As countries across the world are increasingly feeling the pinch of the global economic recession, the US president Obama, has asked the governments to avoid falling into the trap of going into protectionist measures.
"The last thing, I think, that we have to pay some attention to is making sure that we're not dropping back into protectionism," Obama told a business round table, which comprised of top US CEOs, on Thursday.
He was responding to a question on his upcoming trip to London to attend the G-20 Summit on April 2.
"So far at least, we're seeing some movement to contain protectionist sentiments in these various domestic markets, but we have to build on that," he said.
"I think having a strong statement that encourages trade and making sure that there are sufficient credit lines for trade, because that is one of the big problems that we've seen right now in terms of world trade is, it's just very hard to -- the traditional mechanisms for lending that facilitate trade have really contracted," Obama said.
Looking forward to attending the London meeting, Obama said he already has had a series of meetings with several leaders of the G-20 countries, including the heads of State of Britain, Mexico, Japan and Canada.
Obama said he would like a couple of broad principles emerging out of the G20. "Number one that the stimulus efforts of all countries are sufficiently robust to deal with the decline in demand. We think that's important," he said.
Countries such as China, for example, are doing that, and we want to make sure that everybody is mindful that the decline in global demand is enormous and now is the time for us to provide some ballast, he observed.
Second major issue would be financial regulation.
"We think that it's very important that there is coordination -- not necessarily a super regulator, but that there is coordination and effort so that if we are doing some things that are increasing transparency, openness, trust ...," he said.
Finally, it is paying attention to the emerging markets. "We've got some very big problems potentially there. That is something that the Europeans, for example, should be very interested in, because their banks have enormous exposure to those countries. We've got to pay a lot of attention to it, not only for economic reasons, but also for national security reasons," Obama said.
"I mean, if you start seeing a lot of emerging markets collapse, it's bad for business, but it also creates a dangerous international environment," he said.
"So to that end, the idea of wealthier countries, or countries that are running surpluses, have decent foreign reserves, foreign currency reserves, being able to work with the international financial institutions to provide some help in propping up those economies as we climb out of this recession, I think is going to be very important," Obama said.
