TOKYO — Global economic leaders stepped up warnings that the populist mood sweeping many developed nations is a threat to trade and growth, calling on the Group of 20 summit for governments and businesses to fight to keep goods flowing across borders.
International Monetary Fund managing director Christine Lagarde urged corporate chiefs to lobby governments to keep trade flows up as she cautioned about the outlook for growth into 2017. Her comments on Saturday in Hangzhou, China, were echoed by World Trade Organization Director General Roberto Azevedo, while Canadian Trade Minister Chrystia Freeland said it’s right to worry about protectionist sentiment.
“Trade is way too low and has been way too low for a long time,” Lagarde told business leaders, citing an antitrade movement in politics, policy, and public opinion. “If there is no international trade, if there is no cross-border investment, if services, capital, people, and goods do not cross borders, then it’s less activity for you, it’s less jobs in whichever country you are headquartered.”
Lagarde’s warning comes amid a dimming global growth outlook and faltering momentum for the US-led Trans-Pacific Partnership trade pact in the final months of President Barack Obama’s term. Presidential candidates Donald Trump and Hillary Clinton have both spoken against the deal, which excludes China, while progress on a US-European Union trade and investment deal known as TTIP has also stalled.
“We’ve heard here at this G-20 a lot of talk — and I think it’s right that we’re talking about it — about the protectionist sentiment which is really sweeping the world,” and we should be worried about it, Freeland said in an interview.
“Those fears people have are real,” she said. “If we can show people that trade is good not just for Wall Street or Bay Street or the city of London but is good for small companies, then we’ll be doing a huge amount to push back against that protectionist sentiment.”
G-20 leaders are under pressure to jump-start growth that slowed to 2.7 percent last year among their economies, which represent about four-fifths of global gross domestic product. Growth is projected to slow to 2.4 percent this year before picking up to 3 percent next year and 3.1 percent in 2018, according to economists surveyed by Bloomberg.