By Zhu Qiwen
As recovery from the global recession has seemingly arrived earlier than expected in most major economies, the Group of 20 finance ministers and central bankers who met in London last week has had the luxury to make "exit strategy" a topic for discussion.
The group was right to agree that it is far too soon to begin unwinding the unprecedented stimulus measures that member states have adopted to fight the recession.
However, if it cannot put the revival of the stalled Doha Round as well as the success of the all-important Copenhagen climate talk firmly on the agenda of its meeting in Pittsburgh later this month, G20 policymakers will sooner or later find themselves preparing for a second stimulus plan to deal with a double dip of their economies. It is still unclear if the big bill of the first stimulus package is fiscally responsible for countries with huge budget and current account deficits. A second one will only make the case much worse.
The need for G20 to put global trade talks and the UN climate change conference at the center of its agenda is obvious.
Without the former, global efforts to fight the economic downturn would be seriously compromised by the time-honored rise of protectionism during hard times. There are already signs of some countries erecting trade barriers in various forms to protect domestic jobs.
In absence of the later, that is climate change, the global economy is unlikely to find a new growth model that is green enough to be sustainable. This December, at the climate change conference in Copenhagen, world leaders would gather to thrash out the details of a post-Kyoto deal. Some rich countries are still refusing to accept their share of greenhouse gas reduction responsibility in line with historical accumulative and per-capita emissions.
Worse, as Pascal Lamy, head of the World Trade Organization, recently warned, failure to reach an agreement at the climate change talks in December would threaten a much needed overhaul of the international trading system.
As a united front to combat the global financial and economic crisis, G20 clearly has a huge stake in preventing the world from being hit by the double whammy of a breakdown in discussions about reducing greenhouse gas emissions and unilateral carbon tariff that create more problems than it solves.
The good news is that trade ministers from the world's key trading nations managed to inject momentum in the stalled global trade talks after an informal two-day meeting in New Delhi last week. As a result, WTO negotiators will gather in Geneva on Sept 14, more than a year after the ministerial-level discussions collapsed after a spat between industrialized and emerging markets over how to open up trade.
Admittedly, it is premature to put too much faith in the latest efforts to conclude the Doha Round of talks before the end of 2010 given that so many deadlines have been missed over the past eight years. But there is still cause for optimism.
Therefore, in Pittsburgh, G20 leaders need to do what they can to push a trade accord as part of the cure for the crisis while sincerely keeping their promise of opposing protectionism.
Besides, to pursue a global recovery that can last, they must throw all their weight behind a success in Copenhagen, which is inseparable from any meaningful long-term response to the global crisis. That means G20 policymakers do not have much time to tinker with what needs to be done. Instead, they are running out of time with a green task that may be too late to accomplish in time.
(China Daily September 7, 2009)
