, the ICC chief said G20 leaders seemed to be backing away, 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 Rozwadowski. "If we do not succeed in restoring trade finance to pre-crisis levels quickly, we risk jeopardising 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."

Rozwadowski said concluding the World Trade Organization's Doha Round would help restore business confidence across the globe, and he called on G20 leaders to uphold their previous commitment to reach agreement on Doha by the end of this year.
(Source:www.cargonewsasia.com)