|
Global cooperation urged
|
 |
January 29, 1999: 5:31 a.m. ET
Finance chiefs call for cooperation but differences remain
|
DAVOS, Switzerland (CNNfn) - Financial leaders from Europe, the United States and Japan called Friday for increased cooperation when it comes to solving the world's economic ills, but they differed over how to accomplish their goals.
In a presentation at the World Economic Forum here, a panel of finance chiefs called for better coordination among the Group of Seven countries to promote growth and deal with international wildfires like Russia and Brazil. But, when it came to specifics, the national interests of each country became very clear.
While Europe and the United States called for greater transparency in international markets, Japan said officials need to do a better job monitoring markets, particularly in the United States, where the number of "non-professional investors" has risen sharply.
"The complacency of the market is not warranted," said Japan's Vice Minister of Finance, Eisuke Sakakibara, adding the basic causes of the world financial crisis have not yet been eliminated.
He cited the enormous sums of money flooding into the market by mutual funds, pension funds and other "non-professional" investors as a threat to stability.
"The market we have now (is not like) the market we had 10 to 20 years ago," he said.
Japan may be bottoming out
Sakakibara went on to suggest the financial crisis that has gripped Japan over the past few years may be finally coming to an end, and he predicted the economy could "bottom out" by mid-1999.
However, U.S. Deputy Secretary of the Treasury, Lawrence Summers was not nearly as optimistic.
"I suspect a review of Japanese pronouncements at the last eight meetings at the Davos Economic Forum would suggest that it was a good idea to wait and see before declaring victory," he quipped.
Turning to Europe, Summers praised efforts to coordinate monetary policy. But he also urged European leaders to emphasize growth.
"The world economy cannot fly for very long on one engine," he said. "To fly in a healthy way, it needs three engines in the industrial world."
Europe stress open markets
European officials acknowledged the need for increased spending and lower unemployment, but they also called for open markets, a subtle reference to the ongoing trade tension between the United States and the European Union.
"We've got to keep markets strictly open to avoid any kind of retaliation, whatever kind of protectionist approach vis a vis mainly the third world and these crisis countries, although it is painful in certain sectors to deal with these problems.
The United States has threatened to impose punitive duties on hundreds of millions of dollars worth of imports from the European Union to retaliate against what American officials call the EU's "discriminatory" banana import laws.
At the same time, the United States is taking steps to revive the so-called Super 301 provision of U.S. trade laws, which U.S. trade officials have used to try to pry open Japanese markets in satellites, supercomputers, wood products, medical technology, telecommunications and glass.
The law established a process by which U.S. trade officials identify problem trade partners and specific sectors where trade barriers prevent access to markets for U.S. goods.
It establishes a time period to address those problems through negotiation. If that fails, U.S. trade officials must decide what action, if any, should be taken. In the past that section has been used to threaten trade sanctions if problems were unresolved. More recently, U.S. trade officials have been taking their grievances to the World Trade Organization.
Gordon Brown, Chancellor of the Exchequer of the United Kingdom, said finance ministers for the G7 nations plan to meet next month to discuss ways to coordinate better.
"It is absolutely critical that we take the actions having agreed that action is necessary," Brown said.
The World Economic Forum, which began on Thursday, ends on February 2. 
-- by senior producer Jerry Dubrowski
|
|
|
|
|
 |
|
