Countries risk stifling future economic growth if they turn to protectionism to shield themselves from the global financial crisis, Business Minister Peter Mandelson said on Wednesday.
The United States, European nations and others have implemented trade-restricting measures in an effort to protect their workers and industries from the economic downturn. Mandelson, the European Union’s former trade commissioner, said protectionism, was a “poison” that inevitably led to tit-for-tat retaliation and a spiral of economic decline.
“I think we have to say with a very clear voice whether it be to congressional leaders in the US or those in other countries who may be tempted along the protectionist route, ‘don’t go there, don’t give in,’” he said. “All you are doing is weakening your economy in the long term,” he told Brazilian entrepreneurs at FIESP, the Sao Paulo state industry federation.
Prime Minister Gordon Brown will meet Brazilian President Luiz Inacio Lula da Silva on Thursday in Brasilia where they are expected to discuss their positions ahead of the G20 summit. Brazil is Latin America’s largest economy.
Leaders of the G20 group of leading economies will meet in London on April 2 to try to find remedies for the financial crisis and work out a regulatory framework that would help avert another similar economic plunge.
They will also consider reforms to the International Monetary Fund and other global financial institutions. Mandelson, who is leading a British delegation of entrepreneurs to explore investment opportunities in Brazil, said he expected the summit to produce broad agreement on the need for stronger corporate governance, transparency and bank regulations.
He also urged Brazil to simplify bureaucratic procedures for setting up and running businesses, while praising its economic stability and saying it was better-prepared than many countries to weather the financial and economic crises.
“The global economy offers huge opportunities for Brazil and that is why Brazilian business should never regard its frontiers as the boundary,” Mandelson said. (Reuters)