G20 calls for stable oil prices, FTA

XIANGHE (China) — The Group of 20 most industrialised and largest developing countries yesterday called for stable oil prices and greater efforts to free up trade to reduce poverty and sustain economic growth.

By (AFP)

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Published: Mon 17 Oct 2005, 10:34 AM

Last updated: Thu 2 Apr 2015, 5:36 PM

At the end of a two-day meeting of G20 finance ministers and central bank governors outside Beijing, the group voiced concern about the threats of historically high oil prices and rising trade protectionism.

Persistently high and volatile oil prices could “increase inflationary pressures, slow down growth and cause instability in the global economy,” the G20 said in a joint statement.

Major producers were urged to boost oil supply and refining capacity.

“We agreed to strengthen our cooperation on these issues and stress the need to increase investment, production and refining capacities and to enhance dialogue between oil suppliers and consumers,” they said.

In addition, G20 finance and bank chiefs highlighted the importance of promoting energy conservation and efficiency and developing alternative and renewable energy sources.

Subsidies on oil products must also be reduced, they said.

Oil prices shot to record highs in August, raising fears in both developed and developing countries that they could hurt global economic growth.

Australian Treasurer Peter Costello told a briefing later Sunday that next year when Australia chairs the forum, the G20 will tackle the issue of energy and resource security.

“With the emergence of new global economic powers, demand for energy and resources are going to increase,” Costello said.

“Those economic powers naturally are going to be looking for resource and energy security to drive industrialisation and economic growth. This will become a key question for the international community.”

Coming two months ahead of World Trade Organisation trade liberalisation talks in Hong Kong, the G20 also urged developed and developing countries to reach compromise in their trade disputes, which hold up progress in the talks.

“We urge all parties concerned to provide the necessary political impetus to promote trade liberalisation, fight protectionism, and make real progress at the WTO ministerial conference to be held in Hong Kong ... with the view to concluding the negotiations by the end of 2006,” the G20 said.

The four-year-old WTO Doha Development Round of talks that started in Qatar has been held up by disputes on how far rich nations are willing to drop trade-distorting subsidies and tariffs, especially in the farm sector.

A successful round of WTO talks is “critical” for ensuring globalisation truly benefits all countries and contributes to meeting the UN’s poverty reduction goals, the joint statement said.

To free up trade, members said they were “committed to significantly increasing market access for goods and services, reducing trade-distorting domestic support (and) eliminating all forms of export subsidies in agriculture.”

Specific measures were not cited.

The finance heads also pledged to provide special assistance to developing countries, such as by helping them improve export competitiveness, so they will not be left behind in expanded trade opportunities. Nations in the G20 “will further explore means to grant the least-developed countries duty-free and quota-free market access,” they said.

World Bank President Paul Wolfowitz stressed Saturday that free and fair trade, especially in farm products, will be crucial in fighting global poverty, and that the world’s poorest are counting on rich nations to deliver results.

In the communiqué Sunday, G20 members also voiced support for eventual reform of the international financial institutions — the World Bank and International Monetary Fund — aimed at giving emerging markets such as China bigger voting power.

“The governance structure of the World Bank and IMF should reflect such changes in economic weight,” it said. The G20 brings together the seven leading industrialised nations — Britain, Canada, France, Germany, Italy, Japan and the United States — with population giants and key developing nations.

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