G20: The Rise of Protectionism

The recent G20 in Cannes did take one big decision which has not received a lot of airtime in the midst of the Eurozone morass - the final ditching of any attempt to make the Doha trade round work.

The recent G20 in Cannes did take one big decision which has not received a lot of airtime in the midst of the Eurozone morass - the final ditching of any attempt to make the Doha trade round work.

After years of protracted debate on liberalising trade through the Doha Development Agenda - the DDA was finally dropped in Cannes communique.

Should we care? Aren't there more important things for world leaders to worry about right now - the stability of Italy; the contagion for everyone else?

Of course we should care. Doha has been out of the inbox since the world economic crisis unfolded in 2008.

World leaders have talked the talk against protectionism - but are increasingly not walking the walk. At its most extreme currency manipulation is the order of the day from China, while the US continue to erect barriers in advance of the Presidential election.

The 'Merkozy' elections in Germany and France of 2012 tell their own story about policy direction at the heart of Europe.

But while world leaders are hunkering down to meet increasingly inward looking agendas, investors continue to look for opportunities to make sense of the reality of globalisation.

This week I attended an excellent conference hosted by Aberdeen Asset Management: East beats West? What is the Future for Developed Markets?

The event did focus on the opportunities which Asia provides - with current growth rates of between 6% and 10% from India to China. Levels which Western leaders only dream of.

But policymakers at the conference did also point to the continued opportunities from both the US in terms of its sheer innovative power and the parts of Europe which are performing really well - think Ireland which already appears to be undergoing a 'V' shaped recovery - amazing.

So while more effective trade relations and policies and a strengthened WTO must remain priorities - private and institutional investors continue to place their bet on a future where globalisation is the centrifugal force for growth.

I wish policymakers would just get ahead of markets for once!!

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