Trade and the Financial Crisis

In response to the ongoing global financial crisis, countries have considered various measures to stabilize both the global financial markets and their respective domestic economies. In this context, rescue plans for domestic industries and policies that have the potential to impede both trade and investment activities are now under consideration and in the process of implementation. The U.S. bailout of the Big Three automakers and its stimulus bill that includes a "Buy American Act" are several examples. Similar movements are most likely underway in other countries, both developed and developing.

These activities are underway despite the fact world leaders at the November G-20 summit meeting vowed to refrain from establishing a new trade restriction system over the next 12 months and agreed to work toward a negotiation modality to promptly conclude the WTO Doha Development Round. A similar statement was announced at the APEC summit meeting, which was held last November as well. In reflection of the adverse effects caused by the protectionism of the 1930s, there is a general consensus among experts on the necessity of maintaining a global free-trade system. However, additional debate on the G20/APEC outcome statements is required before they can be effectively implemented. This is the moment when policy discussions based on deep knowledge and insight of international trade and the WTO system are truly required.

Against this backdrop, RIETI will be hosting a Mini-Workshop on Trade and the Financial Crisis featuring experts including Professor Richard Baldwin, a world-renowned expert on trade and strong advocate of free-trade systems, later this month on March 27th. The timing and subject matter of the mini-workshop have been designed to highlight trade policy perspectives and to send a strong message to the next G-20 summit to be held the following week on April 2nd in London.