G7 finance ministers and central bank chiefs were to begin meeting in Rome late yesterday to discuss the global financial crisis amid stern warnings against protectionism.
Japanese Finance Minister Shoichi Nakagawa warned that his delegation would take a “resolute stance” against protectionism at the two-day meeting of the G7 economic powers, calling it “absolute evil.”
“For the US, Europe and other countries that sought liberalization from Japan to run to protectionism is an absolute evil,” Nakagawa told reporters before leaving for Rome.
Nakagawa said on Tuesday that the G7 nations — Britain, Canada, France, Germany, Italy, Japan and the US — were expected to discuss the “Buy American” clause in a US economic stimulus package.
Japan, the EU and Canada have fiercely attacked the clause, warning it could start a global round of tit-for-tat trade reprisals and set a bad example for other countries mulling their own stimulus projects.
US senators voted last week to soften the clause, which barred spending on a project unless all the iron, steel and manufactured goods involved are made in the US.
Meanwhile, France has fiercely defended its plan to pump billions of dollars into its struggling auto sector against EU charges of protectionism.
The plan has been sharply criticized by Slovakia and the Czech Republic, which currently holds the EU presidency. Both countries host foreign-owned car factories on their territory.
The Italian finance ministry said ahead of the meeting: “Fostering a common framework for policy action and fighting protectionist pressures, which tend to gain strength in difficult economic conditions, will be the centerpiece of our work.”
Meanwhile, the World Bank said on Thursday that the global economic crisis was driving millions into poverty in developing countries and urged the G7 to address the issue in Rome.
The World Bank said new research found that up to 53 million more people have been trapped in poverty amid the spreading economic crisis exacerbated by a financial system meltdown in September.
World Bank president Robert Zoellick, who will be attending the meeting, said that world leaders must not forget the needs of the most vulnerable.
Meanwhile, IMF managing director Dominique Strauss-Kahn warned governments against protectionism “through the back door” on Thursday, as they seek to prime their economies in the midst of the global economic downturn.
Speaking ahead of a G7 meeting, the IMF boss said it was unlikely that governments would resort to openly protectionist measures — notably raising tariff barriers — but he said there was a “really big” risk that the financial sector could be hit by a wave of protectionism.
“When governments provide some new resources or recapitalization of banks, they may add some comment saying that the money should stay at home,” Strauss-Kahn said.
He also said there was a risk of ‘”buy national” provisions being attached to stimulus packages, like that considered by US lawmakers.
“You may have in different stimulus packages some comment or amendment saying that this money also should be used to buy national products, and these kinds of things. So this kind of protectionism may come back,” he said.
His comments come as the US Congress takes the final steps toward approving a US$789 billion package aimed at stimulating the world’s largest economy.
“The risk of a ‘beggar your neighbor’ policy is still high, and I think it is part of our job to explain that in no way in a global crisis [should there] be a domestic or national solution: we have to find a global response,” he said.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
SECURITY RISK: If there is a conflict between China and Taiwan, ‘there would likely be significant consequences to global economic and security interests,’ it said China remains the top military and cyber threat to the US and continues to make progress on capabilities to seize Taiwan, a report by US intelligence agencies said on Tuesday. The report provides an overview of the “collective insights” of top US intelligence agencies about the security threats to the US posed by foreign nations and criminal organizations. In its Annual Threat Assessment, the agencies divided threats facing the US into two broad categories, “nonstate transnational criminals and terrorists” and “major state actors,” with China, Russia, Iran and North Korea named. Of those countries, “China presents the most comprehensive and robust military threat