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.
BACK IN THE NEIGHBORHOOD: The planned transit by the ‘Baden-Wuerttemberg’ and the ‘Frankfurt am Main’ would be the German Navy’s first passage since 2002 Two German warships are set to pass through the Taiwan Strait in the middle of this month, becoming the first German naval vessels to do so in 22 years, Der Spiegel reported on Saturday. Reuters last month reported that the warships, the frigate Baden-Wuerttemberg and the replenishment ship Frankfurt am Main, were awaiting orders from Berlin to sail the Strait, prompting a rebuke to Germany from Beijing. Der Spiegel cited unspecified sources as saying Beijing would not be formally notified of the German ships’ passage to emphasize that Berlin views the trip as normal. The German Federal Ministry of Defense declined to comment. While
‘REGRETTABLE’: TPP lawmaker Vivian Huang said that ‘we will continue to support Chairman Ko and defend his innocence’ as he was transferred to a detention facility The Taipei District Court yesterday ruled that Taiwan People’s Party (TPP) Chairman Ko Wen-je (柯文哲) be detained and held incommunicado over alleged corruption dating to his time as mayor of Taipei. The ruling reversed a decision by the court on Monday morning that Ko be released without bail. After prosecutors on Wednesday appealed the Monday decision, the High Court said that Ko had potentially been “actively involved” in the alleged corruption and ordered the district court to hold a second detention hearing. Ko did not speak to reporters upon his arrival at the district court at about 9:10am yesterday to attend a procedural
The Executive Yuan yesterday warned against traveling to or doing business in China after reports that Beijing is recruiting Taiwanese to help conceal the use of forced Uighur labor. The government is aware that Taiwan-based influencers and businesses are being asked to make pro-Beijing content and offered incentives to invest in the region, Executive Yuan acting spokeswoman Julia Hsieh (謝子涵) told a news conference. Taiwanese are urged to be aware of the potential personal and reputational harm by visiting or operating businesses in China, Hsieh said, adding that agencies are fully apprised of the situation. A national security official said that former Mainland
DRONE DEFENSE: The military plans to invest nearly NT$6.9 billion in a Chiayi County campus to serve as a production center for domestically developed UAVs, an official said The Ministry of National Defense plans to use a proposed aerospace and uncrewed aerial vehicle (UAV) industry campus to produce military drones, a defense official said yesterday. The campus in Chiayi County’s Minsyong Township (民雄) would receive nearly NT$6.9 billion (US$216.12 million) to build factories, hangars and UAV testing facilities, the ministry’s budget proposal submitted last month to the Legislative Yuan showed. The Chungshan Institute of Science and Technology, the ministry’s research and development arm, is to oversee the project, it said. Speaking on condition of anonymity, the defense official said the information disclosed by the report suggested that the campus would serve