Global talks to reduce international trade barriers

By Staff
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Google Oneindia News

SINGAPORE, Sep 17: Global talks to reduce international trade barriers must be revived to help break down the risks to growth from protectionism, U.S. Treasury Secretary Henry Paulson said on Sunday.

''Trade liberalisation is a vital component of our agenda and the suspension of the Doha Round represents a huge disappointment,'' Paulson said in remarks prepared for delivery to the International Monetary Fund.

The Doha talks stalled amid bitter disagreement over how to break down barriers to agricultural trade, among other contentious issues.

''The global community simply must resist the forces of protectionism and isolationism,'' Paulson said, adding that failure to reduce barriers particularly hurt poorer countries that need trade for growth.

Paulson said the United States was ''fully committed'' to getting the Doha talks back on track and called on other nations to step forward as well.

At a news conference on Saturday after a meeting of Group of Seven finance ministers, Paulson specified: ''I'm not coming to bring any new concessions ... but I believe if we have an acceptable deal, I believe we'll be able to get it through Congress.'' The U.S. Treasury chief was participating in IMF and World Bank meetings at which member countries were set to approve small voting quota increases for China, Brazil, Mexico and South Korea. But Paulson said the global lender will need to keep moving on reform if it wants to remain relevant.

''To ensure its continued centrality, we must together modernize the IMF and act swiftly to implement an ambitious reform agenda,'' Paulson said, adding the current round of quota increases would only be ''a small down payment'' to more fundamental changes.

''In particular, the IMF needs a new, simplified quota formula with GDP as the dominant variable,'' Paulson said, a position the United States has adopted that has led some European countries to express reservations for fear that they lose voting clout.

Paulson said the U.S. position was not designed to gain American voting share and noted the United States has pledged not to seek any additional share beyond what it currently holds.

''Indeed, we challenge other industrial countries to join the United States in forgoing higher voting shares in the second stage,'' he said, adding that he hoped IMF members could agree within a year on increasing voting share for the poorest countries.

Paulson also said the IMF should soon be given strengthened powers for currency surveillance in order to make it more effective.

''This includes considering the consistency of exchange rate policies with the international system and investigating misaligned currencies regardless of intent,'' he said.

The Bush administration supports having the IMF become a stronger voice on currency issues at a time when it has only moderate leverage with key emerging countries like China whose currency is widely considered to be under-valued and contributing to huge U.S.

trade deficits.

Paulson noted that there was concern about the IMF's finances because more countries are paying off their loans.

But he said it was ''premature to take decisions to fundamentally alter the way the Fund is financed, especially if they may loosen the IMF's budget constraint before giving greater thought to the appropriate role and size of the Fund in a world of reduced demand for its lending.'' A commission is studying how to keep the IMF adequately financed and its findings are to be the basis for talks about future financing.

REUTERS

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