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Updated: October 5, 2010 10:27 IST

Ansari cautions developed countries against protectionism

Sandeep Dikshit
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Vice-President Hamid Ansari interacts with Finland Prime Minister Mari Kiviniemi during a bilateral meeting ahead of the ASEAN Summit in Brussels on Monday.
PTI Vice-President Hamid Ansari interacts with Finland Prime Minister Mari Kiviniemi during a bilateral meeting ahead of the ASEAN Summit in Brussels on Monday.

India has cautioned the developed world against continuing to use “non-traditional methods of protection” as that would hamper global recovery. “The fact that some of these measures are focused on services and manufacturing sectors where developing economies tend to have a comparative advantage adds to the problem,” observed Vice-President Hamid Ansari while speaking at the Eighth summit of the Asia Europe Meeting (ASEM) which began here on Monday.

Mr. Ansari said neither sustainable economic recovery nor growth in developing economies would be possible if the new non-traditional methods of protection continue as part of the stimulus and emergency support measures, mainly in the developed economies, for extended periods of time.

India's concern

While the Vice-President did not elaborate on the “new non-traditional methods,” India is concerned over developed countries excluding foreign companies from government contracts and increasing visa fees making it difficult for professionals from developing countries to access their job markets. On the other hand, the West is seeking increasing investment and business opportunities in the developing world.

Serious challenge

He referred to a recent OECD-WTO-UNCTAD report on G-20 Trade and Investment Measures which termed the potential for non-transparent and discriminatory application of emergency measures a serious challenge. It also advised governments to publicly announce exit strategies from emergency trade measures and ward off pressures seeking to make them permanent.

Drawing attention to India's strategy to counter the slowdown by fiscal and monetary stimulus and then taking steps to check fiscal deficit, Mr. Ansari felt that Eurozone countries must adopt strategies unique to each nation rather than adopting a cookie-cutter approach. Rather, international trade and investment offered an important route forward towards non-inflationary and sustainable global economic recovery. As developing countries were focusing on stepping up domestic demand by greater investment in infrastructure, there was need to facilitate enhanced multilateral and private capital flows.

U.N. reforms

The Vice-President also had bilateral meetings with Latvian President Valdis Zalters and Finland Prime Minister Mari Kiviniemi. The Latvian President suggested food processing, timber and IT as potential areas of cooperation and briefed Mr. Ansari on the situation in Eastern Europe. They also discussed the need for reforms in the United Nations, Secretary (East) in the Ministry of External Affairs Latha Reddy told newspersons.

In his interaction with European Council President Harman Van Rompuy, both leaders reviewed the state of the India-European Union relationship ahead of the India-EU summit in Brussels towards the end of the year. Mr. Rompuy explained the economic situation in different European countries and hoped substantial progress could be made on a broad-based India-EU agreement.

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