PARIS (MNI) – Germany’s Chancellor Angela Merkel, speaking out
ahead of this week’s G20 leaders’ summit in Seoul, warned that
protectionism is the greatest danger facing the global economy and
rejected a U.S. proposal to set limits on current account imbalances.
The U.S. proposal, which would set specific targets for balance of
payments surpluses and deficits is “too narrowly conceived,” Merkel said
in an interview published in Tuesday’s edition of the Financial Times.
“I don’t think much of quantified balance of payments targets,”
Merkel was quoted as saying. “It is not just a question of exchange
rates, but also a question of competitiveness.” Germany has been
increasingly criticized for its surplus, and has retorted that its
exporting success is based on the efforts it has made over the past
several years to be more competitive.
Merkel also fretted about new non-tariff trade barriers being
erected by some G20 members, including in the U.S. Congress, as well as
“other attempts to make market access more difficult.”
She called for a new effort to complete the Doha trade liberalize
round. “We have been talking about it for many years, but there is
another chance in 2011 to complete it at last,” she said.
She added: “The greatest danger that threatens us is protectionism,
and we are still not taking enough steps to ensure genuinely free trade.
There is something we can do that does not cost us much, and does not
create any new debts, and that is to finish the Doha round. That is the
priority for me.”
Merkel said China should be convinced with “facts and benchmarks”
to set a “fair exchange rate” for the renmimbi, rather than being
attacked for its currency policy.
She also said that tackling the issue of banks that are “too big to
fail” was “an important task for 2011.”
–Paris newsroom, +331-42-71-55-40; bwolfson@marketnews.com
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