A trio of trade groups are calling on the countries of the G20 for a stronger commitment to more open trade and investment.

The Organization for Economic Co-operation and Development, the World Trade Organization and the UN’s Conference of Trade and Development have issued a joint report recommending that the G20 leaders must remain vigilant against protectionism. The report forecasts that the volume of world merchandise trade will fall by 10% in 2009, and foreign direct investment will contract by 30% to 40% this year, due largely to a sharp collapse of investment flows in OECD countries.

“The global crisis cannot be deemed to be over yet, despite welcome recent indications of economic recovery in some parts of the world. Growing unemployment due to the crisis will continue to fuel protectionist pressures for the years to come,” noted the heads of the three organizations, Angel Gurría, secretary-general of the OECD, Pascal Lamy, director-general of the WTO, and Supachai Panitchpakdi, secretary-general of UNCTAD.

“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. In this regard, G20 leaders should undertake a stronger commitment to open markets and make concrete their call to conclude the Doha Round in 2010,” they stressed.

The heads of the three organizations said they were encouraged by investment policies in the G20 countries, but they warned that some governments have established support schemes that can discriminate against foreign-controlled companies or raise barriers to outward investment flows, and they 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.

IE