G8 ministers debate world economy

The world’s most-influential finance chiefs convened in Saint Petersburg on Saturday and were to call for greater international cooperation on energy policies and increased investment in the energy sector, according to a draft text of their statement.

Ministers from the Group of Eight were also expected to highlight risks to the world economy from rising oil prices and to urge urgent action to ensure the success of the Doha Round of trade liberalisation talks.

The draft joint statement to be issued later in the day in Russia’s second city ,Saint Petersburg, suggested a range of responses to the current energy squeeze that has seen oil prices break records beyond $70 a barrel.

“We call for comprehensive action by both energy producers and energy consuming countries to facilitate investment in the energy sector [and] improve energy efficiency,” the draft seen by Agence France-Presse said.

The ministers, representing Britain, Canada, France, Germany, Italy, Japan, Russia and the United States, recommended a worldwide standard for reporting of oil reserves in order “to promote greater transparency and reliability in energy markets data”.

The draft statement made reference to a long-delayed agreement, or charter, between Russia and the European Union under which the two sides would regulate their massive energy trade.

“We recognise the importance of the principles of the energy charter, of diversification of energy markets and supply sources and of strengthened emergency response cooperation in ensuring energy security.”

About a quarter of the EU’s natural gas supplies are imported from Russia and many in EU capitals are nervous about over-dependence. Meanwhile, Russia complains that its energy companies are restricted from expanding business into Europe.

The finance chiefs also declared their opposition to protectionism and called for “urgent progress” to conclude the Doha Round of trade liberalisation, according to their draft statement.

“We are committed to fighting protectionism and to promoting liberalisation of trade in agriculture, industrial goods and services as well as of investment,” the ministers said.

The Doha Round, launched in the Qatari capital in late 2001 and aimed at bringing the fruits of trade liberalisation to developing countries, is currently foundering and in danger of missing an end-of-the-year target date for completion.

The US and the EU are under pressure from developing countries to ease official subsidies to agriculture and to reduce import tariffs on farm products from poor countries.

Washington and Brussels are in turn pressing emerging economies to make their markets more accessible to industrial goods and services.

Elsewhere in the draft text the ministers warned that while global economic momentum remained “strong”, it was nonetheless at risk from “high and volatile energy prices” and “widening global imbalances”.

They agreed that correcting such imbalances was a “shared responsibility”.

Economists at the International Monetary Fund have repeatedly urged the US to take action on its gaping current-account and trade deficits, while calling on Europe and Japan to implement labour-market and other reforms to spur growth.

Emerging markets in Asia have been urged to contribute to balancing growth by allowing for greater currency flexibility.—AFP

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