Business lobbies in South Korea and other major economies have called on the leaders of the Group of 20 (G20) to take action to stop the spread of protectionism, a local organization said Thursday.
The Global Business Coalition (GBC) made the call in a statement issued ahead of the G20 meeting of finance ministers and central bank chief slated to take place in Buenos Aires over this weekend, according to the Federation of Korean Industries (FKI), the lobby for South Korea's family-controlled corporate conglomerates.
Specifically, the GBC urged the G20 leaders to maintain their policy tack of market opening and free trade, while calling on the World Trade Organization (WTO) and the Organization for Economic Cooperation and Development to keep close tabs on G20 members' measures related to trade and investment.
The WTO's role should be strengthened by improving its dispute settlement process and more efforts should be made to stick to rules of a multilateral trade system, the GBC said.
In addition, the major economies should come up with a new set of standards for trade and investment as well as setting up new agendas for market access, it demanded.
The GBC, which is comprised of key economic organizations in 14 countries, including South Korea, the United States, Britain, India and Brazil, was formed in 2012 to help create a global climate for free trade and investment.
The GBC's statement comes amid rising global protectionism sparked by a deepening trade row between the U.S. and China, the world's two largest economies. The European Union (EU) and other major economies have joined the fray by announcing retaliatory measures against U.S. imposition of high tariffs on their goods.
According to the FKI, the G20 member countries introduced more than 700 new trade restrictions, including higher tariffs and tougher customs clearance, between October 2008 and May this year.
The annual growth rate of global trade, which averaged 8.5 percent from 2003-07, fell to the 3 percent range due to tougher nontariff barriers by China, India and other emerging economies.
Global trade is feared to continue shrinking down the road in the wake of America's growing protectionism and the Sino-U.S. trade conflict.
Nobel Prize-winning economist Paul Krugman has warned a global trade war would make global trade decrease more than 60 percent. The International Monetary Fund has projected the U.S. imposition of import tariffs to shave the growth rate of global gross domestic product by 0.5 percentage point per year until 2020.
The FKI said it will ramp up efforts to help stem the spread of global protectionism in cooperation with foreign business organizations.
"We will join hands with foreign bodies to create international public opinion against protectionism," said Um Chi-sung, head of the FKI's international affairs department. "In particular, we will step up our outreach activity to exempt South Korean carmakers from a U.S. move to impose high tariffs on imported vehicles."
Washington is currently conducting a probe into foreign autos on national security grounds under Section 232 before deciding whether to levy 25 percent tariffs on imported vehicles. (yonhap)