You may have seen Richard Kelly’s name in a few of my economy-related articles on Canadian Business Online I’ve been using the TD economist as a source for a while now but he’s not just good for a quote. He often writes papers for the TD website, and while they’re usually pretty interesting, his latest piece is an especially good read.
Titled ” Real Work Remains to Repair the Global Economy,” Kelly talks about the results of the G20 and what those nations need to do now to fix this cross-border recession.
The most interesting passage in the three page report has to do with protectionism, which is a huge concern for Canada. He says the statement given by world leaders, which calls on the G20 governments “to refrain from raising new barriers to investment or trade in goods and services imposing new export restrictions, or implementing World Trade Organization inconsistent measures… to the end of 2010,” was strange.
Given free trade is of great benefits to all parties in reducing costs for consumers and the level of production for producers, especially when it is not distorted through tariffs, quotas, and other trade barriers, they should have committed to this beyond the next 21 months.
He adds the statement also mentions “minimizing the negative impact of fiscal policy on international trade or investment,” a point Kelly interprets as a subtle hint that protectionism will be allowed “as long as it is cloaked in the mantle of domestic fiscal policy.”
This relates back to a point his colleague, Craig Alexander, made in a story I wrotebefore the G20, about how government denunciations of protectionism doesn’t mean countries won’t still implement less overt ways to shut out foreign business.
There’s other important material in this report too don’t skip the part where he explains why money doled out by the International Monetary Fund is not stimulus. If you do read it and have questions for Kelly send me a note and I’ll pose them to him, and then post his answers here.