World leaders pledged here Saturday to seek an agreement by the end of the year on how to rescue deadlocked global free trade negotiations as part of a strategy for countering the financial crisis. “We underscore the critical importance of rejecting protectionism and not turning inward in times of financial uncertainty,” the leaders said in their communique at the end of emergency talks aimed at countering the global economic crisis. “In this regard, within the next 12 months, we will refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing World Trade Organization (WTO)-inconsistent measures to stimulate exports,” they said at the end of talks here. “Further, we shall strive to reach agreement this year on modalities that lead to a successful conclusion to the WTO's Doha Development Agenda with an ambitious and balanced outcome,” they said. The leaders of the 20 richest nations, ranging from the United States and major European powers to Russia, China, India and Brazil, acknowledged that their economies “have the largest stake in the global trading system” and as such need to act decisively. The Doha round of multilateral trade liberalization talks was launched in the Qatari capital Doha in November 2001 under the auspices of the 153-member WTO, but has foundered ever since in disputes between developing and industrialized nations. The host of Saturday's G20 leader meeting, US President George W. Bush, said the renewed effort on the Doha negotiations “is a very important part of this summit.” “There is a determined effort to see if we can't complete the modalities for Doha by the end of December,” he said. Earlier Bush kicked off the meeting warning against governments responding to growing economic problems by closing their borders to competition. “One of the dangers during a crisis such as this is people will start implementing protectionist policies,” he said, before adding, “Obviously, you know, this crisis has not ended.” On Friday European Commission head Jose Manuel Barroso warned the US that possible aid for its struggling automakers in the middle of the financial crisis could provoke an EU protest to the WTO. “We are looking at the (US) plan. The plan has not yet been made official but certainly, if it amounts to illegal state aid we will act at the WTO,” Barroso said. The US Congress approved an aid package worth $25 billion in September to help the auto industry invest in new generation car technology and is under pressure to set aside another $25 billion to help the three major US automakers - General Motors, Ford and Chrysler - survive the sharpest market downturn in decades. On Wednesday WTO Director-General Pascal Lamy warned in Geneva that the financing of global commerce is “deteriorating” amid the financial crisis and the situation is likely to worsen over into 2009. “The market for trade finance has severely deteriorated over the past six months, and particularly since September,” Lamy said. “The situation is likely to deteriorate further in the months to come,” Lamy said. Brazilian Foreign Minister Celso Amorim said Friday, he expected the “modalities” of the Doha talks would be resolved by the end of the year allowing for a free trade agreement that would lubricate the world economy. “The question of the World Trade Organization (talks) is timing. It will be easier for the next American president to take an already negotiated agreement before Congress than it will be if he has to negotiate each point,” Amorim said. The Doha round of WTO talks was launched in the Qatar capital in 2001 but broke down in July with negotiators in search of a broad compromise that, in short, would have let poor countries sell more produce to rich countries while giving the US, 27-nation EU and Japan new chances for their manufacturers and service providers in the emerging markets. Brazil was continuing to grow, though, perhaps at a slower rate.
