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DIPLOMACY
Korean President Lee Myung-bak
(second from right, front row)
and other world leaders pose for
a group photo during the G20
Summit on Financial Markets and
the World Economy in
Washington on Nov. 15
Lee Warns against
Trade Protectionism at G20 Economic Summit
President Lee Myung-bak called
on world leaders to conclude a
long-delayed accord to reduce
subsidies and tariffs, warning that
trade protectionism will hurt emerging
markets.
In a keynote speech at the G20
economic summit in Washington, he
also suggested currency swap lines between
advanced and emerging
economies and more funds to developing
countries to help alleviate a
credit crunch in the global financial
markets.
“G20 nations must lead the way
for the stalled WTO Doha Agreement
to be concluded as soon as possible,”
he said, referring to the World Trade
Organization’s seven-year-old talks.
“What we are concerned about is
spread of protectionism due to the current
difficult economic situation.”
He said any spread of protectionism
will make the global economy
more susceptible to recession and
harm weak emerging economies.
In this context, Lee called for global
leaders to agree on a “Stand-Still”
declaration in which they would no
longer create new barriers to trade and
investment.
Lee, French President Nicolas
Sarkozy and several other heads of
state have called for sweeping reform
of the IMF and the establishment of a
new global financial system to keep
pace with recent changes in the global
economy.
Lee told the summit forum, “I think
this short session should prioritize stabilization
of the global financial market
and minimizing its adverse impact
on economic fundamentals, although
today’s session was supposed to deal
with reform of the international financial
systems to prevent recurrence of
the financial crisis.”
Lee also urged the world’s leading
economies to establish currency swap
lines to help provide foreign currency
liquidity to emerging economies.
Korea currently has a $30 billion
currency swap arrangement with the
United States, a currency line of $13
billion with Japan and a $4 billion
currency deal with China.
In a speech at the working lunch,
Lee urged global leaders not to repeat
the “beggar-thy-neighbor policies” of
the Great Depression days in order to
bring about a speedy recovery from
the ongoing financial crisis.
“Going further back in history, we
also learn that during the Great
Depression of the 1930s, countries decided
to increase tariffs and raise trade
barriers, which inevitably stifled trade
and prolonged worldwide economic
stagnation. We must not repeat such
beggar-thy-neighbor policies.”
Yonhap
“Beggar-thy-neighbor policies”
refers to international trade regimes
that emphasize competitive devaluations
and increased protective barriers
that one country institutes to gain at
the expense of its trading partners.
Meeting Korean journalists after
the economic conference, Lee categorized
the G20 summit as a major power
shift from a handful advanced
countries to a number of countries
representing a variety of economic developments.
“This summit should be seen as a
historic one that can happen only once
in a hundred years as emerging
economies were taking part in the
process to discuss major global issues,
which were monopolized by G7 advanced
economies,” Lee said.
Lee expected that the summit of
the world’s 20 biggest economies will
develop into a major forum to discuss
energy, global warming and other major
global issues as well as the global
financial crisis.
“From now on, such global issues
should be discussed both by developed
and emerging economies, and I presume
that they will be,” he said.
The President noted that Korea will
be the chair country of the summit in
2010, after Britain next year. ■
14 KOREA DECEMBER 2008
DECEMBER 2008 KOREA 15