G7 leaders reject trade protectionism
Flaherty makes strong case against 'populist politics'
Group of Seven nations have "collectively taken exceptional measures" to address the global economic downturn and are committed to avoiding protectionist measures, G7 finance ministers and central bank governors said at the end of talks in Rome.
"The financial measures taken by each of us are helping to stabilize extremely volatile financial markets," they said in a statement Saturday after two days of meetings.
The leaders said that kind of stability remains their highest priority in light of an economic slump that has led to significant job losses, which they said were expected to persist through most of 2009.
The G7 finance ministers agreed on the need to get their respective stimulus packages flowing as quickly as possible and to improve access to financing, Canadian Finance Minister Jim Flaherty said.
The joint communique also cautioned against trade protectionism.
"I don't mind saying that I made the point quite strongly to my colleagues in the G7 that any protectionist measures that were taken now would be regretted later," Flaherty said in a conference call from Rome.
"It's populist politics — it always is — to cater to short-sighted, short-term demands like protectionist measures within a particular country," he said.
Democrats in the U.S. Congress, New Democrats in Canada and at least two major Canadian labour unions have pushed for domestic buying provisions in the two countries' respective recession-fighting stimulus packages.
Flaherty, pointing to the lessons of the Depression era, said modern history has proven that protectionism is counter-productive for a sustained economic recovery.
"I encouraged all of my colleagues to resist that kind of populist political temptation," he said.
"An open system of global trade and investment is indispensable for global prosperity," the communique said. "The G7 remains committed to avoiding protectionist measures, which would only exacerbate the downturn, to refraining from raising new barriers and to working towards a quick and ambitious conclusion of the Doha Round."
The Group of Seven industrialized nations includes Canada, France, Germany, Italy, Japan, Britain and the United States. The G7 leaders meeting in Rome said they welcome action from other countries, including China, to boost the global economy.
The meeting marked the international debut of U.S. Treasury Secretary Timothy Geithner, who assured his counterparts that President Barack Obama's $787 billion US plan to resuscitate the economy, approved Friday, would not violate in any way the United States' commitment to free trade.
With files from the Canadian Press and Associated Press