The fifth meeting of the 2010 G-20 Seoul Summit holds a very crucial connotation, all the more when the world is emerging from a severe global economic crisis.
Among the many agendas of the G-20 summit including ensuring of global economic recovery, balanced global growth and global financial safety nets; the issue of protectionism needs to be visited deeply.
Decades and decades long chasing of countries to find economic solace for attaining stable and sustainable growth would not be meaningful without common co-operation.
The outline of this G-20 summit has profound implications on bringing together systemically important industrialized and developing economies. Discussion on key issues in the global economy is decisive as it would remain dominated by jigsaw between developed and developing nations.
Developing countries want developed countries to not only open up their markets by reducing protectionist measures, but also remove subsidies that the latter give to its producers.
Now given that America is putting up protectionist measures (especially with regard to outsourcing) in light of the recent economic slowdown, the G20 meeting assumes special significance for India and many other developing nations.
Basically there has to be some framework for global trade. The irony begins when developing countries want free access to foreign markets while foreign markets want to protect their interests.
Protectionism and subsides are the main issues because in the backdrop of the economic slowdown the world has realised that affected countries are still acting on their impulses.
Adopting protectionist policies becomes incumbent for many developed countries just like that happened with the American economy. People were losing jobs in the US so outsourcing to India became a target.
The Indian industry has been pushing hard to protest protectionist measures such as hiking visa fee for IT professionals and ban on outsourcing. US on the other hand has been seeking greater access to India`s financial, retail and other markets.
The US stand gets further vindicated by President Barack Obama’s statement during his India visit (just five days before the summit). Seeking reciprocity to break trade and investment barriers, Obama said "By opening markets and reducing barriers to foreign investment, India can realise its full economic potential as well."
Basically the Doha round of trade talks which has been going on to settle trade and protectionism issues have so far not been conclusive.
The philosophy of liberal global trade is that trade should be free and fair irrespective of circumstances. To achieve this, lot of agreements need to be made. Because these issues are plaguing the global economy and the G20 in the present circumstances is the forum to address them
The Doha round was languishing because the global economy was doing well before 2008. But post slowdown, those issues have come to the forefront again.
Expressing hope on the G20 summit Commerce Minister Anand Sharma said that the summit is likely to give a new momentum to the nine-year-old Doha round of multilateral trade talks.
`Sustaining trade and investment flows is critical for the future prosperity of developed and developing economies alike. One of the main threats to the revival of trade flows is the rising protectionist pressures and continued delay in concluding the Doha round. Therefore, strengthening the multilateral trading system by concluding the Doha round at the earliest is a vital imperative,` Sharma recently said.
The G-20 summit in Seoul infuses fresh lease of life into the possibility of conclusion of the Doha round. But it would be subjective concept to see whether the objective to lower trade barriers around the world can come to a fruitful end or not.