The global economy is threatened by "dark clouds" of intensifying protectionist pressures, the heads of three international organisations said yesterday in a warning to leaders of the G20.
These pressures are driven by high unemployment, macroeconomic imbalances and tensions over foreign exchange rates, said the heads of the World Trade Organisation (WTO), Organisation for Economic Co-operation and Development and United Nations Conference on Trade and Development (UNCTAD).
"The stability of the trading system will be put at considerable risk if currencies move in what some perceive as the pursuit of an exchange-rate-induced comparative advantage," they said ahead of the G20 summit in Seoul next week.
"We urge G20 governments to address these risks," they said.
The G20 committed to keeping markets open at its first summit in Washington two years ago to deal with the financial crisis and also at subsequent meetings. It commissioned regular reports from the three organisations to monitor trade and investment policy for protectionism.
The WTO forecasts that global export volumes will rebound by an unprecedented 13.5% this year. But trade, both a motor and reflection of recovery, has slowed in recent months and is at risk from economic uncertainty and protectionism.
WTO chief Pascal Lamy and UNCTAD officials have warned in recent weeks specifically of the risks to the economy of currency tension, but the direct warning from the three heads shows just how strong these concerns have become.
Just R20 for the first month. Support independent journalism by subscribing to our digital news package.